More than software, as a service

More than software, as a service

Summary: Cloud services are much more than software alone. Cloud providers should focus on delivering business outcomes.

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I have always disliked the term 'software-as-a-service' because to my mind it misses the point. No one (except for a few code-crazed developers) actually wants software, either as a product or as a service. It's a means to an end. What people actually want are answers, results and outcomes. Therefore, what they want delivered from the cloud is rarely software on its own, but software in combination with other non-software components that add up to a useful outcome.

A case in point comes in Concur's announcement today of an add-on to its travel and expense management SaaS offering that guarantees compliance with UK tax rules on value-added tax (VAT). If you don't do bookkeeping for a UK or European business, you will have no inkling of the wilful complexity of VAT rules, so you'll just have to take my word for the daily tear-your-hair-out impenetrability of the regulations inflicted on us by the tax authorities here.

The new Concur service removes that entire burden, automatically ensuring compliance as well as making sure the business reclaims all the tax it's entitled to. But what caught my eye in Concur's press statement was the description of what lies behind the automation: "...a dedicated team of compliance experts focused on ensuring VAT rates and rules are constantly monitored and updated. This combination of best-in class technology coupled with deep tax and compliance expertise is unique in the marketplace and provides SMBs with a distinct advantage over traditional technology solutions."

This is using the cloud to do what it's best at — providing access to a pooled, specialist resource that would be hugely more costly to implement separately for each individual business. It wouldn't be possible to do this without the software (nor the cloud), but it's the addition of live expertise that completes the service. Too often, SaaS providers make the mistake of stopping short of going that extra distance. They provide the software and leave it to their customers to add the final touches that deliver a business outcome. But that's an old, traditional-technology approach that fails to exploit the real competitive advantage of the cloud.

Instead of thinking about software when designing a service, cloud providers would do better to think first about the business outcomes they aim to deliver. The cloud allows you to rethink entire business processes rather than simply replicating traditional technologies as SaaS. True innovators see software as just one part of the means to the end. When payroll provider ADP's founder Henry Taub first started processing payrolls as a service, the company didn't even use computers, as Tom Foydel wrote last year: "They were actually doing payrolls on adding machines and delivering them by bus in the earliest days."

There's something else worth highlighting in Concur's new tax compliance service: it's guaranteed. Back in the days of conventional on-premise software, the only warranty you got was for the disks it came on. Getting it working was at the customer's own risk, let alone achieving a productive result. The move from software products to cloud services introduces an entirely new relationship with customers in which providers not only deliver outcomes but are even prepared to guarantee them. 

Topics: Cloud, Enterprise Software

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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5 comments
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  • absolutely true...

    couldn't agree with you more... excellent post!!!
    In the software world, developers and technologists always dream of a fully 'untouched by human' world. That has never gone right and, in fact it is the right combination of people and machines that deliver excellent services to end users... striking that balance and role for each is the 'key'.
    sreesiv
  • More than IT, business outcomes

    Enjoy the post. I'd also suggest we think deeper about cloud beyond terms of agility and cost savings, which are becoming overused or almost promoted exclusively to IT. IT without an business outcome is IT without a job?! Recent Gartner webinar had shown >50% of cloud spend had occurred outside of the IT budget.

    One idea for non-software portions of SaaS, vendors may think about that extra-mile being promoting best practice seminars or (anonymous) benchmarks within the site. Manuf, marketing and accounting consultancies print varied benchmarks today but not directly connected into cloud offers. In the case of BYOD, maybe shared templates of use/privacy policies.

    Matthew Mikell
    Dell
    MikellAtDell
  • payroll software

    Singapore Government takes extra mile step to implement software by providing subsidies & cash back.

    Singapore IRAS offers 60% cash back or 68% tax rebate to implement payroll software, HR system and other computer related software.

    In addition to that Singapore IDA offers 70% cash grant to implement payroll software.

    babu
    Info-tech Systems
    http://www.info-tech.com.sg/payroll.htm
    babu@...
  • Cloud is much more....

    "Cloud services are much more than software alone."

    Got that right. It is a massive attempt to lock companies into one vendor, massively increase the overall price paid for software, subject companies to outages, slower response time (via Internet), data insecurities, increased bandwidth costs, having your data hacked, and the possibility that any government agency can grab your data.

    Oh,yes, the cloud is much more than just software.

    Have a nice day,

    Doc
    Doc.Savage
  • Dinstar SIM Cloud

    Yes, cloud providers would do better to think first about the business outcomes they aim to deliver. "Cloud services are much more than software alone." Dinstar SIM Cloud made remote operation and management become possible.
    dinstar_voip