I'm often asked, what's the big deal with software as a service (SaaS)? If all you're doing is hosting the application instead of installing it locally, it's just an alternative delivery mechanism. So why do people talk as though it's a whole new category of software?
If it were just the delivery mechanism, I would agree.This is what went wrong with packaged application software all those years ago But changing the delivery mechanism means that vendors don't have to talk to customers about implementation any more. That fundamentally changes the way vendors look at the application. It forces them to think beyond the technology and to focus on business results instead.
Whenever customers have to physically implement an application on their own premises, the conversation with vendors always ends up being about the technical features of the product such as performance metrics, compatibility and interoperability. It ceases to be about the original reasons why the business people wanted to automate processes in the first place.
This is what went wrong with packaged application software all those years ago when it first came out, as Rand Schulman, chief marketing officer of on-demand website analytics and digital marketing vendor WebSideStory, reminded me when we discussed this over lunch the other week. When packaged applications first arrived on the scene as an alternative to custom-built in-house sofware, it seemed like they were going to be the ultimate solution to business automation problems. But before long, all the conversations ended up being about compatibility with various platforms, and the business need ended up taking a back seat.
Now, for the first time since that wrong turn the software vendors made all those years ago, on-demand applications are putting business results back into focus. The vendor has already done the implementation before even meeting the customer. The technology is already sorted, and the vendor guarantees to keep it working. What matters is whether the application meets the customer's business need. The whole conversation revolves around what the customer is trying to achieve, and whether the application can help with that.
I reminded Rand that I had sat through a morning's worth of product presentations at WebSideStory's user conference the previous month. There had been nothing about how the application performed, or what database and application server platforms it ran on. It was all about what customers were doing with the applications and the business results they were achieving.
That's the big deal with SaaS — by abstracting away the platform, it makes the platform irrelevant, and puts the focus back where it belongs, on what the application actually does for the customer.