Incremental adoption sells SaaS to the enterprise

Yesterday I had an opportunity to find out more about the motives driving SaaS adoption among larger enterprises from the customers themselves.
Written by Phil Wainewright, Contributor

I spent yesterday talking to a number of UK and European SaaS adopters, courtesy of RightNow Technologies, which has been holding its European user conference. More than 100 people attended from 72 different organizations, which is double the number last year, a sign both of RightNow's growth and of the emergence of a substantial SaaS user community this side of the Atlantic.

Greg Gianforte, RightNow CEO
RightNow targets larger enterprises than do most SaaS vendors, and some of its largest early implementations were with UK rather than US companies, including British Airways and the UK's top savings and loan institution, Nationwide Building Society. So the day was an opportunity for me to find out more about the motives driving SaaS adoption among larger enterprises from the customers themselves. I heard from organizations as diverse as camera manufacturer Nikon, Edexcel (the UK's leading examination board), G4S Cash Services (part of security firm Group 4 Securicor), games developer UbiSoft, and Royal Bank of Scotland.

First and foremost, it has to be said that RightNow's customers choose RightNow because the application meets their needs — which is the same point as that made by the 'skeptical CIOs' panel at SaaScon two weeks ago. Enterprise buyers go shopping for business functionality, not technology attributes. RightNow's sales process emphasizes getting a proper understanding of the customer's business need and explaining how the application matches up.

But there was one selling point that emerged again and again for the on-demand model, all other things being equal. Enterprises like the fact that on-demand scales more evenly than conventional on-premises software. This means they can make a rapid start on a small scale and then roll the application out more widely on a timescale of their own choosing (or to different sets of users irrespective of how large or small each group is). In some cases this was coupled to an economic motivation, such as not having to take on additional in-house IT staff, or having less budget available this year than next, but more often it was dictated by the needs of the organization.

Those organizational needs were largely about people factors and departmental politics. An incremental approach avoids putting stress on overburdened resources and allows the application to quietly prove its worth before rolling it out to every user. For sales automation software, it's often good to start with a few selected users to demonstrate the advantages of using the system and whose enthusiasm then spreads to their colleagues. In other cases, demonstrating early ROI is the key to unlocking further budget for expansion.

Don't mistake this for ad-hoc adoption, though. These enterprises are committed to RightNow as a corporate standard and most of them go into the engagement with a clear idea of where they want to get to two to three years down the road. It's just that the on-demand architecture allows them more choices in how they phase in adoption of the application across the organization.

According to CEO Greg Gianforte (pictured above), the median experience is that new RightNow customers place six separate orders over their first two years, which suggests a strong skew towards incremental implementation.

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