In a recent piece at SandHill.com, I argued that proponents of Software as a Service (SaaS)?need to emphasize more than just the pricing or delivery aspects of the model.?As I put it: "How, in other words, will the model help us help our clients rise to higher levels of business performance? How might it help them address their key priorities -- even contribute to their transformational initiatives?"
Like Ray Lane, general partner, Kleiner Perkins Caufield & Byers and former president of Oracle, I'm convinced that "The software business is becoming a service business."
However, I also believe that the most important aspect of the model is the opportunity it creates for?dynamic and accelerated learning -- or feedback.
I cited?RightNow Technologies to defend my point. This "Hosted CRM" company -- with clients like Orbitz, Toyota and Procter & Gamble --?has concentrated on the outsourcing of contact center technology and infrastructure. Sean Forbes, vice president of marketing and business development for RightNow, explains that his company uses something it calls a "Customer Success Index" to "stay very close" to its clients.
"With our clients' consent, we have the capability of watching every single customer interaction," he says. "We watch their businesses, literally, more closely than the executive management we sold our solution to. And each month we generate a report based on the critical value drivers we have defined."
This sets the stage for?"active and perpetual learning," I argued. "Traditional software companies often have been accused of 'throwing product over the wall' to the customer. Once implemented, vendors typically have had no real visibility into how their product is applied and what is learned over time. The software-as-service model, however, enables RightNow to more easily track client performance with precision, insight and immediacy."
As I explained, RightNow currently?is "monitoring contact centers all over the globe in a real-time fashion. Through its 'SmartSense' capability, it is able to track a contact center?s service levels and customer satisfaction scores, and report back to client executives on a continual basis. The company even has patented algorithms that enable it to track the 'emotional state' of the client?s customer in the course of an interaction (through an analysis of key words and language structure)."
"We have to deeply understand our clients? business processes to help them enhance performance,"?Forbes told me.
Indeed, the SaaS model "can help companies track application usage on a continuous basis. But the tracking also opens up new, higher-value strategy and business discussions. Software-driven, solution providers now can rapidly flag problems, but they can also advise their clients on how to generate business performance gains (beyond the application itself). RightNow's business consultants can address key client executives with a wealth of documented findings and analysis. This leads to highly engaging conversations, opening the door to more extensive, valuable and loyal client relationships."
Ultimately, the "most profound aspect" of the SAAS movement could prove to be?"the ability to dynamically leverage client feedback to guide and generate continual performance growth."