The issue isn't just SaaS vs. On-Premise - It's also about the speed that value is delivered
Recently, I had a good conversation with Jan Arendtsz of Celigo. His firm makes connectors for NetSuite and Salesforce.com.
The really interesting part of our conversation though centered on this sentiment I’m hearing from many software buyers. In essence, they are saying that they need:
- solutions that have a low initial capital appetite. So, that means SaaS (software as a service) trumps the on-premise products.
- They also need these SaaS products to be implemented within the quarter or the project doesn’t get green-lighted. This is an advantage for SaaS vendors with great consultants, fast conversion tools and pre-supplied integration tools/connectors (Celigo has these).
- These projects still do not get the go-ahead unless they also start to deliver value within the first quarter. Now this is a high hurdle. But, it also points out that SaaS alone is not enough in this economy. High-velocity SaaS is what’s needed.
What would high velocity SaaS contain? Minimally, it would have:
- capabilities to connect to other enterprise applications whether they are SaaS-based or not - fast integration tools that take a lot of research, guess work and coding out of the implementation process - data conversion utilities - product consultants
But more than anything, high velocity SaaS apps must provide clear proof of value, a way of capturing the value delivered and a mechanism for repeating this value capability in customer after customer. It's the value delivery speed that will create great market uptake for SaaS vendors particularly in this economy.