What makes on demand different

My advice when evaluating an on-demand solution? Forget about the software. It's not relevant.

I know that sounds counter-intuitive.This change ... transforms the relationship between vendor and customer An on-demand application, like any computer application, is built from software. I'm not arguing that software plays no role. All I'm saying is that it's not what a prospective buyer should be interested in.

When businesses buy software, what they're really after is something that will help their operations run better. The software is a means to an end. It's the application — the end result of using the software — that matters.

When people buy conventional software, they tend to get sidetracked from what they're really after. Instead of asking how the application measures up against their business needs, their attention gets diverted into evaluating the underlying software. They have to consider how well the software will perform; how reliable it will be; and how they're going to make it secure. The vendor will offer them help and advice, but the final responsibility for all of these matters rests with the customer — as well as obtaining a business benefit, if they have any energy or resources left once they've got the software working satisfactorily.

When people buy an on-demand solution, all of those software matters are up to the vendor. It's a given that the application will perform, remain reliable, and be secure. It is the provider's responsibility to make it so. The conversation therefore moves on from, 'How will I get this software to work?' and becomes 'Will this application help my business work better?'

This change in emphasis transforms the relationship between vendor and customer. Talk to any exec in the on-demand applications business and they'll emphasize one thing: customer success. Salesforce.com's Marc Benioff told me last month, "Nothing [is] more important than making every user and every customer totally successful." Or as RightNow's Greg Gianforte put it to me last year, "Without a culture that truly values customer success, getting customers to renew on an annuity license plan is near impossible." Of course, any software business exec mouths the mantra of customer success, but the way on demand works takes it to a new level.

The focus of a conventional software sale is getting the customer to buy the software. When conventional software executives talk about customer success, what they have in mind is helping customers install and run their software successfully.

The focus of an on-demand application sale is maximizing usage. When on-demand executives talk about customer success, they really do mean customers' businesses operating more successfully — which, as I said earlier, is the real reason why businesses buy applications in the first place.