Michael MaozIn the past five months I have visited over 75 clients on three continents, not counting 32 individual meetings with CIOs and staff during our recent Gartner Symposium in Orlando. An interesting and recurring statement I am hearing from IT and business leaders is that, barring serious discounting, SaaS vendors are charging too much money for the business to convert their applications wholesale over to the Cloud model with these vendors.
Few IT leaders are rejecting SaaS as a delivery model. They like the idea, and hope that there are more case studies of high scalability with high transactional levels and real time integration/synchronization with legacy systems. But they are voicing reservations because they don’t see robust installations in key areas such as insurance claims, reservation systems, core banking, telecom call centers or government agencies. They are also beginning to plot the long-term costs of adding multiple component parts from a consortium of vendors in order to complete a solution.
Maybe in 2010 we will see someone other than Salesforce.com and RightNow Technologies in the CRM OnDemand space. The vocal support of the large integrators would go a long way in boosting confidence. So would demonstrated competency from Oracle and SAP and Microsoft in the high end Customer Service space, versus low interaction areas such as sales force automation.
The initial glow of SaaS is still very much lighting the way for the enterprise, but for this to turn into a stable market at the high end of complexity a lot more economic and technical validation is necessary.
If you have interesting / auditable examples that fit the high scale and high complexity contact center model – let’s say over 300 simultaneous agents handling a high volume of customer service calls and integrated with CTI, billing, and fraud, and driven by business rules – and where the economic modelling shows strong support for SaaS over perpetual / on premise alternatives – send them over, or just talk them up outside of your business!
Category: CRM Innovation and Customer Experience SFA SaaS and Cloud Computing Sales Force Automation Tags:
6 responses so far ↓
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3 Jeroen Buis December 8, 2009 at 8:41 am
Michael,
We supply our software on ASP/SaaS basis since 1999. The software of ShipitSmarter supports the transport process and we normally interface with ERP and WMS systems on 1 side and hundreds of carrier systems (UPS, FedEx, atc) on the other side. We process over 10.000 shipments per day and have sites that process 60 trucks/ 900 shipments per day. Compared to normal ERP or locally installed TMS systems, we are very cost competitve and deliver savings to our customers from day 1.
Regards,
Jeroen.
4 Robbert van Geldrop December 8, 2009 at 1:19 pm
I think online backup has certainly proved to provide value for money. It is one of the SaaS offerings in the market today that has been around for a while and is even defined as a separate market segment.
Looking at the penetration rate in the Dutch SME market, which is higher then 10%, I’d say that price points are set just right.
I think you are interviewing the wrong people and draw conclusions from their biased opinions too fast. I also interviewed CIO’s about SaaS and my experience is that enterprise CIO’s are not the real visionaries you’d expect them to be. Their claim that SaaS would be too expensive is another signal to me that they still have no idea on the hidden costs their sluggish IT infrastructures consume today. Also, missed opportunity costs are another factor they don’t count in when making this comparison.
5 Jan Aleman December 8, 2009 at 3:28 pm
We have quite a few customers that have applications along the requirements you mention in production and successful as SaaS. Our platform enables ISV’s to build transaction intensive multi-tenant applications that will scale to any amount of concurrent users. Contact me by email and I’m happy to arrange site visits or phone interviews with some of our ISV clients so you can see it for yourself.
6 Software As a Service - Topic Research, Trends and Surveys February 3, 2010 at 7:08 pm
[...] or SaaS can help stretch tax dollars, cut through … market research, surveys and trends Packaged Software as a Service is too Expensive. In the past five months I have visited over 75 clients on three continents, not counting 32 [...]