Software as a service, or SaaS is a well known animal to most of us. But, in talking with some prospects today, I realize that the average business owner doesn’t have the time, or possibly the inclination to really dig in to the benefits.
The other day I happened upon a great blog post over at the BuildingSaaS blog that summed up the primary reasons for why hosted systems benefit the customer.
John Martin’s post is very comprehensive and he goes into some depth on each point below. I highly encourage you to check it out.
- Upgrading the software and technology stack
- Becoming orphaned on an old software version
- Solving infrastructure software incompatibilities
- Operating the infrastructure and software
- Maintaining multiple non-production environments
- Diagnosing technical issues
- Building technical expertise for the software
- Enduring cost surprises
- Shelfware, with Maintenance Fees for Unused Software
- Platform Changes When Upgrading
- Aging Software
- Licensing Shenanigans
- Multiple Instances and Versions
- Internal Support Staff Costs
- Performance Tuning
- Waiting for Quality
Keep in mind that these benefits are all from the technology perspective and generally relate to the long term costs of maintaining your IT infrastructure. They don’t include other benefits of hosted, multi-tenant applications that certainly apply to something like NetSuite, such as:
- Access from anywhere
- Easier system configuration
- Enterprise Level Security
- Best in Class Backup
- Highly Scalable
- etc.
The best line from his post is:
The common factor is that a SaaS vendor’s motivations are much better aligned with the customer, since the SaaS vendor’s revenue is tied to the customer’s satisfaction, retention, and software usage.
I really believe in this. Even though it might not seem like it, if you are paying as you go for your software you can be darned sure that your software provider cares that you keep using it, much more than if you got delivered a box of software.
It may take some time for all of us to start assigning dollars to each of these benefits to truly determine the ROI of moving to the hosted model but it’s happening, especially as those version upgrades from traditional software vendors continue to disappoint.
