"Out of the Box" Achieves a Whole New Meaning with Software as a Service (SaaS)

The software industry is entering an exciting new phase where software vendors are aligning themselves as never before with clients to rapidly bring innovations to market that drive exciting results.

Software companies have traditionally built products that required installation and management by the client. As an example, consumers of Business Intelligence products require installation of desktop software for the individuals building reports and central servers to process all the data that produce the report output. In our global economy, this can mean keeping a complex infrastructure running 24 hours a day at scattered locations around the globe. Over the years, software vendors have endeavored to build 'out of the box' products that require as little maintenance as possible. Realistically software such as Business Intelligence continues to require significant effort and expense to implement and maintain.

With the advent of the internet, and more specifically with the wide availability of high-speed access to the internet, some software vendors are taking 'out of the box' to a whole new level. Software as a Service (SaaS) companies offer software that is 'hosted' at a central location by the vendor. Clients need only click on a web link to begin using it; implementation and management effort is taken on by the vendor.

In an SaaS world there is a pronounced requirement on the vendor to ensure customer satisfaction. Here's why:

Speed to implement
When a consumer buys an SaaS product, there are no discs or installation required.  All that is received is a simple web link. Click on it and voila – instant access to the package.

No infrastructure or hardware required
Because there is no installation, there is no requirement to outlay cash on hardware – or assign IT people to maintain it. Although for the larger packages - like sales force automation - there should be an administrator to oversee the project.

Lower barrier to entry
Traditional On-Premise software is characterized by large up-front cash outlays and relatively small annually recurring maintenance. The SaaS model differs with small upfront outlay that flows at the same level over time. This minimal up-front investment dramatically reduces the barrier to entry.

Focus on customer satisfaction
On Premise vendors can sometimes default to a 'dump and run' strategy where the vendor allocates an abundance of attention to prospects leading up to a large initial purchase, and significantly drop this support once the initial purchase is made. This behavior is caused by heavy pressure on sales teams to drive consistent quarterly revenue growth, driven primarily via the large initial purchase from prospects.

In an SaaS world where there is no large up-front purchase, clients can painlessly move to another vendor. If customer retention rates drop, the SaaS profit model is not sustainable for vendors so SaaS vendors focus heavily on long-term customer satisfaction..

Probably the most successful SaaS company today is Salesforce.com (SFDC). Roughly 10 years after inception, it is expected to break through $1B in revenue this year. It is the fastest growing Sales force automation (SFA) [Note: Sales force automation is the software that captures data from sales people on their opportunities] vendor and possibly the fastest growing enterprise software vendor in the world. Salesforce.com is leading the way in SFA and beyond.

Salesforce.com has shown the world that consumers want light, fast, impactful business applications and is now perhaps showing the world that all applications will one day be hosted over the internet. It is shifting to a three tiered strategy that jump starts this trend:

Tier One: Salesforce.com raw database
Virtually all business applications require a database to capture information. Sales force automation requires a database to capture sales-related information. The company has now made it possible to configure that database not only for sales, but for any hosted business application.

Tier Two: Salesforce.com’s development platform
Developers can build a hosted business application using Salesforce.com's development platform – Force.com – and leveraging Salesforce.com's database configured to the specifics of any requirement.   

Tier Three: the marketplace for business applications
Once the application is built, it can be listed on Salesforce.com's marketplace for business applications – AppExchange. Consumers looking for a particular hosted business application have a place to go to find them, and more and more vendors are therefore compelled to list their products at this site.

The battle is heating up
There are other vendors vying for leadership in all three tiers with the most heat on Tier Three. The vendor that owns the site with the most traffic will be the winner in this race. Others who are, or will likely compete are; Webex, Amazon.com, Facebook, Business Objects, Microsoft, and Google.

Mash-ups: taking Innovation to the next level

The increasing emergence of SaaS companies makes it far easier than ever before to merge innovations; technology is no longer in discrete On-Premise silos – it is not all on the internet. The potential business impact of these combined applications goes far deeper than anything the world has seen thus far.

Imagine merging a Google map with Dunn & Bradstreet corporate data and a sales analytics application to visually and instantly identify a list of key accounts by sales territory, and rapidly develop more effective resource allocation for better and faster account penetration. These types of truly impactful business applications are now possible. 

Business Objects OnDemand offerings are leading the way in making these integrated innovations possible:

• Crystal Reports.com: offers clients sharing of world-class report building technology.
• Business Intelligence OnDemand (BIOD): is the complete suite of Business Objects capabilities, plus a hosted data warehouse.
• Information On Demand: Industry, competitor and market research information from third-party database vendors.
• nSite: User friendly programming language enabling business users to build hosted custom applications.

Business Objects is leading the way into a new world where software vendors and consumers are finally on the same side of the table driving exciting new innovative solutions. These SaaS solutions will propel business impact to unseen levels.  Enjoy!

About the Author
Randall Isaac is a ten year veteran in the business intelligence industry working in the direct and channel sales divisions at Crystal Decisions/Business Objects, and currently as CEO of Bluetide Management. Bluetide builds hosted forecasting solutions for B2B sales executives.

Written by Randall Isaac, Blue Tide Management