Challenging SaaS (part 3)

Anti-SaaS arguments can have their source in true technical concerns or (in some degree) by the buyer’s physical resistance to sign-in to something that they don’t own. This can become a critical factor in some parts of the world, where the sense of ownership is very strong (my country, Greece, is one of them; I hear it’s the same in India and I’m sure that there are a lot more examples like that). And this sense of ownership is strong in other aspects of everyday life, too. For example, the acceptance of leased car versus owning an automobile is not the same in all countries.
Let’s go on to see some more examples:

  • I want it up and running on Sundays. It is possible that what the vendor is providing “out-of-the-box” is hot-line customer support on working days and hours. Some prospects are challenging that by raising the argument that they do not just work “nine to five”. In cases like that it is only logical that you will be charged more if your require hot-line availability beyond the typical “9-5”. Let’s be honest. This is not a true “anti-SaaS” argument. Even in the case of on-premise, the IT dept. needs to employ an “after-hours” system operator to handle these exceptional cases. And this person is getting paid, too! And this person has to have a substitute in case of sickness or leave of absence! So, it is only logical that you will accept your vendor’s “extra charge”, to balance that cost that you will not carry, after all. In fact, we can – again – expect that this charge will be significantly lower since the vendor is using economies of scale.
    This whole issue becomes tricky when the vendor is a global provider in multiple time zones: In that case, they need to deploy real 24/7 system operators and hot-line support for their global customers. Even in this case, I don’t think that system availability and after-hours support is a real anti-SaaS argument or a “threat” to the overall offering.

  • I need large-scale customization. I have blogged about this issue previously here http://tchristidis.blogspot.com/2010/02/customization-enemy-of-saas-part-1.html and here http://tchristidis.blogspot.com/2010/03/customization-enemy-of-saas-part-2.html. I will repeat myself but I want to say just this: If you’re looking at SaaS products to deploy, then you should also examine your list of customizations. Could they be just a little too exaggerated?

  • What technology are you using? It is a common question when your are trying to sell an on-premise piece of software. And this is only reasonable. The IT manager needs to understand the technology and see if its fits into their pool of expertise, their corporate policies etc. But when we are talking about SaaS, this is really not an issue. What do you care about technology, since it will be somebody else’s problem (the service provider’s)? In fact, if you are an IT manager that knows the basics of technology, you just need to get this information so that you can evaluate if something “terribly wrong” is going on with this SaaS product. For example, if they offered you a full ERP that runs in Visual Basic 5 and had MS Access for a database, then you could easily assume that this could not withstand the ERP volumes. But if they offered you a “Ticketing System” with max 2 concurrent users, then the system requirements could be significantly lower than the “monstrous” ERP. In any case, I find it difficult to believe that any SaaS product has something “terribly wrong”, in terms of technology, since one of the main concerns at its design stage was surely concurrency and a large number of users. Nobody is designing SaaS software for a max of 50 users, unless there is a clear target of single-tenancy modeling (which I doubt very much).

    As a closing statement I would like to say this: There is a number of “anti-SaaS” arguments that prospects will raise and a significant percentage of them origins from lack of education around this issue. Another significant percentage comes from the threat that the IT manager sees in SaaS (for which I have blogged here http://tchristidis.blogspot.com/2010/03/is-saas-enemy-of-it-manager.html). In my opinion, it will take some more time of preaching and educating, but SaaS is definitely taking off. Some say that SaaS cannot replace “everything” (e.g. big ERP products etc.). Maybe this is true (for now). But as technology evolves and internet becomes more and more a commodity, this may significantly change in a few years…

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