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Haut Tech: SaaS Insights from Scio Consulting
We were in San Francisco for the OpSource/SIIA SaaS Summit and to give a workshop with Jim Geisman of Software Pricing Partners following the conference. It was good to see a conference that was relatively well attended after a couple of years of shortfalls and cancellations. And it was good to see so many existing SaaS companies in the mix. I enjoy the challenge of startups, but seeing that there is a strong trend of maturity emerging in the industry is a good sign for everyone.
I really enjoyed the challenge of the workshop Jim and I gave. Our audience spanned a wide range – from large established providers to startups. We had a lot of material, but somehow, we got through it and managed to cover most of what our audience was interested in. It’s tough, because we bring a point of view to SaaS that isn’t covered in the media. SaaS is not about the technology, even though it takes technology to deliver it. It’s all about the business model.
The folks at DreamSimplicity covered the show and workshop. I hope to see much of the video they shot eventually, but in the meantime, you can find a brief video of us “at work” on their website.
With the headline, “SaaS officially crosses the chasm – largest enterprise deployment…ever,” our friend Justin Pirie highlighted the deployment of 2.1 million seats to one customer by SuccessFactors in his widely read blog on SaaS news. It is truly an interesting development, but from our customer base, I have to wonder if this is actually the largest enterprise implementation of SaaS or perhaps in fact just the largest publically announced implementation. There are a lot of services that sit behind both other services and behind enterprise applications that are widely used but rarely mentioned.
I also strongly resist the temptation to measure success by numbers of seats, however impressive they might be. I don’t know the pressures that were applied or discounts that might have been given to achieve this feat, but given that it was announced in the press without client attribution, I clearly understand part of the motivation is to show market domination by SuccessFactors. Are they making as much profit on these seats as they do generally? Probably not. In fact, we’ve seen situations where a customer was so large it could literally “sink the ship” to take them onboard. Being able to absorb this many seats in a service business takes a lot of planning and modeling to assure it won’t cause more service and support disruption than you can handle. There are a lot of successful business-to-business SaaS operations that may never cross this particular chasm and measuring their success by the numbers of seats just isn’t a relevant measure. Cash flow, profit and client/user retention remain the key success indicators in SaaS.
Justin also highlighted Steve Blank’s “must see”
There is a lot more out there, but I’m catching up this week after our trip and I’ve given you enough to digest for now. What’s been on your mind lately? What challenges are you facing? If you care to share, I’d love to hear from you.
All the best,
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