By Steve Woods, CTO, Eloqua Corporation
Businesses that use software as a service (SaaS), where a software vendor hosts and operates an application for use by its customers, typically have pointed to the cost benefits of its use. Since they do not have to purchase expensive commercially licensed software and absorb the associated costs of deployment, maintenance, training and upgrades, businesses have felt that this is the primary benefit that makes this the better option for them.
Additionally, this has been an especially attractive model
for marketers, whether they work as an outsourced vendor or
are part of a company’s internal team. Besides the financial
benefits, marketers who use a SaaS model for their marketing
programs do not need to become IT experts and worry about
the actual operation of the technology. Instead, they can
devote their time and energy to doing what they do best:
Generating leads and filling the sales pipeline.
While all these observations are true, there is a much
bigger benefit and trend that has become much more prominent
in the marketing community when it comes to SaaS models. The
quality of SaaS software is much higher than the quality of
traditional software. This has a direct impact on the effectiveness of marketing outreach and ultimately, the success of sales programs.
Consider that more and more, companies are recognizing that:
- On a per unit basis, more of an R&D investment is put into a
SaaS model. This is possible since all of the effort and
focus is put into developing and supporting one version
rather than there being a large focus on maintaining and
supporting historical versions of the software.
- There are fewer distractions for developers and they can
strictly focus on making the product better. They do not
have to worry about patches and bug fixes for multiple
historical versions and point releases. Since this is the
case, the energy and focus of the software vendor does not
get sidetracked with the various issues of supporting
multiple versions of software – licenses, patches, tech
support, upgrades – and focuses solely on making the one
version of the product the best it can be. While this is
attractive to the vendor, customers are the ones who benefit
the most from the resulting speed of enhancement and
innovation.
- SaaS models enable software vendors to be much more nimble
and to make improvements much more quickly. Product teams can make bold innovations and engage directly with customers to guide the product and optimize it to best solve the business pain for which it was intended. Unlike licensed
software, where the exact use cases of clients must be
hypothesized on paper and then built into the product prior
to release, SaaS software is able to build actual client
learnings and feedback into the continued innovation of the
product, investing in use cases that are most relevant to
clients and not investing in use cases that are not
relevant.
- Related to this, the SaaS approach to upgrades affords
enormous benefits to clients. Because the SaaS vendor
assumes responsibility for upgrades, significant effort is
put into ensuring that the software is maximally upgradeable.
Configurations, rather than customizations, are used in almost all cases, which allows the client to take advantage of being on the latest version of the software without the expense, risk and effort associated with upgrading licensed software that is heavily customized through brittle code extensions.
Companies that may be resistant to using a SaaS model point
to the fact that their IT departments are unable to build custom
code into the software and adapt it to their specific needs.
This method of mapping technology to business processes,
however, has proven to create a long-term challenge in software
management and upgrading. A better approach, and the approach
SaaS vendors have invested in facilitating, is to ensure that
the software allows the configuration needed to match your
business process. With this approach, not only is the software
better able to match your business processes out of the box, but
it also upgrades seamlessly without breaking the brittle code
customizations.
As you investigate licensed software, be sure to think through the longer-term implications for innovation, upgrading and configuration. Ask yourself the following questions: Are you
signing up for an experience that relies on custom development
for each business process you need to map to? Will you, after
three years, be on software that is three years out of date and
due for a major upgrade? Are your license fees being invested in
innovation, or are they going down a black hole to support
legacy versions of the software? If you answer yes to any of
these, you should rethink your options to best serve your
business.
As you hopefully look toward SaaS software, be sure to think
beyond the clear financial benefits it offers and keep in mind
the benefits it offers in terms of innovation, customer-centric
solution focus, and long term upgradeability. Ensure that your
SaaS vendor provides sufficient configuration to meet your needs
for the long term by looking at the customers they have worked
with for many years. If you can identify several dozen customers
with similar business processes to yours, you will be in for a
pleasant experience as you grow with the software and continue
to configure it to your evolving business needs.
Steven Woods is the Co-Founder of Eloqua the global leader in
demand generation applications and expertise. He has held the
position of Chief Technology Officer since it was founded in
1999. Steven brings to Eloqua years of experience in software
architecture, engineering and strategy. He is responsible for
defining the technology vision at the core of all Eloqua's
solutions. Steven’s insights into the application of technology
to the sales profession have been key to Eloqua's consistent
record of client satisfaction. He was voted Inside CRM's Top 25
CRM Influencers for 2007. Steven has also worked in corporate
strategy at Bain & Company and engineering at Celestica. For
article feedback, contact Steve at
steven.woods@eloqua.com
 
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