More and more we see big players dipping their toes in the SaaS waters. In recent months we’ve seen SaaS related movements from Microsoft, SAP, Sage and many others. All of this has led me to revisit a series of posts I wrote 18 months or so ago on ISVs moving to SaaS.
I’ve always been pretty sceptical about ISVs suddenly turning on the spot and moving to SaaS. I’ve long said that at first instance it is immensely difficult for a legacy ISV to move to SaaS. This difficulty becomes almost an impossibility if they want to make the move completely in their current space. Cannibilization of revenue, shareholder demands, short term revenue hits and different sales/marketing approaches all conspire to make it painful.
Primarily here we’re talking a cultural issue here rather than a technical one. Nearly two years ago I came up with a (admittedly rather simplistic) six point plan for traditional ISVs to adopt when moving to SaaS. My culture change tips were;
- Accept that disruption is going to occur and identify that it’s better to disrupt from within than without
- Accept that for disruption to occur, control needs to be given up.
- Dedicate resource – people, money and time – to building a dev team charged solely with finding the “golden disrupter”
- Accept that disruption will hurt short and medium term revenues, but will ensure long term survival
- Once the product is there, don’t try and subvert it to suit the current status quo
- Don’t even think about having the same sales personnel or strategies selling the traditional and the disrupting offering – it won’t work
The second very important point here is the SaaS/s and SaaS/v issue. ISV’s tend to see a move to SaaS as being “the same product piped down a different channel” or what Phil Wainewright refers to as SoSaaS. This utterly ignores the core benefit of SaaS. SaaS allows a network to be formed that can aggregate value for users and thus revenue for the SaaS business. Unless the move to SaaS includes both value add AND the new delivery method, it will be doomed to mediocrity at best and failure at worst.
This is the latest of a whole raft of blogs, twitters and general chatter about how existing software developers couldn’t possibly leap the chasm from ‘traditional software’ to SaaS which is so innovative and different.
Come on guys. Do you really think that the big software companies of today have not had to cope with radical technology changes before? CODA has been around for 30 years – we started developing accounting systems on the HP3000 (remember those? probably not…); then developed another accounting system from scratch for the Digital VAX; then again for the AS/400; then again for open, client/server platforms; and yet again for the zero client web browser technology.
Each of those steps required a radical change for us – new hardware, software tools, programing languages, approaches to development, testing, benchmarking, selling, supporting, marketing etc etc…
We aren’t alone. SAP, Microsoft, Oracle have all been around for many years and have survived and thrived as technology and business paradigms (aargh… that overused word!) have changed…
Just because a couple of ISVs have had hiccups in entering the SaaS world, don’t write off the whole established software industry. We aren’t stupid and we aren’t novices. There’s a lot to be said for experience, as my old grandad used to say!
@DT Well at least I’m happy to know that I’m in good company 😉
There’s an innate characteristic of the technology industry upon which it has propellled itself down the years; improvement.
This quest for improvement exists, primarily, to serve the needs of the intended user of the tool or product who, presumably, has a business, process or need for improvment in some way.
However, a natural consequence of this endeavour to bring improvement is that some of it gets reflected back into the industry, most commonly witnessed when a once new and groundbreaking product is rendered redundant by its successor.
This in turn provides vendors with great scope for competition and differentiation; these being the key principles of selling. And it’s easy to get excited by differentiation in a world which has become, frankly, quite vanilla in the last ten years.
But as David says, this isn’t some new dynamic that will render every technology business that’s been trading for more than five years obsolete. It IS the software business.
I think, however, there is an interesting new dimension around this current phase of technological evolution, and that’s the amplification of the discussion about it on the web.
Past technology paradigms and evolutionary steps like the mini computer, client/server, the IBM PC, low cost networing etc. never had the benefit of the web doing its PR. SaaS does.
Passion and enthusiasm for our products/service/companies is great. And some arrogance, ambition and determination are mandatory for success.
Gary – I appreciate your comments – cheers
My previous comment got clipped…
…But sometimes I sense an unhealthy dogma when I read and hear about some of the coverage and opinions in support of SaaS.
Gary – I’d like to think it’s passion and not dogma. Having been personally exposed to dogma on a number of different levels I’d hate to think I was blindly going down that road.
FWIW – Coda is an example of a traditional vendor doing an excellent job of moving with the times. It’s much less a technological issue than a cultural one. It seems to be from my perspective that the bigger the vendor, the harder it is to shift….
Maybe dogma’s too strong. And as David says, isn’t CODA just doing what software companies have always done?
Ben, forgive me if I didn’t make it clear; I just found your blog today following David’s tweet; my comments are not based upon any exposure to your views at all. Just seemed like an appropriate place to deposit my thoughts.
Perhaps dogma is too strong, but I generally sense something in the same department in _some_ of the SaaS back and forth out there – a one single future/paradigm to the exclusion of all others kinda thing.