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.