Wednesday March 10, 2010

The SaaS & Success Project
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Thoughts And Wisdom
 
What I really like is that The SaaS & Support Project Report 2009 is not a dry collection of numbers: It's an *expert* document based on the insights of a knowledgeable advisor. I just wish more people created this kind of analysis.
 
 
Jeffrey Tarter, Executive Director: The Association of Support Professionals
Recent Articles

Good Handling of an Unnecessary Case is Still a Waste

It’s Time to ‘Think Different’ About SaaS

Creating and Sustaining Profitable SaaS Customer Relationships

The SaaS & Support Project Research

SaaS & the Contact Center Technology Market

The Cost of Asking the Wrong Questions

The SaaS Support Forum (TSSF)

SaaS, Support, and Owning the Customer Relationship

It’s Not About the Software Anymore

The Role of the Channel in SaaS Customer Retention

Recorded Webinar: From Income Streams to SaaS River of Profitability

The Evolution of a Publication

Welcome to Customerium

SaaS & The End of Bloatware

The Redefinition of Customer Support

Seeing Beyond Software to Success

A Moment of Opportunity

SaaS: Dark Clouds and Silver Linings

SaaS, Technology and “Let’s Pretend” Profitability

At the Sound of the Bell…

A Conversation About Customer Retention

Penny Wise, Pound Foolish

Caveat Emptor, tar-traps and Customer Retention

The Something New

Customer Service, or Customer Retention?

SaaS: The Last New Customer

SaaS, Paradigm Shifts, and Personal/Professional Survival

Product Definition, Profitability, and The Power To Lose A Customer

Contact Center Profitability: The Job You Save… Could Be Your Own.

Language & The Price of a Gallon of Gas

Adventures in SupportLand: The Scanner Company

SaaS Vendors: Are Your Customers For Sale?

From “Free” to “Fee” – The Challenge of Unbundling Support

The Contact Center Management Technology Research Project

Customer Centricity, and the Ownership of the Relationship

The HotLine: Ten Months After Ignition

Support 2.0 – Let the User Beware…

SaaS: Tsunamis Are Not Small Things

SaaS & The Ghost of Computing Past

SaaS & The Future of Customer Support

By Mikael Blaisdell

Almost five years ago, Bill Gates warned Microsoft about the significant challenge to the company and industry posed by the advent of SaaS. While the new business model has yet to fully reach the gains predicted for it back then, the momentum is building. An ever-accelerating number of traditional perpetual-license software companies are readying SaaS products or have already quietly released them. In the process, a lot has been learned about the magnitude of the change that is SaaS. As company after company has discovered, often painfully, SaaS is not a trivial undertaking. Designing and building a SaaS app is hard. Achieving and sustaining profitability as a SaaS company can be an even greater challenge. In 2010, The SaaS & Support Project will continue its research into these and related issues through a series of online surveys, in-depth onsite assessments, online forum conversations and direct interviews.

More on page 711

By Mikael Blaisdell
Part Of TSSP Member Resources Series

The SaaS & Support Project research into the common causes of lost customer relationships showed that the most commonly identified “departure driver” was Divorce. Either the management of the customer company had changed, resulting in the loss of the internal champion, or the relationship had become distant. One SaaS company CEO described this scenario as a loss of contact ‘at the top’ of the food chain, with upper management either leaving or forgetting why the system was implemented. Three significant questions come immediately to mind: 1) Why are SaaS vendors being taken by surprise? 2) What can be done to save the relationships? 3) How can CEOs stop setting their companies up for churn?

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More on page 688

By Mikael Blaisdell

The SaaS & Support Project research uncovered a lot about the current state of SaaS vendor operating patterns. In my opinion, the most significant finding was the degree to which SaaS companies tend to ignore the ownership of and responsibility for their ongoing customer relationships in their organizational structures and process. While some companies say that they have designated an owner, there is rarely any connection between that role and the metrics applied to measure the performance of it. The result is often the creation of a dangerously widening gap into which potential profits and valuable customer relationships can fall unnoticed, and an unnecessary risk to the company’s chances for long-term viability and success. The path towards closing the gap starts with a strategic decision; a new group is needed, one chartered and equipped to carry the responsibility and accountability for maintaining the ongoing customer relationships on a profitable basis.

More on page 656

By Mikael Blaisdell
Part Of The Definition of Customer Support Series

Thinking that the act of restoring lost functionality in exception situations is somehow of the same stature as the value-purpose for buying the product in the first place is unfortunately all too common, but it’s still flawed. No one buys a product in order to experience a breakage and then getting it fixed. Business products are purchased because they offer the potential for increased productivity and profitability to the purchaser. The real economic value exchange is: I give you an amount of money so that I can use the product to make much more money for myself. If Support is to become a true profession, it will be found in being perceived as a necessary component of that value expression. The new Mission Statement for Support needs to be: “We directly contribute to making more sustainable profitability faster/better for our company and yours – and we can prove it.”

More on page 648

By Mikael Blaisdell

“How many SaaS companies are there?” At the recent On Demand conference in San Jose, I asked several key members of the SaaS community this seemingly simple question. “Around 2,500,” one said. “Most of whom you’ve never heard of because they’re too small to attract much notice.” Other estimates I’ve heard in the past few weeks give the current number of SaaS players at 1,600 to 2,000. More companies are entering the SaaS ecosystem every day, as existing software manufacturers create on demand versions of their applications and new companies are formed. That’s the good news; the bad news is that there is going to be some significant shrinkage in the coming months. Those SaaS firms who have failed to get cash-flow positive will sooner or later hit their “fume dates” when they run out of operating capital. Asking the numbers question only opens the door. Now it’s time for those who want to succeed to deal with queries that should have been answered long ago, and to spark a strategic discussion of vital importance to all concerned.

More on page 633