SaaS/Cloud: Tsunamis Are Not Small Things

I had a conversation with the CEO of one of my oldest software manufacturer clients. He’s a veteran, having successfully weathered a number of industry changes over the years with his company, but he made a comment that concerned me. “We can go SaaS at any time,” he said. “We’ve got the code already revised and in place, so it won’t be a big deal if we decide to offer that model.” Unfortunately, the reports of those who have undertaken the journey to SaaS show that it will be a big deal, and the shock will be the worse for the short-range view of the initial decision and what it will bring. For a traditional model product-centric software manufacturer, changing the code to go SaaS is only the beginning, and is the easiest part. The significant challenges will come from the ripple effects of that migration on every level of the company and its people.

Jeff Kaplan is one of the premier analyst voices in and about the emerging SaaS ecosystem. He calls the transformation of an established software company into an On Demand vendor an “inversion” process, for it forces the firm to completely re-think how they operate and go to market. Jeff offers strategic consulting services to technology companies considering entering the SaaS market, and has worked in some capacity with most of the major players. In a newsletter post, he noted that the shift to SaaS will result in the replacement of many of the company’s staff members with a new breed of people that view their jobs and the customer relationship very differently.

Another colleague, Ken Boasso [Keychain Logic], talks specifically about the need the SaaS companies will face in their sales teams for new people, new skills and new approaches. “In traditional-model enterprise software companies, ” he says, “the sales people focus on the features, benefits and presumed ROI of their technology.” If the customer wants heavy customization, the rep is generally glad to sell the services of the manufacturer’s implementation team. Ken’s focus is on helping SaaS-bound companies to recast their sales compensation structures and teams. “The goals, and the behaviors to be encouraged towards them, are different in a SaaS company,” he points out. “The successful SaaS sales rep needs to be in the role of a trusted advisor, knowing the needs of the prospect’s business and how the technology will be used to increase their profitability and productivity.”

The changes that will confront a SaaS-bound company in Sales, Marketing and Development — and in its Senior Management team — are not trivial issues. But an even greater one is looming over the Support team. The days of break/fix are numbered, and the clock is ticking. It’s time for transformational thinking, to re-invent and re-cast Support as a professional role with a significant contribution to make to the profitability of the company.

There are generally two things you can do when a huge wave is headed right your way. One of them is to wait and be swept away when it hits, a course few would recommend. The other is to grab a board and learn to surf.