Since the dawn of enterprise software (think IBM, think Digital Equipment Company, think Data General), the way companies have sold and implemented these solutions has always been the same:
- Customer purchases a software ‘license’ whereby the customer can use the software for a specific purpose within their business (upfront cost)
- Customer purchases hardware (servers, storage, etc.) to install and run software on (upfront cost)
- Customer pays software company, or 3rd party system integrator, to implement said solution
- Customer waits for a said solution to be implemented (think project manager, Gantt charts, numerous status meetings with PowerPoint decks; let’s not forget scope changes)
- System finally goes live. >> Inject time and stress here <<
But wait there’s more about SaaS (Software as a service)
- Customer purchases software ‘maintenance’ on an ongoing yearly basis. This fee is typically 20% per year of the original software license cost
- Customer either pays software vendor, 3rd party system integrator or assigns own staff to provide ongoing support (think ongoing user support, data backup, server maintenance, etc)
As a disclaimer, I grew up in this model, spent many years delivering solutions in this model. I’ve earned my project manager ‘stripes’ in this model. I’ve come to love big, high-stress software projects.
Ok, I think I just scared myself, let’s get back to my point.
I stand in front of you today, as a P&L guy, as a CEO, as someone that flies around the country to drive this economy forward; that entire model of how enterprise software is sold and deployed is dysfunctional and inefficient.
With the advent of SaaS (Software as a Service), there is now a better choice. Ok, I know what you are thinking, please not another blog post on how great the cloud is; nope, that’s not the point.
The point is that SaaS completely changes the status quo on how software is sold and implemented.
No more upfront purchases of software ‘licenses’, no more hardware to buy, no more 3rd party integrators. Big, high-stress implementation projects have now been replaced with much less complex (and less stressful) execution models that are focused on getting your business up and running.
Some IT managers will be weary of the technologies. Change isn’t easily accepted, but like anything else, once you experience the streamlined and highly functioning SaaS model, you’ll be likely to make the switch. Once implemented, you’ll be more competitive than your antiquated peers.