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What SaaS Should Do To Catch On

While Software-as-a-Service generates a lot of buzz, some small and midsize companies are hesitant to jump on the SaaS bandwagon for fear of it being a fleeting trend. What will it take for SaaS to gain acceptance?
While Software-as-a-Service generates a lot of buzz, some small and midsize companies are hesitant to jump on the SaaS bandwagon for fear of it being a fleeting trend. What will it take for SaaS to gain acceptance?SaaS seems to be ideal for the small and midsize market -- low and predictable costs, robust feature sets, rapid deployment, and no in-house IT support. Why, then, don't all companies make the switch from standard, licensed software? Here are six things InformationWeek identified that SaaS must do before businesses entrust it fully:

  1. Get Solid, Believable Commitments From Microsoft, Oracle, And SAP. "Most large, global companies won't walk away from their heavy investments in companies like Microsoft, Oracle, and SAP, which enjoy massive customer and partner ecosystems and consistently good earnings and revenue growth," says InformationWeek. While that's likely true, this is also an opportunity for smaller businesses to make a dent in the SaaS market. They're the ones who are able to be more innovative since they have fewer people -- such as board members -- to answer to.
  2. Escalate From "Very Good" To "Excellent" Uptime Ratings. Much like what people are expecting from the new Obama administration, in order for SaaS providers to gain the trust of IT managers, they must provide transparency -- in this case, transparency into where their data centers are, who runs them, and whether they have a plan in case of a disaster.
  3. Offer Cheaper, Easier Integration. Thankfully, there is progress being made on the integration front, with, for example, integration available to the masses -- which earned the company a bMighty Innovation award.
  4. Prove That SaaS Is Less Expensive Than Traditional Software. One of the attractive points of SaaS is that its up-front costs are significantly less than traditional, licensed software. But what about in the long term? What's the ROI from switching to SaaS?
  5. Build A Better Record Of Profitability And Growth. InformationWeek points out that the major SaaS providers tend to not be extremely profitable -- if at all. And that even a success story like Salesforce.com has its critics, with one analyst saying, "we continue to believe Salesforce.com is struggling in the enterprise." InformationWeek warns that though venture capitalists do invest in SaaS startups and older SaaS companies, "the funds will dry up if the profits don't start pouring in."
  6. Convince Customers That They Can Live Without Customization. While customization is something that may be vital to large enterprises, small and midsize companies are used to streamlining. Besides, there's always Platform-as-a-Service, which leverages the Internet to make it easier to develop and deploy custom-tailored SaaS applications that do exactly what companies need.

Sense a theme here? In order for small and midsize companies to embrace SaaS, they want documented facts that show SaaS is safe and will save them money. And the needs of growing companies are different from those of megacorporations.

More From bMighty: SaaS For Your Business