Walter Adamson

Managed services are not SaaS - it's about Marketing Martha

Debates rage all over the planet about SaaS and what it is and is not. Some claim, as they do for Cloud, that has been "around forever" and is just marketing making up new jargon.

If you are a Linkedin member you can check this discussion where one of the participants insists that SaaS has been here for 30 years and that it was invented by airline industry who continue to understand it best.

For my part, I disagree that Cloud is not something new (according to my definition) and that SaaS is not something new - again according to my definition. 

In fact I think the reason that many software companies fail to make to transition to SaaS is precisely because they limit their thinking, and their business transition, to the "on demand" mindset, or the "managed service" mindset. That's way I was pleased to read the work of Michael Dunham of Scio who has written two very useful articles - SaaS & XaaS: What Makes Up A "Service?".

I particularly noted this comment: 

ISVs build a lot of expertise in building software and internal operations to fit that model – expertise in managing the development, marketing and sales processes to match the cyclical nature of licensed software sales. Moving to an incremental revenue model is one aspect of SaaS and many ISVs have made the transition – however difficult that might be. But when it came to marketing the product – they are still selling it as a technology – even if they see it as embodying special expertise for their market and not as a service.

That's why we focus on the business modelling and the Go-To-Market transformation for ISV's to SaaS, and why we have explicit frameworks and methodologies to address this issue.

Michael continues: a true SaaS product needs to embody the relationship between the vendor and the end-user community they are serving. But – unfortunately – very few vendors have figured out how to market that service-based relationship successfully. Not just because it is hard for established vendors to do – primarily because it is just not a part of their strategic view of their product. They still see themselves as technology vendors, not as service providers.

And he addresses the business modelling and cash flow issues, which we also focus on: Further, the standard model conveniently supported a split set of payments to the vendor. The vendor set license fees for the product and a separate set of support and maintenance fees to provide ongoing services. In other words, the support services were almost an “optional add-on.” Those same vendors, moving to a “as a Service” model, have to rethink their cash flow and put services in all its various aspects up front while still maintaining enough bandwidth to support ongoing development.

These ARE the big issues, along with business agility, in converting to a SaaS model. It's nice to see others confirming our experience, which we have gathered over hundreds of assignment. Mikael Blaisdell of MBlaisdell & Associates contributed to the discussion, and I often find myself agreeing with him on SaaS business matters.

| 09.09.13 | Ramblings in social spaces and places

Where I've been this week in the social web's places and spaces:

• For Linkedin members, SaaSblogs Software as a Service Group, the discussion rages over the question "SaaS & XaaS: What Makes Up A Service - Part 2?",  latest poke:

SaaS and many ISVs have made the transition – however difficult that might be. But when it came to marketing the product – they are still selling it as a technology – even if they see it as embodying special expertise for their market and not as a service.

• Also for Linkedin members Why do so many marketing professionals not know how to use linked in properly? caught my eye.
• Facebook is king of the social networks, but the New York Times claims there is a Facebook exodus. If you have nearly 300m members and 5% churn then that is a lot of people who potentially want to broadcast their "bad news" story about FB. From a social media strategy perspective it makes no difference whether they exit or not.
• Signed up for the Black Diamond continuing education program of the Social Media Academy. It's an exciting professional program, and I'm looking forward to participating with the other Certified consultants and business managers.
• Is your brand taking advantage of some of Twitter''s lesser-known marketing opportunities? iMedia has a good set of examples.
• Read that J.C. Penney Co., the third-largest US department-store chain, bought ads on Facebook to draw users to its own page (as US back-to-school shopping got under way). Said Nick Bomersbach, vice president of the retailer’s jcp.com. J.C. Penney’s Facebook page went from having about 22,000 "fans" to almost 500,000.
• Forrester Research says that Australians spent $23b online in 2008, with estimated growth of 9% annually to $32b by 2012. eBay's Deborah Sharkey quoted statistics from the Australian Payments and Clearing Association indicating that 43% of the $23b spent online in 2008 went overseas, reported David Trewern from the Australian Online Retailer conference.
• Telstra announced the closing of its original blog Now We Are Talking "After a review of where we were headed with our online communications and how best to engage with important stakeholders like you, we have decided to close our nowwearetalking website and develop a new, more engaging, interactive site under the main telstra.com umbrella".

| 09.09.06 | Ramblings in social spaces and places

Where I've been this week in the social web's places and spaces:

• For Linkedin members, the discussion rages over the question "So what is branding, anyway?",  latest poke:

I'm not seeing that many marketers in my sphere are ready for the changes which social media is going to rain down on them, and their brands. If we look at the upside, for the believers in the deep meaning of brand, as you've explained, and the holistic meaning of marketing, it's a great opportunity.

• Registering and checking out the new Clive Peters online shopping site, "a multi channel or cross channel experience for new and existing Clive Peeters customers" (from Internet Retailing). They've done a good job, a few small user interface disappointments but overall really well done. Wondering when they will add "click to call" and also a community, especially for reviewing stores.
• Checked out the Russell Herder Social Media Research study - which they did with Ethos Business Law. RH is an agency, and Ethos is a legal services firm - not the obvious partners for a social media study. But the results are worth reading.
• Signed up for the Black Diamond continuing education program of the Social Media Academy. It's an exciting professional program, and I'm looking forward to participating with the other Certified consultants and business managers.
• Enjoyed Dan Neely's post How to evolve brand management for social media in iMedia Connection because it had some useful actions - I blogged about it here.
• Was keen to read A revolution in interaction by McKinsey but required Premium Membership. I twittered my request and was picked up by @McKQuarterly who gave me a free pass - see McKinsey scores in social media - revolution in interaction.

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A selection of my comments in the social media.
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Shared from my Google Reader, with notes.
Interested in Software as a Service? Listen to my colleague Michael Dunham - Haut Tech Conversations | Blog Talk Radio Feed