Looking at some of the recent headlines in technology, two topics stand out: the Workday IPO and the new iMac. Workday’s recent successful IPO has caused many to ask, “Is this a validation that SaaS works?” I think that question has been answered long ago. With 8 out of 10 startup companies being SaaS, this business model is not a fad; it’s clearly here to stay (at least until a new model disrupts the market). Workday’s success only confirms the strength of SaaS, and the willingness of investors to get on board with the reality of the new business model. The news from Apple that the new iMac will ship without an optical drive may seem revolutionary, but should not come as a shock if you think about the overall move toward the Cloud.
What both of these news items emphasize is that the model for online delivery of content and services continues to solidify and grow. SaaS and online delivery are both driven in a push-pull fashion. Their popularity and viability are not only enabled from the top down by the technology that supports them on the software companies’ side, but also from the bottom up, by the actual apps and devices in the hands of the end-users, constantly fueling the demand.
Going back to the news confirming the power of SaaS, we spoke to Rhett Glauser, Director of Corporate Communications at ServiceNow, another SaaS provider who tested the IPO waters this summer with positive results. ServiceNow, having been around for nearly 10 years, is a true pioneer of SaaS and a leading provider of Cloud-based services that automate enterprise IT and operations. We invited Rhett to give us some recommendations for software companies that are making a transition to SaaS, or starting out as SaaS. Making the shift or just getting started can be tough, so we asked where companies should focus, as well as what would he advise them and why—kind of a “recipe for success.” His reply was fast, simple and clear-cut: Don’t fake it!
While Rhett feared his answer might not be popular with many vendors out there, let’s face it—authenticity is the reality. The rapid pace of development and innovation that has been brought by SaaS has led to shifts in buyer expectations (both consumers and businesses), to the consumerization of IT (by the way, consumerization is a word that should be added to the “Office thesaurus”). Changing expectations on the user side have necessitated a sea change in the relationship between software vendors and customers, which is now ongoing.
In SaaS, the “service” component becomes even more important than the platform or the product: with many technologies being more or less equal, it’s the service that truly makes a difference. Rhett emphasized that making SaaS work truly means putting the customer first, despite the fact it might be more difficult, or a bit more expensive. Continuing the theme of being genuine, making a true investment in the customer relationship will always pay off in the end.
A final word of wisdom from Rhett? “Start from scratch and just do it right from the beginning, if you want to be successful.” This approach seems to have worked for ServiceNow, which has had a healthy evolution for almost ten years now. Read the full interview here and let us know your recipe for success in the business of software as a service.