November 8th, 2006
Huge jump in SaaS adoption plans
Speaking on a panel at today's SIIA OnDemand Summit in San Jose, Abhijit Dubey of McKinsey revealed that a new survey by his organization has found that the proportion of CIOs considering adopting SaaS applications in the coming year has gone from 38% a year ago to 61% now. "That's a huge jump," he said, and he's not kidding. It's an indication of a sea-change in acceptance of SaaS over the past year.
The conference itself is a sign of growing confidence in the SaaS industry. The program is well rounded and there's a broad and deep spread of expertise among the speakers. Attendance is around the 300 mark, which in the august surroundings of San Jose's Hayes Mansion feels like a crowd.
In another session, Accenture's Philippe Vincent spoke of the SI's journey of discovery since starting to develop a SaaS practice a year ago to begin working with salesforce.com. "We've learned that there is a value for partners. There is a place for us to add value as consultants." Opportunities for Accenture include identifying business processes and training people to use them, as well as building complementary application services. "The beauty of building these services is that we can then reuse them for other clients," he added.
"One of the things we have noticed that we actually like is that since the application's on demand, there is a notion of technical risk that has been removed, and that allows us to concentrate on other elements of business risk such as change management. In general it makes us look good."
This was a reference to the fact that there is no technical implementation required for a SaaS application. I had happened to chat earlier with Eric Berridge, founder and CEO of pureplay SaaS implementer Bluewolf, who also mentioned the advantages of not having to do a technology implementation first. It means that Bluewolf can show a customer a proposed implementation and not worry if the customer wants it completely redone, because there's no huge investment tied up in the implementation. That makes it much easier to deliver what the customer really wants.
Brian Jacobs, founder and general partner, Emergence Capital, set out a list of best practices that his firm looks for when deciding whether to invest in a SaaS vendor:
- Pursue the big market — look for unserved or underserved groups of users
- High velocity, low-cost sales channels — concentrate on cultivating inbound enquiries rather than trying to go out and find prospects
- Consumerization of enterprise applications — deliver a self-service environment where a worker can trial, deploy and even integrate into other applications without assistance
- Build a strong service culture — it's about operating and serving your customers 24/7
- Manage the feedback loop — see what features are being used, where customers are stumbling, and revise your application accordingly
- Leverage the value of aggregated data — there's value to be gained from aggregated views of what your customers do with your application
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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