SaaS & Cloud: Service Beyond The Hype Cycle
Although in reality, business services provided through the Internet are nothing new, the number and breadth of services now available is certainly worthy of note. As a Gartner report recently opined – we are most likely at the peak of the “hype cycle” which in “Gartner speak” leads to the “slope of enlightenment” and eventually to mainstream adoption in the enterprise.
But as asked by Mikael Blaisdell in our LinkedIn Group, Haut Tech Conversations -
“Service certainly appears to be the key element, at least in the name of the business model — but to what degree is that actually manifested in the strategy, organizational structure and behavior of SaaS companies?”
In response to his comment – I would only expand that SaaS vendors are well named but Cloud-based and “on-demand” services in general should also be counted in that basic business question. Is the “Service” we’re offering actually part of the product itself? is it something loosely bolted on – a CRM afterthought? Do we understand the real paradigm shift that is taking hold and we are a part of when we offer an online service? or are we just putting our software up for a subscription sale without a thought as to how the relationship with our end users has changed in the process?
This is more than just a passing question. It is key in the transition to a service-based business model both for individual vendors and for the industry as a whole. To be successful as a service business, every part of the company needs to be examined for strategic alignment and tactical responsiveness. Knowing where to start and where you are going is critical. Fully considered, responsive and properly executed service is the most important element in customer retention. Customer retention in turn is what keeps the cash flow on target in a subscription-based business model. No matter how much hype your marketing department is able to generate, at the end of the day it is the value of the services the subscription delivers that keeps the customer coming back.
So – here’s the rub: We’re moving into a service-based business model when all our recent industry experience is more straight-forward vendor to purchasing relationships. As Steve Plunkett, CTO of Servitizer recently pointed out in his two part blog series – this is an exercise in going back where the industry came from. Companies like IBM and HP made their name from providing the infrastructure, hardware and support, bundled as services, to enterprises before the ubiquitous personal computer and commodity servers entered the picture. When personal computing became the reality, those service providers transitioned to being hardware and software vendors – divesting themselves of accumulated knowledge, services and consultants along the way. Now they face an army of new entrants in the field that are quickly “eating their lunch” as they try to transition back to being service-led. Just like I mentioned at the individual business level – every part of the industry is having to rethink their roles – Software vendors, infrastructure providers, VARs, and outsourcing organizations all face tectonic shifts in their business models and customer relationships.
I’ve been in the business long enough and in the right areas to see the transition and in some cases to have made a little money helping companies get from service to simple vendor relationships and from being an organization that was dependent on outside services to one that could operate entirely on an internal resources. We’ve gone full circle. We’re back to helping companies and vendors cross to service-led models.
But – quite honestly I don’t have all the answers. Regardless of the fact that we are circling back, there are still a lot of differences both in customer expectations and the capabilities services can offer. So comes to this: The first in our series of Haut Tech Conversations and best practice blog entries around the issues and technologies involved in running a SaaS, Cloud or on-demand service.
This is the kick off blog post. In a real way I started this post by opening a Linkedin Group called Haut Tech Conversations. I invited a lot of my friends in the industry and am continuing to plow the field for more. I posted some starting points as discussions and the links from the first paragraphs of this entry come from the conversations that grew out of those. I didn’t write this alone and I don’t intend to carry the ball alone either.
The name for our LinkedIn group is not a whim. We’ve set up a podcast feed on BlogTalkRadio that is not coincidentally also called Haut Tech Conversations. The real value of BlogTalkRadio is that we can host a podcast that can be streamed live, with guests, panelists and listeners chiming in. We can release it via iTunes so people who could not join us live can download the podcast and listen at their leisure.
As the title of this article proposes, our first subject is the core of the exploding Internet services market broadly – Services as a Product. Our guest will be Steve Plunkett, CTO of Servitizer. whose core business is helping companies that are moving into this market manage their service-based products. We will also have three panel members – Luis Aburto, CEO of Scio Consulting, Mikael Blaisdell of The HotLine Magazine, and Lincoln Murphy of 16 Ventures. As the name suggests – this is not intended to be a webinar or canned presentation. This is a conversation – first between myself, the guest and our panel, then with members of our live audience and finally – with the broader social media sphere that we all leverage as a part of our efforts. Our show is scheduled for Wednesday August 19 2009, 10 am CDT. You can find show details and our call in number on the BlogTalkRadio show page for Haut Tech Conversations
What I hope will happen is for others to present their own take on the subject in their blogs, on the LinkedIn group and here so we can sum up before the next podcast in our series. I encourage you to join us on LinkedIn, Facebook, Twitter, your blog or here to continue the conversation. As has been said many times – no one of us is smarter than all of us.
In addition – we also have a webinar titled Leveraging Cloud Services, coming up with Rick Nucci – CTO & Co-Founder of Boomi, Rick Chapman, CEO of Softletter & SaaS University, and our own Luis Aburto, CEO of Scio Consulting. We will be covering the broader aspects of “integration” and why using cloud services rather than trying to build connections to both outside functionality is a key consideration for SaaS vendors. I can tell you personally as I’ve worked in the field of enterprise integration – it isn’t a simple issue. Keeping track of all of the shifting pieces can be quite a challenge for a company with a line of business focus. If being part of the broader SaaS ecosystem is on your radar, I hope you will take advantage of this opportunity. Please take a few minutes and sign up for this important webinar:
