As Will Rogers once said, “You’ll never get a second chance to make a good first impression.” This statement alone sets the bar for Software as a Service (SaaS) offerings that all successful enterprises should strive to meet. SaaS companies are all around us, and most have opted to accomplish their success by shifting to sell ‘access’ rather than ‘ownership.’ Prime examples can be found in almost every industry, from music subscriptions to movie streaming services. Simply put, access is the name of the game.
Examining how buying access became so popular brings up clear reasons: it’s convenient, affordable and allows both companies and people to buy what they need at the exact moment they need it. A few examples have become central to many people’s daily lives. Spotify forever changed the way that people listen to music by allowing them access to any tune at any time in any place, without owning it. Netflix changed the way consumers watch movies and television series by providing access to a full season of streaming video uninterrupted by commercials.
From an enterprise and business perspective, shifting to Microsoft Office 365 changed how we use Microsoft’s products by eliminating the need to install software. We always have the latest version. Salesforce took Customer Relationship Management (CRM) to the cloud, sweeping away any challenges with installation, maintenance and upgrades. For busy executives, this first move to SaaS-powered solutions gave them more time to focus on their business, build relationships and improve sales processes; all of which proved to be a huge value-add for Salesforce customers. Other examples that have replaced many traditional businesses include Airbnb, Uber, food delivery and fresh meal kits, professional services and ecommerce.
Shifting from an ownership to access model creates a watershed moment that requires extraordinary performance. Success in SaaS is measured by Customer Lifetime Value, so creating an extraordinary experience for customers is what keeps them coming back. To provide this experience, SaaS service providers need to be timely, relevant, consistent, and above all else, add value for customers by rewarding them with time, unique insights and a fulfilling experience.
What SaaS Needs
The decision to shift from selling ownership to selling access to software is just the beginning. The next step is to create a new delivery model, transforming how to build, sell, manage and support software. This in turn means a heavier reliance on R&D, as they not only build the software, but also operate it. Merely testing new subscription models or creating a new model on top of traditional perpetual licensed software won’t cut it in the SaaS world. The customer experience must be a key focus and can’t be riddled with friction. The long upgrade cycles, tedious configuration scenarios, and endless dependencies must be left behind in the software development of the past. Looking ahead, aligning to common software principles, cloud-native and the Common Software Foundation (CSF) are key requirements to SaaS readiness. This combination will drive the positive customer experience that will be the core pillar of an access-based model as developers progress towards a new digital horizon.
What SaaS Should Offer
A key ingredient to success with SaaS is offering the right service for what each customer needs. This means going beyond the ability to seamlessly deliver results to also create an emotional connection with customers that inspires anticipation. In the world of entertainment this is called a cliff hanger, a scene that leaves viewers on the edge of their seats wondering what’s coming next. Creating a cliff hanger moment for software products or the latest updates is not for the faint of heart, and developing teasers that stimulate customer curiosity requires proficiency.
As the software development cycle unbundles products through the use of open APIs and microservices, the sales process can begin selling access to a portfolio on an à la carte basis. Going beyond this first step, capabilities that could be a foundation or building block into something bigger and better must be highlighted to the client. In addition, opportunities to build on these services by way of a Solutions as a Service model that customers can’t live without must be capitalized on.
Some clues about what to prioritize for SaaS are found in , which notes that “SaaS-related telecoms software revenue is expected to grow to USD10.7 billion in 2023 (10.6% of the total spending), led by Communication Service Providers (CSPs)’ spending on new, 5G-enabled services. SaaS will account for 16% of overall BSS spending in 2023 and 12% of the total OSS spending.”
Specifically, SaaS-related revenue in the Operational Support Systems (OSS) market is expected to be driven by (CSPs) spending on network automation orchestration (NAO) and business analytics), while SaaS adoption in the service design and orchestration (SDO) and automated assurance (AA) sub-segments will be more-limited. The adoption of SaaS delivery is proceeding more quickly in business support system (BSS) applications that are customer-facing than in open source applications that are network-facing and more directly linked to network performance and security. Customer Engagement has sat on the top of the BSS priority list for the past few years, so the next batch of SaaS offerings will come from similar segments.
No second chance at a first impression
A recent Gartner report concludes that SaaS is the fastest growing IT market, and that almost all market segments within the enterprise world are being driven by SaaS adoption. Gartner notes that “SaaS is gaining more of the new spending, although licensed-based software will still be purchased and its use expanded through 2023.”
Succeeding in SaaS means more than adapting a business model. It also means an unwavering commitment to delight customers, because end-users remember their interactions with service providers and will factor that into their decisions to stay in business with a company or find a replacement. Simply put, service providers need to make an impact and forever be remembered.
