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Showing posts from March, 2010

SaaS Pricing Models (part 1)

There has been a lot of discussion of how a SaaS offering is priced. Different vendors use different pricing models. To the untrained eye it may seem that they don’t know what they’re doing. But, obviously, this is not the case. Vendors have thought a lot before applying “this” or “that” Pricing Model and you can rest assured that they’ve also done their competition research.

Today, we shall explore the different Pricing Models of SaaS (we shall focus on SaaS; what you are about to read does not necessarily apply to PaaS, IaaS or other forms of “aaS”). We shall also try to approach an answer on why similar pricing models of similar applications can diverge so much from each other.

Pricing per user, per month: This is a very common practice that reflects the fact that the criticality of the application on the Business functions is proportional to the number of users that are using it. It is attractive to the Buyer because it is very clear to him what is going to pay on “day one” and wha…

Is SaaS an enemy of the IT Manager?

The Internet is full of comments and blog entries that praise the benefits of SaaS, against in-premise. I have also done this (praising)! Of course, most people accept that in-premise has not reached its end (and first of all, Microsoft that preaches “S+S”, Software plus Service); but also most people see the benefits of SaaS…

OK, so why don’t “most people” embrace SaaS in an “absolute” way? By “people” I mean the in-house IT managers of the Enterprise-Buyer and by “absolute” I mean “right here, right now”. We ARE in the middle of a financial crisis and we MUST cut down on internal costs, NOW, right? Today, I shall explore the reasons why the IT Manager is still reluctant to embrace SaaS and also try to answer each one of his/hers concerns. So, what is the average (and forgive me for saying this) and not so SaaS-educated Manager thinking?

I will have no control on the critical business applications, like I do now. Wrong: You will still be the key player on designing user procedures and …

Integration vs Best-of-breed

Today I shall dive into the waters of two different implementation philosophies or “schools” if you prefer: What is the best solution for enterprise-wide Software? One integrated system that “does it all” or a selection of systems/modules, each of which is (or tries to be) the industry leader in its sector?
It is not an easy answer and I’ll give you a hint right from the start: It also depends on local market habits.

First, I’d like to share a couple of experiences that totally changed the way I (as a software supplier) see things:
During my company’s research of the automotive industry in USA and its effort to establish its presence there (in the US), I shockingly found out that there are car dealers out there that use 3 or more systems to do their job: A dedicated system for the car sales, a system for the repair shop, one more for the parts management and nothing regarding Accounting (this is something that their accountant is doing in a “black box”). My first reaction was: “are these…

Customization: an enemy of SaaS? (part 2)

This is part 2 of the same issue: Is Customization an enemy of SaaS?
In the previous entry, I referred to some examples that will create pressure to the SaaS Vendor because a) these Change Requests are “logical” or “rational” on behalf of the Buyer and b) they are technically complex.

Now let’s see some more aspects of the problem:

Example #3: Look’n’feel
Let’s assume that your SaaS platform has covered some ground in the area of personalization, color schemes, logos etc.
Now, a new customer comes along and requires some extra elements of personalization that your app does not cover. E.g. I recently hit on a case that the customer wanted the color scheme in all web forms to change! Another customer said that “the correct way to place fields in the customer file is last name – first name and not first name – last name”. He actually wanted to swap the positions of these two fields because he felt that his users will have difficulty adopting the “layout of the new system”. Questions:
Do you ac…