If you’re tapped into the enterprise software community, you know that SaaS is the hot new topic of software delivery. The cloud computing phenomenon is taking center stage in the enterprise tech community. For good reason, the SaaS business model and approach to software is completely changing the dynamic of enterprise software.
Much of the attention around cloud computing has focused on the innovation of the Web-based architecture. In the race to compete against SaaS companies, many legacy vendors with older client/server offerings have evolved their technology to offer Web-based deployment.
But the innovation of SaaS isn’t just about Web access to software. I can think of five other reasons that the disruption of SaaS companies is about more than the Web access to software and the browser-based user interface.
1. Cloud companies attract hot tech talent
Highly talented individuals like to work at companies where they think they can make a positive impact. Today, many cloud computing companies are in the start-up or expansion phase of their business. This, combined with their culture of innovation, has led to SaaS companies luring in some of the brightest engineers from the Ivies, Cal Poly Stanford and other prestigious universities. In addition to being able to work for a small company and have their ideas implemented, these talented individuals feel they are part of a mission to grow. As an added bonus, developers at SaaS companies get to spend most of their time developing new technologies from scratch.
2. Multi-tenancy simplifies development
Building on a multi-tenant architecture makes the development and deployment of software much faster and easier. Where it might have taken a couple of years for legacy vendors to get all their customers to convert to a new version of software, SaaS is able to do it in a few days – rolling out the update to all their customers at once. With a SaaS program, buyers can modify their metadata – the data that defines settings and customizations for each customer – without altering their core application code. This allows buyers to keep their modifications intact when a new system update is rolled out.
3. SaaS makes buying software easier
Purchasing enterprise software has historically been a fairly time-consuming and difficult process. There’s a lot of up-front research that’s required in order to find the right software system to match businesses’ needs. To make matters worse, systems are often accompanied by complex pricing schemes. SaaS companies have greatly simplified the pricing scheme of software by offering their system under a subscription pricing model. Beyond the way SaaS is priced, however, cloud vendors are changing how the enterprise consumes software. More specifically, SaaS companies often publish software subscription prices right on their website – making it easy to purchase by credit card and even offering free trial downloads to interested buyers.
4. The user experience is an obsession
The user experience takes center stage in the SaaS development model, after functionality, of course. SaaS companies understand how to make their users’ experience as simple and familiar as a Google search or making a purchase on Amazon. During development, SaaS companies borrow several common Web design methods such as A/B testing, user groups and eye tracking. This all leads to a more pleasant user experience and one that helps buyers get more out of the software – without having to go through extensive training. Designing a more intuitive system that reflects the look and feel of a popular Web browser has a great pay-out -it keeps customers happy.
5. Younger employees get the web
The final advantage is that SaaS companies get the Web. Many of the employees of SaaS companies grew up with the Internet and understand how to use it to market and sell. Because most SaaS companies are in the early phase of their business, they lack a legacy marketing environment. That means they typically have greater flexibility and freedom to aggressively pursue Web marketing tools such as SEM, SEO, and lead generation. Since more buyers are flocking to the Web for information, SaaS companies are waiting in the wings.
The innovation of Web access is certainly a game-changing innovation, but it’s not the only thing that’s disrupting enterprise software as we know it. The full impact of cloud vendors goes well beyond the Web-based architecture and browser-based user interface.
Derek Singleton is an ERP Analyst at Software Advice. This article is adapted from an original piece published by Software Advice, a free online resource that reviews manufacturing software. View the original article here.