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“The Death of Traditional Software Product Management”

By December 15, 2012Article

The above eye-catching title is the subtitle of the first chapter of a new book on SaaS. Whether you agree or disagree with that premise after reading the chapter is beside the point. The real point is that not only does SaaS change how you interact with your customers, SaaS is evolving and new types of customer relationships are developing.

It is always difficult to find up-to-date information on the Software-as-a-Service industry since everything is changing quickly. I am always looking for good books and resources to recommend on the topic and I just finished reading “SaaS Entrepreneur: The Definitive Guide to Success in Your Cloud Application Business,” by Merrill “Rick” Chapman. The first thing to understand about this book is that it is brand new, just released in the last couple months; so it is very up to date.

The book is targeted at entrepreneurs that are starting a SaaS business, executives converting an ISV business to SaaS and current SaaS providers. Whether you are just learning about SaaS or are an expert, there is information that you will find useful.

Rick has published an annual survey on the state of the SaaS business for the past several years and included in the book are conclusions based on the data in these surveys. Many graphs and charts show the survey results in all areas from marketing and sales to engineering, and it is refreshing to see conclusions in a book that are supported by data. Few comprehensive resources have this level of current data. There are also many case studies in the book that talk about the challenges a particular business faced and how they addressed it and what the results were. Candid case studies are always particularly useful.

I particularly enjoyed the introductory interview with Zach Nelson, CEO of Netsuite giving his views on the industry and how Netsuite views the SaaS world. Zach is one of the pioneers of SaaS and provides excellent advice.

I also found the case studies on Plex Systems, a leader in using customer communities to drive their product strategy; Servoy, an open source Platform-as-a-Service provider, a leader in Open PaaS; and Apptegic, a startup providing customer engagement analytics, to be of particular interest.

The book covers all functional areas of a SaaS business and also focuses on some of the key activities such as marketing and pricing. I found the section on sales compensation one of the more comprehensive resources on this topic including information on actual compensation practices and percentages. The section on international growth has good information on what markets may be the best alternatives for expanding your business internationally and talks about which countries it makes sense to stay away from for a while.

The first chapter is on the topic of customer communities. Clearly more SaaS companies are going to be developing communities; and although it isn’t clear exactly how that will evolve, Rick puts forth his view of how customer communities will drive SaaS businesses in the future.  Clearly SaaS businesses that have strong customer communities have an asset that is of great value to their businesses. This chapter includes information on how to set up communities, how to manage and lead communities, how to measure community managers and how to increase the monetization of communities.

If you are in the SaaS business or thinking about it, this book is worth the investment of your time. Few books on the topic provide as much insight into the current state and possible future of the business. You can read excerpts or purchase the book at

Paul Ressler is a consultant specializing in service delivery for SaaS, cloud computing and managed services. As the principal of The Cirrostratus Group, Paul helps his clients improve customer satisfaction, raise service margins, introduce profitable new services, and transition to the SaaS business model.

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