Software as a Service (SaaS) continues to revolutionize the software industry. Starting with industry pioneer, Salesforce, the traditional model of software deployment has evolved to an online services model, which is easier to install and manage and is replacing traditional enterprise software applications.
I’ve personally deployed Salesforce within a half dozen companies, and it’s hard to beat. More recently Service-now.com and several similar firms have emerged to challenge traditional call-center applications such as Remedy with online versions. Gone are the days of problematic software updates. It happens automatically overnight while we spend time with our families.
So what’s holding back the rest of the software industry? Clearly Salesforce, Service-now.com, and others have the newcomer advantage with no legacy business model or technology to transform. It’s a significant challenge for the established players to completely re-invent themselves.
The online subscription challenge
One key challenge is the need to understand SaaS billing systems. Converting from a one-time sale with annual maintenance to a per subscriber, per month billing environment with prorated services is time and labor intensive. In addition, many SaaS applications must contend with variable costs that are allocated across individual subscriptions, such as data-service fees in the Mobile Resource Management industry.
Recently the founder of Salesforce, Marc Benioff, is taking yet another industry leadership role by investing in Zuora. Zuora offers a SaaS platform for companies who want to build SaaS solutions without having to create the associated online subscription solution. The CEO of Zuora is Tien Tzuo, the eleventh employee of Salesforce and creator of Salesforce’s subscriptions billing system. This is a simpler, less expensive way for companies to offer online subscription services, and the market for Zuora’s product is substantial. Within my small community of consulting clients, three companies are perfect candidates for their solution.
My hat is off to the Zuora team. Their services are a great value-add and come at the perfect time for the industry’s continuing transition to SaaS.
