Business

As an entrepreneurial law, SaaS law and private equity attorney, I often help SaaS clients develop and revisit business strategies.  I came across a good blog post this last week on Information Week addressing six things that SaaS businesses should do to be more attractive and gain acceptance in the marketplace. 

I found numbers one through four particularly helpful:

1.    Get Solid, Believable Commitments From Microsoft, Oracle, And SAP. The idea here is that large software companies of this type enjoy massive customer and partner ecosystems and consistently have good earnings and revenue growth and, therefore, SaaS businesses should look for opportunities to collaborate with these types of established vendors.

2.    Escalate From "Very Good" To "Excellent" Uptime Ratings.  In order for SaaS providers to gain the trust of IT managers, they must provide transparency - in this case, transparency into where their data centers are, who runs them, and whether they have a disaster recovery plan.

3.    Offer Cheaper, Easier Integration. IT managers are demanding more ease of integration from SaaS tools.  According to Information Week, “That includes forging active technical partnerships with traditional software vendors to ensure smooth integrations, and ensuring their offerings stay up to speed on the integration front with a traditional vendor's software upgrades. Otherwise, it'll mean more integration work for the SaaS customer.”

4.    Prove That SaaS Is Less Expensive Than Traditional Software.  Especially in today’s economic climate, SaaS offers pricing models that are more appealing to customers – including lower up-front costs than traditional software licensing.  Yet SaaS can require substantial money and resource investments, particularly if integration with on-site software is required.  SaaS providers need to prove that the total cost of ownership of their SaaS applications is less than on-site software applications.  

Summary: Consider collaborations, show transparency, provide ease of integration, and prove cost savings.

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See also:

SaaS in 2009 - Positive Outlook
Cloud Computing in 2009 - A Trend in Hosting
Open Source in 2009
Private Equity in 2009 - Don't Give Up