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David Sims - TMCnet CRM Alert Columnist[April 7, 2005]

Software as a Service Examined

By David Sims, TMCnet CRM Alert Columnist

Britton Manasco, a consultant with Prime Resource Group, has an interesting take on software as a service posted on the SandHill.com Web site.

Excerpts follow, but go read the whole thing:


The Software as a Service (SaaS) model suggests an array of immediate value opportunities: low upfront investment, subscription pricing, reduced risk, ease of implementation and web-based access. Less explored, however, is the rest of the value equation. How, in other words, will the model help us help our clients rise to higher levels of business performance?

The SaaS movement clearly has momentum. The software industry is “no longer about ‘what,’ it is about ‘how,’” stated Ray Lane, general partner, Kleiner Perkins Caufield & Byers and former president of Oracle, in his keynote at the Sand Hill Group’s Software 2004 Conference last spring. Arguing that software companies are increasingly focused on collaborating with their clients to achieve success, Lane concluded, “The software business is becoming a service business.”

As Lane suggests, there is something timely and powerful about software being offered as a service. As they say, why buy a generator when you can purchase low-cost electricity from the power company? But what strikes me as particularly important about this movement is the potential for dynamic and accelerated learning that it enables.

Take RightNow Technologies. While this "Hosted CRM" company now offers a full suite of offerings spanning sales, marketing and service, it focused, initially, on enhancing customer service capabilities in the contact center. RightNow provides its clients with multi-channel capabilities and business analytics within a framework of best practices transfer and performance enhancement.

What stands out as particularly promising is the active and perpetual learning that such intimacy enables. Traditional software companies often have been accused of “throwing product over the wall” to the customer. Once implemented, vendors typically have had no real visibility into how their product is applied and what is learned over time. The software-as-service model, however, enables RightNow to more easily track client performance with precision, insight and immediacy.

As this example shows, the SaaS model can help companies track application usage on a continuous basis. But the tracking also opens up new, higher-value strategy and business discussions. Software-driven, solution providers now can rapidly flag problems, but they can also advise their clients on how to generate business performance gains (beyond the application itself). RightNow's business consultants can address key client executives with a wealth of documented findings and analysis. This leads to highly engaging conversations, opening the door to more extensive, valuable and loyal client relationships.

David Sims is contributing editor and CRM Alert columnist for TMCnet.

To discover how contact centers can save money and increase productivity by making the switch to IP Telephony, be sure to attend TMC's IP Contact Center Summit May 24-26, 2005, in Dallas, Texas.

Purchase reprints of this article by calling (800) 290-5460 or buy them directly online at www.reprintbuyer.com.

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