Innotas: Ten Predictions for SaaS

Market strategy reportedly “will trump technology in determining which SaaS (News - Alert) companies will be successful,” while the key to driving adoption will be “better product integration and alliance with other SaaS companies,” according to Demian Entrekin, founder of on-demand PPM (News - Alert) provider Innotas.

 

On-demand, or SaaS products are usually less initially expensive and quicker and easier to implement than installed products, they can be deployed in days or weeks and are adaptable with ability to add or delete seat licenses to correspond with fluctuating business needs.

 

Entrekin recently identified what company officials say are 10 trends that SaaS companies should think about as they work toward driving growth and adoption of on-demand applications in the marketplace.

 

First, “it’s the product, stupid!” Due to the emphasis of “Try It Buy It” approaches for marketing SaaS applications, product management and product marketing teams are forced to push more of the “whole product” and “solution selling” concept back into the product itself. Instead, developers should focus on incorporating business process into product features.

 

Also, Innotas officials say, think software without borders. Applications are becoming less and less restricted to a particular organization and more oriented around user networks. This has the effect of making the applications more user-centric rather than organization-centric. Paradoxically, this is good for the organization since it will lead to better adoption.

 

Third, according to the San Francisco-based company, first impressions come first. SaaS applications have a few minutes to make an impression, and the first three minutes are critical. If you can create a sense of value in three minutes, you’re off to a great start.

 

Next, pinch your pennies. COGS and Gross Margins are financial metrics that should drive the technology strategy – “the ability to support a reliable, scale-able service at a low cost is becoming a bigger and bigger advantage,” Entrekin says.

 

Fifth, Tier 1 support reigns. Now that there is less and less room for fancy, high priced consultants to answer the fancy, high priced questions, Tier 1 support will take on a bigger and bigger responsibility to represent the company and answer tough questions during the sales cycle. Will a good FAQ cut it? We doubt it.

 

Entrekin also says it’s important for SaaS companies to go with more product alliances. SaaS vendors will dedicate more resources to integration partnerships with other SaaS vendors. Right now, they talk about it but they don’t do it well.

 

Seventh, video trumps text. SaaS products will begin to use more and more video for training, support, documentation and other functions. It’s cheap and easy and more interesting to look at. Text based tools are being replaced by A/V.

 

Next, SaaS for SaaS: SaaS companies are going to start outsourcing more and more parts of their own operations.

 

The SaaS companies also should remember that theirs is the grid computing muddle: Utility computing remains an open question and will be driven by the cost to provide the service. SaaS vendors should build applications that are “cloud compatible” so that they can take advantage of grid computing when it makes good risk/reward sense.

 

Finally, tech takes a back seat: There are fewer and fewer technical hurdles to get a SaaS application to market than when we started this in 1999. Now the emphasis is shifting more to marketing strategy; the technology, while obviously essential, is taking more of a back seat.