SaaS Predictions for 2009: How to Market SaaS in the Current Economic Downturn
The SaaS story remains the same, but now the approach must shift. SaaS is cheaper to implement and the enterprise can avoid the upfront capital expenditures for hardware. Since it is a service, the pricing is based on per seat use and so there is no initial cash outlay for the software suite. You pay for what you use. In this current economic crisis enterprises are ripe for a way to lower costs and so the approach the SaaS vendor should take needs to adjust to the times and the SaaS vendor must highlight the advantages in their marketing approach. Demian Entrekin, founder and Chief Technology Officer of Innotas, has written an Op Ed piece for SandHill entitled 10 Predictions for Software as a Service. In it he cites a Gartner study that predicts the $6.4 billion in SaaS sales for 2008 will grow to over $14.8 billion by 2012. In his article Entrekin discusses the 10 key trends that the SaaS vendor should consider in order to expand their market share by encouraging acceptance of their application. I will provide a brief synopsis of these trends below, but I strongly suggest his article to my readers for the full story.
10 Key Trends to Growth and Acceptance:
1. Sell the product features: Abandon the traditional approach of selling the whole product and emphasis the individual product features that address the individual business processes desired.
2. The application is seamless: SaaS is not restricted to the enterprise and more directed toward user networks. This should lead to easier adoption.
3. Have an Elevator Speech: Just when marketing yourself for a job, one needs to be able to sell oneself in the first few moments of the interview, Entrekin suggests the SaaS Vendor be able to demonstrate added value in the first minutes of meeting the prospect.
4. A Deming Approach: W. Edwards Deming would emphasis “the ability to support a reliable, scale-able service at a low cost.”
5. Emphasis Tier 1 Support: Stress the capability of your Tier 1 Support and suggest the enterprise eschew the need for high priced consultants to answer what become high priced questions.
6. Product Alliances are key to growth: Make alliances with other SaaS vendors as a means to growing market share.
7. Video rules the day: Use video for training and support. It is cheaper and much more interesting than the traditional text tools.
8. Consider a full service Hosting Provider: This is the point of most interest to me. Entrekin points out that the SaaS Vendor obtains the same leverage from an outsourcer that they provide to their own customers. This has the added benefit of leading to aggregation of applications and partnerships.
9. Grid Computing: SaaS vendors should build their applications so they are “cloud compatible”. It remains to be seen if grid computing becomes cost efficient, but the SaaS vendor should be ready to take advantage if such is the case.
10. Your approach can shift from the technology hurdles to a marketing strategy: Entrekin believes the hurdles getting the application to market are slowly but surely being overcome and now is the time to shift to a viable marketing strategy.
