Wednesday, June 30, 2010

SaaS and SME Customers

The new job at Innowave Technology is pretty cool so far: good people, great projects, very challenging work. It's pretty neat to be in the only company with 3 Oracle ACE Directors. It's also pretty neat to have the opportunity to see many different situations with customers in the SME space and the ways in which they use Oracle products.

One trend I'm noticing already: there are not many of these customers taking a bite out of the SaaS apple. I'm surprised by that. Think about it for a minute…does it really make sense for companies with under $100 million in revenue to be taking on the infrastructure required for the E-Business Suite or PeopleSoft? I'm thinking that doing so consumes a hefty chunk of their margins.

Now here is the really interesting part. I've been asking those companies if they've considered OnDemand or another SaaS partner. Most were either unaware of the SaaS option or did not have a good understanding of post-implementation maintenance costs for the apps they're implementing.

My conclusion: we're not doing a very good job of getting the SaaS message across to the SME customers. Which is surprising to me, considering they're the customers that have the most to gain from that message.

I'd be interested in hearing your observations. Are you seeing the same lack of traction for SaaS with SME customers I'm seeing? Find the comments.


ImpelCRM said...

The level of acceptance and adoptions of SaaS solutions is acceleartinga cross teh SMb segment.

SMB is a major segment seeing a constant growth and SaaS solutions are custom made solutions for the SMB segments to leverage the enterprise class functionality at a much lower Total Cost of Ownership.

We at Impel have seen continuous adoptions of our on-demand flagship product Impel CRM majorly by the SMB segment.

jpiwowar said...

I can offer some perspective/musing as an Apps DBA from the SME space. Please don't misconstrue this as the formal (or even informal) opinion of my former employer, however; I'm just riffing here. Also, I'm aware (and now so are you) that I may be over-generalizing from a painfully small number of data points. :-)

Your observation about not having a "good understanding of post-implementation maintenance costs for the apps" is spot on. 'Nuff said.

I can confirm your conclusion about getting the message across. There's work to be done in terms of communicating the availability of SaaS for Oracle Applications. Common reaction when the topic came up with us was "Well, there's OnDemand, and...(end of list)." I know this is changing, but SaaS/"the cloud" seems to still be pretty young, and SME's might not be the primary consumers of that marketing material with respect to Oracle Applications, or not yet know the right places to look.

Other things that could be hindering SaaS adoption:

The price tag of implementations themselves might make SME's balk at the additional service fees involved with SaaS, and tempt organizations to try to "make it work with the people and infrastructure we have."

There may be some hesitation/concern about adding another layer of communication to change management.

Not confined to Oracle Applications, of course, but there are always the "you want me to store all of my sensitive corporate information *where*???" and "how will we get our work done if our external network link drops?" questions to be addressed.

Those last two points are particularly likely if the organization is growing rapidly, which I presume is often the case if they're involved in an Apps implementation at the SME level. If there's a cultural bias to being nimble from an IT perspective, there may be a sense that, rather than offloading a support burden, adding SaaS to the mix reduces problem-solving agility.

I'm sure that this isn't revelatory stuff, but it reflects, or is extrapolated from, some of my experience.


John P.

Your OCP Advisor said...

A lot of SaaS uptake depends on the IT maturity level of the company and the willingness of the CIO to take the 'risk' of limited in-house IT staff, data privacy and security considerations, downtime and SLA etc with this model. In my present organization which had a $1B+ turnover applications such as Siebel CRM, several HR application including payroll, performance management and recruitment as well as asset tracking were migrated/deployed over last 1 year to a SaaS model.
I think Innowave can play a dual role as a trusted adviser to the CIO both on SaaS as well as leading edge technology like Oracle Fusion.