Remember when the term "web-based application" was a key differentiator? What about application service providers? Remember those? Now days we talk about Software-as-a-Service (SaaS) and On Demand, and oftentimes when people think of these things, we still imagine the first wave of these products - "web-based apps". It seems every few years we coin a new term to keep things fresh on the Hype Cycle, and it's easy to forget the change and innovation that is happening around these terms.
The shift that has been occurring however, is not as subtle as the naming implies. These days, successful vendors in this space are focusing not only on applications, but instead are more organized around services and actively working as a partner to the customer. In fact, OnDemand vendors focus their service in a number of ways that provide new benefits to customers in ways that the older desktop installed products never could. I see this benefit in three areas:
Winning the Business
First, OnDemand providers win their customer's business every month. Compared to our tried and true desktop ancestors which were built as a business to develop software for 18 - 36 month cycles, OnDemand vendors run differently. We must provide continued value over the entire course of the customer's relationship, constantly improving and updating our products and services in order to win the same customers that we had last month. Just like any service, we monitor customer attrition - that is, did we lose a customer who had been using our service for any reason? This service-based attitude puts us in the mindset that the customer is the most important part of our business and makes us work to retain and grow that customer.
It's a completely different world for the customer. In one model, you pay up front for seats you're not 100% sure will ever get used and won't see product improvements until the next major release (which may be some time off). In the OnDemand world, feature improvements are incremental and often, and you "pay as you go". Want more seats? Simply add more licenses - need less, cut it down. The focus on the customer and vendor becoming partners is a win from the older model that really only benefits the largest vendors and the largest customers in the space.
Driving the Relationship
Second, Software-as-a-Service provides more than just the software. While a large part of the eProject business is built around developing our software products, we also invest heavily into providing infrastructure, training, services, community, and methodology around what our customers are doing. Companies that have built their business around this model, like eProject, provide a best of class OnDemand infrastructure to support a 24x7 worldwide business. Our teams are there to support the smooth running of those services around the clock, all the way from network administrators to the developers who wrote the products. No internal IT team can provide this level of service, and the cost savings can add up.
Outside of infrastructure and IT comes the solutions focus. In the world of business software, providing a blank slate for you to start using your latest ERP application is becoming more the exception than the norm. Customers are looking for solutions to get them running and want a vendor who can help provide real world answers to their problems. We're seeing more and more sophistication in customers looking at PPM software. Less and less are customers just focusing on a "checklist" of features and are looking for ways the vendor can help them solve a critical business pain they are facing. eProject provides features to let customers easily customize the Enterprise software to the customer's business without involving IT. On top of that, we are constantly working with customers to introduce and provide new "In the Box" solution sets to address different needs with packages such as Six Sigma, Sarbanes Oxley, and IT Governance.
Integrating the Customer
Finally, Software-as-a-Service emphasizes "configuration over customization". I often joke about the products of the past with large Professional Service teams showing up to customize software to a customer's needs. You can almost picture the consultants showing up in front of the customer's offices, trying to do business requirements analysis to understand their needs, building out specific "enhancements", and then driving away leaving the customer to go ahead with their deployment. I don't find that too appealing and it puts the burden of the hardest part of software deployment on the customer's shoulders. eProject offers a feature called dynamic applications for example, which can be configured to build out specific customer needs without writing a single line of code. The truth is that SaaS is built from the ground up with the idea that a product should be able to be configured to a customer's methodology or processes without having to actually change the software to meet that need. On top of that, leading SaaS vendors such as eProject have provided a platform to continue to grow and expand the applications and services that customers can use. This approach allows your platforms and products to mature along with your business needs.
Now, I'm not unrealistic and I understand that in some cases you will need some custom development, but SaaS vendors like eProject provide a robust services layer to do standards based integration via web services. In fact, you can synchronize your LDAP server to eProject just as securely as it would be installed within your own business datacenter. Advances in technology have allowed OnDemand providers able to offer the same integration capabilities as their desktop counterparts, while still providing a hosted OnDemand infrastructure, configuration over customization, and future expansion capabilities to boot.
I anticipate that over the next few years you will see far fewer businesses investing in products that don't provide these benefits. It's no surprise that many analysts see mid-market companies and divisions receiving some of the greatest gains by the SaaS model, being built for that type of business. In summary - the changes we're seeing are certainly more than just hype, and the benefits can be quite substantial for the customer.
Terminology and hype put aside - OnDemand provides real advantages to your business today.