Comments on: SaaS Sales Wars: Consumerize IT or Retain the Status Quo? http://gigaom.com/2010/12/25/saas-sales-wars-consumerize-it-or-retain-the-status-quo/ Sun, 19 May 2013 18:48:35 +0000 hourly 1 http://wordpress.com/ By: Fred van den Bosch http://gigaom.com/2010/12/25/saas-sales-wars-consumerize-it-or-retain-the-status-quo/#comment-560709 Mon, 27 Dec 2010 04:59:09 +0000 http://gigaom.com/?p=279942#comment-560709 I agree with Lew’s observations: SaaS based solutions are inherently simpler to deploy than on-premises solutions, and in many case preclude the need for POC’s that require significant investment in time and effort from both the prospective customer and the provider. The “pay per use” and “pay as you go” model that is common to SaaS offerings further lowers the hurdle to adoption and allows for grass-roots adoption in the enterprise. Even though a direct sales approach may still be needed, these factors move the emphasis form field sales to inside sales and the support from on-premises to on-line. It also means increased importance for internet based “viral” marketing approaches.

At Librato, we offer a “private” version of our service for organizations that require solutions to be deployed inside their firewall. We charge a one-time fee to support the deployment and a choice between the same pay-per-use pricing as for the “public” service or a more conventional subscription model.

Overall, the cost of customer acquisition for SaaS solutions is quite significantly lower than for on-premise, and for self-service customers it is insignificant. This makes it possible to sell solutions to organizations of any size, which benefits SMB customers and increases the addressable market for the SaaS providers. Add to this the lower life-time cost for support (deploying and supporting versions and releases) and I’m convinced that SaaS is a fundamentally more efficient economic model than on-premise.

David Skok of Matrix Partners posted an excellent blog entry on the subject earlier this year (http://www.forentrepreneurs.com/startup-killer/)

Fred van den Bosch
CEO, Librato

]]> By: Justin Benson http://gigaom.com/2010/12/25/saas-sales-wars-consumerize-it-or-retain-the-status-quo/#comment-560524 Sun, 26 Dec 2010 20:23:43 +0000 http://gigaom.com/?p=279942#comment-560524 Nice article. Let me say this. Your sales strategy doesn’t care too much if your product is a SaaS product or OnPrem. This is the biggest error I constantly see. It matters, but maybe bullet point 5 or 6.

If your product is expensive and touches multiple divisions to be successful then you need a good sales team. If it’s relatively “cheap” and is a single division play then it’s small sales team and/or inside sales team. An OnPrem version that’s simple to deploy really should have no disadvantage to a SaaS model in this world – thus the reason it falls to 5th or 6th to me.

As I read your article I felt you were proving this point. It’s just that sales is not respected as a discipline like other things like Engineering, Finance or Product Management etc. If it was much of this “SaaS vs OnPrem” debate would be much more tightly defined and thus understood.

Good luck to you and continued success.

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