Most of the time, when we think of Software as a Service (SaaS), we focus on the first “S”, or the one that addresses the Software side of things. But I think that the second “S” or the one that is about Service is the one that needs to be thought of a little more, as I believe it differentiates a SaaS provider and clearly is what customers will value the most.
Now, I know that it is important to have the business functionality of the application, otherwise you will not be able to attract customers, but it is definitely the service they receive that makes them not want to look elsewhere and stay on as a customer. So in SaaS, it is the service that addresses customer retention, or more appropriately customer satisfaction. Most traditional on-premise software vendors have been doing technical/phone support for their entire existence, so when I mention the word “service”, they always nod their heads and say – “Yes, we know we have been doing service for years now”. But that is when I get concerned, because service in a SaaS world is more extensive, than in a traditional on-premise world. Service in the traditional software world was about implementation/installation services and then phone support, as part of an escalation procedure, once all internal resources had exhausted their best efforts at fixing a problem.
In a SaaS model, the service provider takes on a new role, and that is one of full application management and support. What I mean by that is they are no longer just about escalation, the SaaS provider is the only level of support in most cases, and the types of support issues are going to most likely be much more unique to a customer’s business process, and less about a technical glitch in the software. Application support will now includes things such as password support, application accessibility, business process questions, and potentially even other user process inquiries. The role of technical support increases to include upgrades, patches/fixes, and overall scheduled system maintenance, many of which most traditional software providers, have always relied on the internal IT organization to handle. The other big change may come in the area of 24 x 7support - of course this may depend on the type of business application and customer - but it is still something that everyone needs to think about as part of their total service offering. The other area that should be discussed is backup & recovery services – as the SaaS provider is now responsible if anything should happen to the data of their customer, as well as of their own systems and data.
Progress has offerings that can help SaaS providers in both of these areas. Some SaaS providers are now looking at offering 24 x 7support not only from their application standpoint, but also from a Progress perspective, which we offer as part of our extended support option. Many SaaS providers use OpenEdge Management to monitor and manage the Progress environment, and even potentially offer this as a monitoring service to their customers. The other area that I find SaaS providers looking at is using OpenEdge Replication for backup & recovery of data, as well as data protection.
Of course keep in mind that these service offerings are above and beyond “basic” support, so the customer should understand the value of these services and should be willing to pay for them. One of the biggest mistakes made by early SaaS providers is to create one price for their offering, thus making it very difficult to add other service offerings and with that – up the price. SaaS providers need to take a lesson from the hosting providers and potentially offer an “a la carte” pricing menu and along with that, make sure that they can position the value associated with each of the service deliverables.
Look for more information in the next coming months about the SaaS journey, as we see it happening. As always, any comments or questions just let me know at cosmith@progress.com.
Colleen Smith
Colleen Smith is Vice President, Customer Advocacy at Progress. In this role, she is responsible for ensuring customer focus and accountability for improving the company’s relationship with its customers and partners, as it relates to the use of Progress core products. Smith joined the company in 2005 with 20 years of enterprise software marketing, sales and product strategy experience, and has helped transform software companies into industry leaders, built strategic partnerships, designed acquisition strategies and moved companies through aggressive growth stages.