I came across a rather interesting and different way of describing what is perhaps the key reason why “pure-play” SaaS vendors are disrupting and will continue to disrupt the enterprise software market. It was written by renowned blogger Dan Callahan. Dan digs into the history books to find his very apt comparison — the strategy of the 1519 conqueror of Mexico, Hernando Cortez. Here is what Dan said in his blog post:
Go Big or Go Home
Yes, the phrase is a little dated (sorry, JMac). But if you’re delivering your service using a cloud-based model, you’re fully committed. You either make it work or you go out of business. When Hernando Cortez landed in Mexico with his expeditionary party, he had his ships burned. The message to his troops was clear: we either succeed in our conquest or die trying. Retreat is not an option. Companies like Salesforce.com and NetSuite have to succeed at the cloud-based delivery model; they have no other choice. Companies like Oracle, Siebel or Adobe don’t have to make the same all-or-nothing commitment (which, some argue, means they’ll never succeed with cloud-based services.)
Dan goes on to explain the inherent motivation that SaaS vendors have to continuously deliver value:
It’s Not Valuable Until It’s Used
The value question for enterprise-delivered software—is this valuable enough to pay for—gets asked maybe once a year. For cloud-delivered software, the question gets asked every month. For the customer, the experience with the value delivered by the software is much fresher in the cloud-based model. This puts emphasis on continuously delivering value.
There are plenty of other selling points for cloud-based services that I won’t review here… scalability, availability and so on. What’s most important is that cloud-based service providers know that they have to build and sustain an emotional connection with their users if these providers want to succeed. And isn’t that the strongest argument for partnering with one of these companies to run your business?
Simple, but powerful analysis and messaging. Surely food for thought for any CIO or IT manager contemplating how to drive continuous improvement when faced with a shrinking budget?