Software as a service (SaaS), also known as the on-demand model, is changing the way businesses of all sizes and in all industries use software. Based on Web services technologies, these changes are so significant they have been dubbed a “disruptive technology.” As the technologies associated with Web services, Web 2.0, and Office 2.0 mature, they make possible a new business model that requires not just new technologies, but a new approach to business altogether.
The SaaS business model means the end of business as usual in the software world. For customers, the benefits are obvious and compelling: They get sophisticated functionality without up-front expenses or the hassles associated with the installation and maintenance of traditional software. For vendors of such services, the model provides low barriers to entry and unprecedented opportunities, as well as new risks and challenges. Creating and managing a SaaS business demands a new way of running a business—one that extends to all business areas that make up an organization.
Apttus’ applications provide complete visibility into and control over the contract and proposal process. The company was started by a group of seasoned executives of private and public companies over a bottle of wine at a barbeque at Lake Tahoe. As they discussed how existing applications often failed in deployments and received horrible customer reviews, they decided there had to be a better way. Then they proceeded to build it.
BigMachines helps customers automate pricing and discounting, generate quotes and proposals, and manage workflow routing and approvals. Founded in 1999, BigMachines has been built from the ground up as a SaaS business, Web-based company.
Centive was founded in 1997 by a sales compensation expert who had a compelling vision to serve the untapped niche market of performance-based pay systems. For more than a decade, Centive has helped businesses automate sales compensation and elevate this function to a strategic level that drives peak sales performance.
CRMfusion will achieve revenues of more than $2 million in 2007 with only 6 employees. How did they do it? With data manipulation tools that are used by more than 1,000 administrators in 15 countries, CRMfusion ensures clean data by performing de-duplication so customers can import lists or tradeshow data—such as leads, accounts, and contacts—perfectly the first time. :: EchoSign was born out of a need to improve the traditionally manual and arduous process of signing contracts. Jason Lemkin was convinced that an easy-to-use e-signature application was the perfect solution to address the problem. He founded EchoSign in 2005, and the rest, as they say, is history.
ExactTarget makes marketing automation and email applications that specialize in creating, sending, and delivering business-critical email communications. ExactTarget was the “Best in Show” award winner at Dreamforce ’06.
Given the advantages of the SaaS business model, supporting the vision of a SaaS business initiative is easy. What’s harder is defining the particular characteristics such an initiative needs to be successful and selecting those metrics that can track success. Although many executives gravitate toward easy, logical metrics such as revenue and profit and loss, the most important underlying day-today metrics of an SaaS business—such as adoption rates, system utilization, and attrition—may be unfamiliar or, worse yet, unavailable