SaaS: More Fundamental Change Than We Realized?

[More in a series of posts inspired by the "PM in an on-demand world" research that I've been doing. Here's the link to yesterday's thought du jour.]

During the research interviews about PM and SaaS, I was struck by how philosophical the conversations got. To the interviewees, SaaS was not merely a delivery vehicle, but a fundamental decision about their business. Bringing technology producers and consumers closer together forced many vendors to admit that they had a vague, incomplete idea of who adopts their products and services, why they do it, and how they do it. The subscription model led to many hard questions about how the company makes money. Marketers had to deal with a significantly modified value proposition, while simultaneously knocking down some new potential objections (most notably, security). 

But those are just the most obvious consequences. The deeper we got into the research, the more I felt that we were talking about other ripple effects of SaaS, PaaS, and the other aaSes. At least a couple of Big Industry Trends – the kind that Very Serious People spend a great deal of time talking about – owe a great deal to SaaS. Without the success of SaaS, many organizations would not have been as open to embracing other changes. I'll mention just two of them, Agile and social media, among several that we'll discuss in the final report.

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On Demand: It's A Business Model, Not Just A Delivery Mechanism

As promised, still more SaaS! Following an excellent day of discussion about PM in an on-demand world, I started over here at the fresh-out-of-the-shrinkwrap Forrester community site. Topic: On demand is a business model choice, not just a delivery mechanism. Discuss.

SaaS Brings Technology Producers And Consumers Into Sync

I'm working on a report about the role of PM in an on demand setting (SaaS, PaaS, and all the other aaSes). As often happens in discussions about PM, the role is a window into many bigger issues. Since their responsibilities span both business and technology, product managers and product marketers find themselves in the middle of many fundamental questions for technology vendors, such as, How often should we deliver something new to our customers?

That question has two sides: (1) how often do customers want to receive something new, and (2) how often can the vendor deliver it. Both questions can be difficult to answer. Customers often want tech vendors to deliver value faster, but they also complain if the changes happen too fast. Vendors know that they could deliver new technology every time they do a build, but they also know that the entire company (sales, marketing, support, etc.) won't be able to keep up at that pace. There must be some golden mean between the pace of technology production and consumption, but what is it?

By shortening the distance between producers and consumers, on demand, and SaaS in particular, has made it easier to reach a meaningful answer. The on-premise model creates a very long value stream between the development team at the beginning of the technology adoption process, and the users at the very end. In fact, adoption is, at best, a blurry image on the distant horizon of the development team's field of vision. Since the success of a development team's work products depend on its adoption, lack of information about adoption is not an information gap, but a yawning chasm.

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Accenture Sets Up Software Division

Yesterday at its annual analyst meeting, Accenture unveiled its new software group.  Yes, the company has formally set up a software organization to sell packages and SaaS offerings. The group was internally established back in September 2009, but publically launched this week.  The group has 48 products, 36 of which are vertical packages that Accenture has done on its own; the remainder are enhancements to existing packages from vendors like Oracle and SAP. The vertical packages include freight and logistics, hotel property management, and a claims components solution. Sample “enhancements” cover P&C billing with SAP, banking with both SAP and Oracle, and a human capital management offering with SAP. The numbers on the group: the offerings cover 8 industry segments and it has 2,000 people and claims that it has signed 600 deals where there is an explicit software license. There are 12-15 software factories in support of 48 products. This is an extreme example of the standardized offerings that services vendors will bring out as the market evolves.