One need not be a math genius to figure out that some SaaS solutions, over time, might be more expensive than competitive "perpetually licensed" legacy software products. This can also be seen in a build vs. buy scenario where the decision is to roll their own solution, as the subscription-based, pay-every-month-in-perpetuity costs appear to be excessive over time. Its easy for potential clients to write off some SaaS solutions as too expensive long-term if the SaaS product is competing with legacy software or home-grown apps on their terms.
So how does the SaaS vendor turn the decision in their favor every time? Change the focus! The SaaS vendor must stop competing as a replacement for on-prem, legacy products or as a replacement for home-grown functionality. The SaaS Vendor must change the focus of the market by harnessing the power of the Network Effect and Ecosystem that makes SaaS unique to give clients something THEY WILL NEVER GET with those other options. Once that is done, the legacy vendors or the internal programmers of your target client have to come up with answers to "can your software do what that SaaS app can do?"
Take those "competing" options off the table by putting a value-prop out there that only a SaaS vendor with hundreds or thousands of users, transactions, etc. contributing to the Network Effect can offer them. The SaaS vendor should give clients, as well as their Ecosystem partners, something that over time will become even more valuable to all who leverage the system. This strategy is especially critical if your product could be considered a "feature."
Do you need help identifying ways to differentiate by leveraging the Network Effect and Ecosystem opportunities unique to the SaaS Business Architecture? If so, call us today at (972) 200-9317 or email us.
Author: Lincoln Murphy (you should follow me on Twitter)