Most organizations today view the move to SaaS as a cost cutting measure. While this is clearly a major benefit, it is small when compared to the advantages of continuous improvements in functionality. In a recent blog article, The Next Wave of SaaS, Jim Frome of SPS Commerce talks about 3 waves of SaaS. In it he discusses that a major value of SaaS is the continuous feedback that SaaS vendors get from the usage of their software. This in turn enables the vendor to provide this information to its customers who can benefit from understanding their usage patterns. With on-premise systems, each customer works on an island and feedback is elusive; this is more so within a company. If you are a large enough customer, your requests may get into the next release. Between bug fixes, patches and upgrade cycles, your system may not give you the functionality you want in a timely manner. With SaaS, customer usage patterns are continuous and feedback mechanisms provide an easy way for vendors to provide continuous improvements. Providing that information to customers completes the feedback loop.
All this puts the customer in the driver’s seat. Since the SaaS vendor is providing a service, it needs to serve the customer. If you don’t like your phone service, you switch. If you feel that your phone company listens to you and provides continuous improvement, you keep on using them and might even sing their praises. SaaS does save you money, but that’s only the first part. Getting better business value and a better product along the way is even better.