The SaaSification of the software industry has evolved in a series of stages. It began with the success of Salesforce.coms Customer Relationship Management (CRM) and Salesforce Automation (SFA) solutions in the front office, displacing traditional on-premise software from companies like Siebel.
Google Apps then emerged as a popular SaaS alternative to Microsoft Office among business end-users seeking more flexible collaboration tools. Organizations are also beginning to adopt SaaS-based alternatives to back office financial management and enterprise resource planning (ERP) systems from companies like NetSuite, Intacct, Plex Systems and others.
Additionally, IT departments are taking advantage of SaaS alternatives to handle their desktop, network, security, storage and other IT management needs.
During the dot.com era, various start-ups and established players launched business-to-business (B2B) trading networks in hopes of transforming the way enterprises interacted with one another. When the dot.com bubble burst, many of the early extranets disappeared as well.
Now, the same fundamental drivers which have fueled the growth of the overall SaaS movement are powering a new generation of more successful business solutions targeting e-procurement, supply-chain and other inter-enterprise processes.
The three primary drivers are:
Technological Advancements starting with more pervasive broadband networks and stronger security capabilities which make better inter-enterprise communications possible.
Changing Customer Attitudes corporate executives no longer want to build their own proprietary systems to satisfy their day-to-day business needs and would prefer to leverage proven third-party solutions.
Maturing Business Models SaaS vendors have figured out how to develop, deliver, package, price and properly promote their solutions to appeal to corporate decision-makers.
Having watched their predecessors successfully capitalize on these three drivers in the front and back office environments, a new wave of SaaS vendors are now targeting the inter-enterprise business world.
The pioneers in this segment of the market include Aravo, Coupa, CVM Solutions and Kinaxis. Their success has inspired a number of established players, such as Ariba and JDA Software, to retool their software to become SaaS providers as well.
The value proposition of migrating to a SaaS-based e-procurement and supply-chain solution goes beyond cost-savings, risk mitigation and a quicker time-to-value. In addition, users of these SaaS alternatives can also take advantage of a broader community of companies leveraging these services, and capitalize on powerful benchmark statistics to optimize their performance.
These SaaS solutions also redefine the nature of the software vendor. Rather than simply provide a packaged application which the corporate customer must convert into a useful tool, todays SaaS vendors are becoming business service providers, supporting essential operational processes and offering valuable information to enable organizations to achieve their corporate objectives.
Kaplan is the Managing Director of THINKstrategies (www.thinkstrategies.com) and Founder of the Managed Services (www.msp-showplace.com) and SaaS Showplace (www.saas-showplace.com). He can be reached at firstname.lastname@example.org.