Published on 29 December 2011
The explosion of online business software, Software as a Service , is mind blowing.
Offerings can range from email management, CRM to ERP and business process workflows. There are thousands of solutions available.
At VM-Associates, our cloud consultants demo online software every single day and are well positioned to know how much of this stuff is out there.
But what is the defining factor for the next generation of business software?
What is clearly setting apart this new breed of products from "traditional" on-premises software?
What to look for in online software
Of course, just like for everything, most of the solutions are derivative schlock - a copy of a copy of innovative software created nearly a decade ago. An example is online project management software. After 37signals hit a grand slam with Basecamp dozens of imitations came out , with new ones coming out still. Some of it is as good, or has its own innovation to serve niches, but some of it isn't that great.
How to find the one that has genuine quality and serious competitive advantages offered?
Where does that leave you and me, the small business owners looking to navigate these myriad choices?
Service is the defining factor for the next software generation
This question reminds me of when I used to live in Manhattan. There were two competing Indian restaurants in the East Village, one on the ground floor and one on the basement level of the same building. I began asking customers exiting from both places what they thought of the food. The responses were to be expected - pretty standard, neither terrible nor amazing. The two rival hosts caught wind of my interviews and began bartering for my patronage. "Free wine with the meal" said the man downstairs. The man upstairs countered with "free wine and dessert!". They both ended up with standing offers for free wine, dessert and naan. Ultimately, I chose upstairs because I got word from a disgruntled couple that the downstairs man had offered those free items and yet they never received them, while the family leaving from upstairs was pleased with their service and rice pudding.
Service is the defining factor for the next generation of software providers. Some of them get that, some don't. Customer service isn't just shiny websites and smiles. It's keeping promises and honoring the service agreement.
Simply put, the traditional product model doesn't exist anymore. Online software vendors depend on the service model just like a restaurant. The product is the software, but what is being sold is the delivery method and service.
Some vendors don't get the "service" part of Software as a Service
We are beginning to see a division of Software as a Service providers who get the "service" part and are separating themselves from the pack.
Today, there are talented developers in spades, every software shop has a few but there just aren't that many well equipped customer service representatives out there. Some companies are making a lot of fanfare and winning customers with flashy lights and optimistic promises. It remains to be seen not only if they can back up their claims, but if they can remain transparent enough to engage their customers effectively.
No Software as a Service offering is fully developed. The whole point is that the system will always continue to evolve and get better. Currently there just isn't an application out there that stands absolutely above the rest but they're all trying hard to get there. Customers understand this - they get the whole idea of updates and growing.
Understand the service you get
The whole point of online software is that customers agree to enter into a partnership. That's a mutual agreement which takes trust and understanding. When vendors fail to understand this relationship, customers see immediate red flags. Nothing kills a Software as a Service provider quicker than an unresolved security or data corruption issue. A dying community is bad for cash flow, but even worse, for consumer confidence. The deal breaker comes at the end of any problem when you start to hear "why do I trust my business data with these people?". Trust is hard to regain.
And it's not just damage control where vendors need to establish good communication, its growth as well. Updating and how updates are disseminated to the user base are critical to keeping momentum. Whether it's updated weekly, monthly or quarterly, customers should understand that this is a journey to make together with their feedback included.
Business is about people on both sides of the deal. Service models only heighten that importance. Talented developers are finding that it's not just the product that is crucial, but team and community building.
When choosing your online service provider, browse their forums, send them direct emails. Find out who's on the other side and what level of service they truly offer.
Contact us if you need advice on migrating processes and software to the cloud
This post has been written in collaboration with VM-Associates.