Enterprise SaaS Buyers Want More Than Uptime

SAN JOSE, CALIF. — Although the current economic malaise may spell opportunity for Software as a Service (SaaS) vendors, they will have to work hard for it, providing service above and beyond traditional availability agreements.

“People expect the system to be up and running 24×7, 365, but even if we do that, it’s possible for a customer not to be happy because they may have an expectation beyond pure quantitative metrics,” Trisha Gross, CEO of SaaS integration solutions vendor Hubspan, said during a panel discussion here at SIIA On Demand, the Software Information Industry Association’s conference on SaaS.

“Customers want to know if the solution solves the problem they have, and that’s the qualitative aspect,” Gross said. “It’s even more important than the quantitative aspect because, in SaaS, we’re there for the long haul and the customer must be happy with what we offer.”

Other panelists agreed, including Frank Bruno of data protection and recovery vendor Iron Mountain.

“I buy SLAs [service-level agreements], and I expect the seller to dazzle me,” said Bruno, director and senior business strategist for intellectual property management at Iron Mountain (NYSE: IRM). “It’s important that companies try and exceed expectations and go the extra mile.”

The assertion comes as SaaS vendors are finding themselves in the limelight as enterprises seek to offload costs associated with maintaining their own software or storage infrastructures. At the same time, that heightened attention also highlights players’ glitches or failures.

Amazon.com found that out following outages at its hosted storage service, S3. Its lack of SLAs and dedicated user support beyond online forums exacerbated the problems customers faced when they could not access their data for hours. Amazon has since introduced SLAs and e-mail support.

Some industry insiders have said that SaaS companies should focus on service and less on talking up their technology, a view supported by panelist Bill Hicks, CIO and senior vice president of SaaS at payroll services provider Ultimate Software.

The most important thing for customers is trust, he said.

“If you say you’re going to do something you need to make it happen, and that involves trust and integrity,” Hicks said.

Panelist Philippe Courtot, chairman and CEO of on-demand vulnerability management and policy compliance solutions vendor Qualys, said it is critical for SaaS players to exceed SLAs because there are few obstacles to a customer abandoning one supplier in favor of another.

“It’s much easier to switch from a SaaS application than a normal application because you don’t have to pull out the application and replace it and test it and secure it,” he said.

In future, customers will demand more from SaaS vendors, Courtot warned.

“I can see that, in the near future, they would want guarantees of quality of service, guarantees of security of data, guarantees of data privacy,” he said.

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