Anyone reading anything about SaaS has certainly been exposed to the numerous benefits an organization can reap by using a SaaS solution. Usually, the focus of those benefits is around costs, deployment, mobility, and services. I want to address another benefit that’s usually not as well advertised – leveraging the connectivity ecosystem of a SaaS vendor. I’d call this part of the “power of one”. It’s about leveraging the SaaS vendor’s existing connections and interactions to others.
In my first post I offered a simple definition for a cloud vendor: a software provider that enables their customers to access computing resources (hardware/software) that are not physically on your premise, but are delivered through a browser (“in the cloud”). A SaaS provider would deliver its software using hardware not on your premises, and include other services typically performed by your internal IT organization. There are a lot of other things outside of your physical location that you rely on to perform your job – it is your ecosystem – a system of interconnecting and interacting parts.
This ecosystem contains the organizations and information you need to perform your role. Some examples include banks, other SaaS vendors, and market data providers. From a software perspective, the act of connecting and interacting relies on the software capabilities but also on someone, to develop some software and to provide ongoing support. Organizations using on-premise software products can face a few technical challenges connecting to your ecosystem otherwise not faced by SaaS vendors. In many situations on-premise products require the customer’s organization to support those interconnections and interactions. Here is an easy scenario as a way to demonstrate the differences and the business value:
You conduct business (connect) with 25 banks. You send and receive (interact) statements and payments to these banks on a daily and frequent basis. These banks are both domestic and global, and your banks support different transaction formats.
Connecting to the banks would typically be the responsibility of the customer – the IT department gets involved.
Connecting to the banks would typically be the responsibility of the vendor.
Implementation time higher due to the fact that these connections are now between the customer and each bank and possible time zone differences.
Implementation time lower in that these connections are now between the vendor and each bank, and the vendor has probably connected to the banks already for another customer.
Supporting multiple transaction formats is more complex. The vendor may support these formats and if not, someone would have some development to perform.
Supporting multiple transaction formats is less complex. The vendor may support these formats if they are already connecting and interacting with these banks.
Testing of the connection and transactions typically falls on the customer. Testing time is high. The IT department gets involved.
Testing of the connection and transactions would typically be the responsibility of the vendor. Testing time is lower as the vendor may have connected to the banks and supports their transaction formats.
Trouble shooting – call the internal help desk as well as the vendor.
Troubleshooting – call the vendor.
Therefore, the business value of leveraging the SaaS vendors to connect and interact with your ecosystem is typically a shorter amount of time to implement with lower implementation costs, and less customer support complexity.
An ecosystem (connectivity and interaction) isn’t a stand-alone concept it is an integral part of SaaS. It should be part of your evaluation of a software vendor and shouldn’t be a separate concept as some vendors are trying to push.