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SaaS Will Never Be the Same – Again

The first time I said SaaS would never be the same was referring to Freshbook’s launch of their benchmarking service:

It’s *the* hidden business model enabled by SaaS. An opportunity not talked about, but so obvious it has to be on the back of all SaaS CEO’s mind. Benchmarking is a huge business, practiced by research firms like Forrester, Hoovers, Dunn and Bradstreet, as well as by specialized shops like the Hackett group – none of which are affordable to small businesses. More importantly, all previous benchmarking efforts were hampered by the quality of source data, which, with systems behind firewalls was at least questionable. SaaS providers will have access to the most authentic data ever, aggregation if which leads to the most reliable industry metrics and benchmarking.

Hosting customer data offers a lot more opportunities, beyond benchmarking. Tomorrow CRM provider Salesforce.com will launch a new service called Salesforce to Salesforce (S2S) that facilitates the sharing of data between customers -reports TechCrunch. I believe, just like Freshbook’s move, the ramifications of this new Salesforce service will go way beyond the immediate opportunities it brings to customers ( not that those are negligible: see first reaction by Echosign CEO Jason Lemkin, another business innovator in my book.)

This is a first step in a paradigm-shift: while current concerns about SaaS mostly focus on the security, privacy, and consequently isolation of business data, eventually a culture of controlled sharing for business benefits will develop. Forget CRM; think of more complete business suites, like NetSuite, or when it really kicks in, SAP’s Business ByDesign, the most comprehensive SaaS business suite ever. Procurement, manufacturing, inventory, resources…etc data – can you envision the improvements in Supply Chain visibility? SaaS will never be the same – again.

Update (12/5): Larry Dignan at Between the Lines sees the same opportunity:

Today, the service is predictably focused on sharing sales lead and CRM-type information. But as Salesforce.com grabs more large customers its possible that the latest service could be used to exchange supply chain information and link other business processes.

Comments

  1. “Saas will never be the same again”. okay.. I don’t think so. s2s is quite interesting.. agree more security and privacy on data is needed.

    Sally
    http://modazzle.com/cms/modazzleLp2.html?channel=CM&camp=SalesForce

  2. Since s2s is built on the force.com platform, it automatically inherits the security and privacy technology we’ve built over the past 8yrs. Within s2s itself, since its an opt-in/opt-out model nothing is shared without explicit action. Finally, the solution has been built in such a way not to give any access to third-party’s to the shared data. We’ve built additional layers of security over and above what’s available with the force.com platform.

    I may be a bit biased as the product manager of the new s2s service but I really believe we’ve built a scalable, secure and flexible solution that will be extremely beneficial to our customers.

  3. Great article, Zoli. I expect to see a lot more of these network effects surrounding SaaS. More on my blog:

    http://smoothspan.wordpress.com/2007/12/05/saas-network-effects-start-charging-up/

    Best,

    BW

  4. This is very intruiging. I really like this idea:

    A paradigm-shift: while current concerns about SaaS mostly focus on the security, privacy, and consequently isolation of business data, eventually a culture of controlled sharing for business benefits will develop. Forget CRM; think of more complete business suites, like NetSuite, or when it really kicks in, SAP’s Business ByDesign, the most comprehensive SaaS business suite ever. Procurement, manufacturing, inventory, resources…etc data – can you envision the improvements in Supply Chain visibility? SaaS will never be the same – again.

    You should take a look at Microsoft’s Dynamics CRM. They are seeking CRM Early Adopters. Perhaps a chance to look at that system: http://www.123together.com/crm/Microsoft-CRM.xhtml.

    It looks like Dynamics is also moving in this direction.

  5. This is MUCH deeper than any of us knows. I may say more elsewhere on this one.

Trackbacks

  1. […] example of network effects for SaaS was mentioned by Zoli in his blog.  He was talking about the value of benchmarking information.  This is an area that is hugely […]

  2. […] to share and synchronize data, custom objects and processes. As some have said, this is a potentially game-changing new capability that taps into the unique nature of a truly multi-tenant hosted application […]

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