I am (not suprisingly) spending more time reviewing SaaS solutions out there to see how they work.
One thing I noticed is that I never bother to read the terms and conditions or privacy statements of these offerings.
Even when there is a big tick box, its tick it as fast as I can to get to the good stuff.
I wonder how many people bother to read them?
I wonder how many don’t carry on with the process after reading them?
Moving from working for a Enterprise Software vendor to working with Small Businesses using Open Source software then to a Software as a Service startup has been an interesting mindshift.
One thing I was interested in is the differences for a small business in using Open Source solutions compared to SaaS solutions.
In my experience one of the major reasons small businesses (as compared to IT practitioners) use Open Soucre is trhe perception that it is free (as compared to IT practitioners who use casue they can hack the code to do what they want).
However small businesses often hit the limit of their expertise in installing and using Open Source solutions fairly quickly and then have to invest in people like me to help them through.
In a post on Trumba about Five Benefits of Software as a Service they compare them from a cost point of view:
“Open Source - Potentially costly. In addition to any license fees you might have to pay, factor in the infrastructure costs of servers, security, and IT personnel.”
“SaaS - Comparably low. You pay a subscription fee but the vendor bears all the security and infrastructure costs, leaving your IT personnel free to focus on missioncritical tasks.”
They also list the five major benefits of SaaS as:
- Save money.
- Save time.
- Focus your technology budgets on competitive advantage rather than infrastructure.
- Gain immediate access to the latest innovations.
- Join a community of interest.
the key they say is:
“Regardless of what specific application you might be evaluating, you stand to benefit from SaaS in five major ways. When you subscribe to a software service instead of purchasing a software license.”
This is the same expectation small business get when using Open Source solutions. So if I compare Open Source vs SaaS on these:
Save Money
Open Source - You won’t spend money on license but you will probably spend money on services
SaaS - You may spend less money on subscription (than a perpetual license) but you will definitly spend less money on servcies.
Save Time
Open Source - You won’t spend time on building software but you will still spend time installing and maintaining it
SaaS - You won’t spend anytime installing and maintaining software
Focus on competitive advantage
Open Soucre - You can modify the software to your hearts desire so definitely get competitive advantage
Saas - It all proprietary code on a server so no competitive advantage (although Salesforce.com with its APEX framewqork is probably getting there)
Gain Immediate Access to Innovations
Open Source - You have access to Alpha and Beta versions if you want to take the risk but on average you are still waiting 6-12 mioths for major releases.
SaaS - Typically a new release is 2-4 weeks, which you get automatically next time you longin
So overall SaaS seems to have it on these points.
However if somebody came up with a true hybrid solution, i.e. SaaS but where you could modify it to get competitive advantage, then that would change thr rules.
SugarCRM seem to offer that, but under the covers it is just a way of piutting lipstick on SaaS.
There are all sorts of interesting start ups coming online all of a sudden, in restrospect a few years from now it will probably be coined dotcom 2.0.
One that caught my eye is Ponoko. An interesting model where you design something real and they will manufacture and sell it for you, sharing in the profits.
Kind of an extension to the CafePress idea for tea shirts.
To me there are three major types of dotcom 2.0 start ups around at the moment.
1) Capture the Eyeballs
Sites such as Youtube and Facebook, who are designed to capture eyeballs, operate at a loss and then when they are larger enough get sold to an advertsing centric company (such as google) who can convert the eyeballs into dollars.
2) Revolutionise current technology
Companies such as Salesforce.com , PlanHq and Xero who are changing software solutons from being expensive purchases you install on your PC/Server to being affordable subscriptions, with no maintennce efforts/nightmares.
3) Revoluionisecurrent business
Companies such as Ponoko who take a business process (for example, designing a products, getting short run manufacturing, creating a website and then selling your product) and automates the process using web based technology.
It will be interesting to see which model is still around 2 years from now.
After waxing lyrical about the different types of start ups in Ponoko - You think it they build it
I found ONLINE BUSINESS TOOLBOX: 230+ Tools for Running a Business Online on mashables which outlined (as the title suggests) 230 Software as a Service start ups.
