Anyone who has been in the Software-as-a-Service (SaaS) business for a while is well-aware that this model has a fundamental impact on every aspect of the software business. However, a growing number of established independent software vendors (ISVs) are just beginning to venture down this path and are confronting these painful realities for the first time.

Most ISVs are fixated on how SaaS changes the architecture of their applications and impacts their revenue streams. These are big issues, but SaaS disrupts traditional sales and support models as well. I had an opportunity to attend two events in the Boston area last week that addressed these two issues.

The first was a roundtable session hosted by The First Wednesday Group, an organization focused on software support issues, which examined the unique support challenges of SaaS. The session was led by Renee Bochman, Vice President of Support Services at Axeda, a provider of  a cloud platform and applications which enable companies to connect their products remotely. 

Renee provided candid insights about the support challenges created by SaaS, starting with the changing nature of the end-user and the kind of support questions which they pose. While she admitted that the company is still learning how to respond to these challenges, she was also convinced that moving to SaaS has dramatically improved Axeda’s understanding of its customers and strengthened its customer satisfaction, resulting in greater profitability and giving the company a stronger competitive advantage.

I will be leading a workshop which will delve more deeply into SaaS support at the First Wednesday Group’s Voice of the Customer Conference on Wednesday, October 27 at 1:00-4:30pm ET. Click here to learn more and register for this workshop.

The second event was hosted by the Boston College Tech Counciland looked at the sales challenges associated with SaaS. Although David Skok of Matrix Partners gave a fascinating talk about the power of web-based, viral marketing, the most interesting revelations came from Greg Pesik, President/CEO of Passkey, a SaaS-based group reservation and optimization provider.

Unlike many SaaS companies which strive to encourage prospective end-user customers to try their solutions on a trial-basis via the web to acquire new customers quickly, Passkey uses traditional face-to-face sales techniques to convince CXOs that their solution can help them dramatically improve their business success. And, rather than charge a nominal fee, Passkey has won sales deals worth tens or even hundreds of thousands of dollars. But most interestingly, Passkey is able to convince its customers to pay upfront for 2-3 year agreements. That is because Passkey processes billions of dollars in room reservations on behalf of its customers at a time when the travel industry is facing unprecedented challenges. Because of these tangible business benefits, Passkey clearly demonstrates that there is more than one way to ‘skin a cat’when it comes to selling SaaS.

The same holds true when it comes to other aspects of succeeding in the SaaS. In the same way that the broader software industry is composed of various business models, the SaaS market is also evolving to encompass multiple paths to success.

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