Resent customer case indicates mid market is adopting SaaS

A week ago, Danish news company Berlinske Tidende announced to reduce internal operation costs by adopting SaaS solutions for collaboration and document management. We are facing a great lack of evidence like this in the market; and finally there are defined stories of how great SaaS helps customers – not only in the small and home office space; but also in the mid- and enterprise level tiers. 2500 users will now consume a SaaS service instead of internal IT systems.

Although I love the news and headline in this story, my enthusiasm regarding this specific case stops here. SaaS is about understanding your business, and making a business decision of tactical and strategic value: what Berlinske forgot was to look and ASK at the customers (in this case the daily users).

So why did Berlinske choose SaaS?
The main objective was to safe cash. The selection of implementation was to use OpenOffice (freeware) together with Google Docs and Google Mail, to cut cost down and make sure investments was low. In doing so, I believe the most important part is to understand the value of WHAT and consume it into HOW; a return on investment (ROI) and total cost of ownership. What I am indicating is that although you may save money on the actual software consumption; Berlinske will lose equal value in organizational implementation and shift in customer behavior.

Where is the customer?
The customers within Berlinske are the users and people using internal systems. Just like SaaS vendors and ISVs you have to adopt new ways of business when doing SaaS. You cannot push a solution down the throats of the customers, at their expense. Not only will Berlinske have to change all procedures and workflow between internal IT (not to mention re-education and change of knowledge) and the rest of the organization, but as the press release announced, several people within the organization will still need to consume Microsoft Excel for data analysis. Looking from a TCO perspective; this will bear a cost of supporting two systems, two platforms and two knowledge bases. Where did you save money on that transaction?

People Deal with people
Last but not least, and organization is built by the skill and people you attract and hold. I feel where compelled to ask how Berlinske will achieve this, as many IT people are on a carrier-path and the people you attracted the last decade is people from another culture and background. But bear in mind that is also holds the key to some real significant cost saving; so as we do not know the true objective (not cost red.) of WHY Berlinske took the step towards freemium business IT; we know it is going to cost in lack of support, change of process and new culture.

I believe the step has been decided from a technical angle; not a business. But how knows – maybe Berlinske did make an internal users study that proves the business case and indicating that the majority of people are ready to change.

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