While SaaS vendors tout short-term sales, clients expect long-term benefits

In the recent study of SaaS XXV, HFS surveyed 1000+ enterprise decision-makers, services professionals, and software manufacturers to determine their points of view on how software-as-a-service (SaaS) creates business value.

The SaaS XXV looked at business value creation across the software and services ecosystem. We asked SaaS software vendors and end-users to identify the top 3 strengths of using SaaS solutions. The chart depicts the Rank 1 answers for each of the groups. Scalability and ease of deployment appeared in the top 3 for both of the respondent groups, but SaaS software vendors saw a few things differently:

• 21% of SaaS software vendors believe that the most important strength of SaaS is delivering value for money. Conversely, only 3% of enterprises agree with this. This highlights a stark difference in the definition of the value that SaaS delivers to customers. Cost has always been an important software selection criterion, but SaaS software vendors seem to be out of touch with the fact that end-user customers no longer prioritize cost as the main reason for SaaS investment.
• 34% of end-user enterprises cite scalability as the top strength of SaaS solutions. They want to maximize their investments in SaaS to ensure that they remain relevant in the long-term in dynamic business environments.
• 16% of end-user customers cited consumption-based costing as the second most important strength of SaaS software. Only 8% of SaaS software vendors agree with this. SaaS software vendors must understand that the value of SaaS is less about the initial cost and more about the flexibility of the engagement. Again, end-user customers are more focused on long-term scenarios, while SaaS software vendors seem to be more focused on short-term software sales.

The Bottom Line: SaaS software vendors must work more closely with their customers to understand the real value of their solutions. Instead of focusing on short-term sales gains, SaaS software vendors must position their offerings in the wider business context that supports long-term success for customers.

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