Can Tigers Change Their Stripes? The SaaS Memo Most ERP Vendors Missed

ERP vendors and pure-play SaaS vendors are genetically and fundamentally different. While the former like to tell us they’re now a SaaS business, most aren’t. Just as tigers can’t change their stripes, old-line ERP vendors don’t become real SaaS firms just because they say they are.

Editor’s Note: All individuals and organizations in the eDiscovery ecosystem involved in pricing or purchasing on-premise or off-premise software and services may benefit from this detailed overview of old-school delivery models and customer-centric needs as shared through the lens of the business practices of ERP vendors and pure-play SaaS firms.  

Extract from an article by Brian Sommer

ERP vendors and pure-play SaaS vendors are genetically and fundamentally different. While the former like to tell us they’re now a SaaS business, most aren’t. Just as tigers can’t change their stripes, old-line ERP vendors don’t become real SaaS firms just because they say they are.

Ironically, some SaaS vendors aren’t great role models for the SaaS world either, as they choose to behave the way old ERP vendors do. It’s as if some SaaS vendors have both feet firmly stuck in the business practices, sales methods, adversarial customer behaviors, etc. of their old-school ERP predecessors.

In today’s market we have three kinds of firms:

  • Old school ERP firms that haven’t made much progress towards a true SaaS existence
  • SaaS firms that adopted too many bad business practices from old-school ERP vendors
  • Good SaaS companies, the smallest group of all

SaaS companies often adopt a slew of new business practices when they launch their businesses. The best of these SaaS firms recognize that an app that customers subscribe to (not license) requires a different mindset re: customer satisfaction and other focus areas.

The best SaaS firms are empathetic – they know that customers don’t want to pay for SaaS software until it is fully in production. They know that customers want low-friction contracts. They know customers want reasonable renewal terms. They know customers expect the kinds of continuous price reductions that Amazon brings through its scale. While many vendors of all kinds ‘know’ these things, few actually organize their SaaS offerings to deliver these outcomes. Actually, they often deliver the opposite result.

Additional Reading

Source: ComplexDiscovery