Forum Posts

Robin Islam
Apr 07, 2022
In Wellness Forum
A few days ago, I chatted with a friend, from software to SaaS, and finally from SaaS back to software. This friend used to be a salesman in a software company, but I was fooled into doing SaaS sales. Finally, he told me that he wanted to return to his old business of software sales this year. The reason is very simple. He believes that SaaS sales are more difficult to do than software, and the income is also a lot less; the problem is that the company has not made any money, and the whole is lost. In fact, we talked about this topic last year: Is there a way out for making software in a SaaS company? My answer is: this is basically a dead end. The reason is also very simple. For example, UFIDA, Kingdee, etc. have been struggling for decades to achieve this level; a start-up SaaS company relies on software, so how can it catch up with them, just because it is SaaS? I'm afraid I don't even believe this reason. To this day, there are still many people who don't agree with the distinction between software and SaaS. Whether it is doing products, sales, services, or operations; doing it in a SaaS company or doing it in a software company, it seems to make no difference to individuals. If SaaS is put on the coat of toB again, there is really no difference between software and SaaS from the outside. Therefore, many SaaS companies have become software companies unknowingly, and of course, some have become software companies on their own initiative. In fact, two businesses that look similar on the outside are actually two completely different businesses; and the two businesses do not intersect. In the past, we thought SaaS would win because SaaS was cheaper to use than software; now, that conclusion doesn't hold up. Because, from the perspective of SaaS use by foreign companies, the total cost of SaaS subscription services covering Phone Number List the same business may be higher than that of software. In fact, if SaaS can eventually replace software, it is entirely because SaaS is more efficient than software. Going back to the underlying business logic to look at efficiency, the efficiency of SaaS is a combination of efficiency in two dimensions . One dimension is the efficiency represented by the subscription revenue model, that is, once a sale is made, there will be continuous revenue, which can be seen as the length of revenue. Another dimension is customer acquisition efficiency, that is, in the same period of time, the number of SaaS customers is more than the number of software contracts, which can be seen as the breadth of revenue. This is also easy to understand, because SaaS does not require the complicated sales process and implementation delivery process of traditional software, so it has the possibility to improve efficiency. In theory, SaaS, which has an advantage in both the length and breadth of revenue, is far superior to traditional software in terms of profit model. However, whether the efficiency advantage of SaaS can be translated into actual business results is conditional. At least SaaS must be done as SaaS, which is the most basic requirement of this business. What happens if SaaS is treated as software?
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Robin Islam

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