If you didn’t believe the analysts when they published reports on growth rates of software-as-a-service organizations exceeding growth rates of installed software, you may want to use the expectations of the marketplace as another factor.
When an organization is entertaining the purchase of a digital asset management system, they may include installed software and software-as-a-service as options. Since the SaaS organizations provide the implementation, data migration, software development, training, support, upgrades, maintenance, and infrastructure the installed software providers may feel like they are not bring much to the party, and the buyers recognize that. They recognize this because their expectations revolve around the software-as-a-service deliverable whereas installed software providers just don’t have the capability of providing the full breadth of services.
As an example, last year Widen was not awarded the business from an organization that entertained both Widen and an installed software player. The organization selected the installed software company, much to our surprise (when we are competing against installed software it seems like we always win but in some cases we don’t have a 100% close rate, like this example). After the company selected the installed software provider they essentially used the Widen software-as-a-service deliverable as the expectations for the project. Of course, the installed provider said, “no problem, we’ll take care of it.”
As the implementation proceeded (months into it – remember this is installed software and it takes months, if not years, to install because you need to go through your I.T. department and, oh yeah, they have other projects and, oh yeah, they have to buy other stuff and, oh yeah, they have to support it….) they quickly realized that their expectations were not being met and there was no way they could be met within the scope of the project budget. The company decided that taking the software-as-a-service deliverable and using that as the expectation to the installed software provider is just not going to work.
The organization decided the decision needed to be further evaluated and eventually discontinued use of the installed software provider. Chalk another victory up to software-as-a-service models -- setting the expectations so installed software cannot compete. Also see previous blog post, “The Death of Installed Software is Near,” because it is.