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5 Reasons to choose SaaS over traditional software

April 19,2010 by jcheney • Leave a Comment 
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For small and medium size organisations, Web based applications like Workbooks.com provide a much more cost effective way to deliver effective I.T. to your business. Here are five reasons why:

 

Simplicity

With applications delivered on-line, all the complexity of the underlying IT is no longer your problem. At Workbooks.com our customers don’t worry about upgrading hardware, or which operating system version supports which database, or which VPN will work. We take care of the IT complexity so you don’t have to. You just need a computer with a web browser and you can access your business applications from anywhere.

 

Guaranteed Levels of Service

At Workbooks.com we guarantee your applications will be available 99.5% of the time. In the event we don’t deliver (which has not happened to date) there are penalties to be paid by us. Typically with most traditional software you get no guarantee on how well it will perform.

 

Cost Effective Pricing

There are a number of reasons why we are able to deliver ‘enterprise class’ applications to our customers at a much more cost effective price than traditional software. Including the fact our infrastructure is shared across multiple customers, so there isn’t the cost of unused I.T.. Because we don’t ship traditional software and have a controlled environment we don’t have to test our software with different versions of operating systems and databases, or write installations manuals or write upgrade guides for our customers. All these reasons allow us to produce solutions at a much more cost effective price.

 

Security

For the majority of our customers their key business information is more secure in Workbooks than it was in their previous I.T. systems. At Workbooks.com we run two geographically separate datacenters which contain the I.T. infrastructure to deliver our applications. Both datacenters have virtually identical equipment and your data is automatically replicated between the two. So in the unfortunate event that a disaster occurs such as a bomb or a fire in one of the centers, the second datacenter can continue delivering the Workbooks service. In addition to this highly available infrastructure we maintain a rolling backup of your data. All our customers benefit from this common infrastructure, although we do keep each customers’ data in a separate database to ensure your data remains confidential. Compare this infrastructure to what you have in place today: What would happen if there was a fire at your building? How quickly could you get new servers, reinstall all the relevant software? and How current are your backups? Would you be down for just a few days or would it be weeks? What impact would the downtime and potential loss of data have on your business?

 

Long Term Customer Relationship

We believe that this last point to be the most significant. At Workbooks.com we charge you an annual fee for the service. The truth is by the time we take into account the sales and marketing costs of acquiring a new customers and the money we have already spent on the infrastructure we don’t make any profit in the first year of the relationship. So it’s important that you stay with us for several years. This means we are very focused on ensuring you remain happy customers over the long term. You can contrast this with traditional software vendors who make the majority of their profit on the initial software license sale and have a relatively small ongoing support fee. Their focus is on getting you to buy the license and not necessarily the longer term view.

Posted by: melly on Fri, 03/05/2013 - 16:49

I am tempted of the idea of better costs and better security, these facts alone are convincing enough for me. I am also considering the cloud computing alternative, do you have anything to share with us about that?

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Posted by: John Cheney (not verified) on Thu, 22/04/2010 - 17:47

Thanks for the comment. When talking to new customers we typically have two different hurdles to overcome. The first is why SaaS? the second is why Workbooks.com? Although they don't always come in that order! One of the reasons I created the Blog post is that the SaaS community as done a poor job of outlining the business benefits of SaaS - especially to the SME market place. Historically the IT industry has been selling FAB (Features, Advantages and Benefits) - but the SaaS messaging is very different. Take a look at the market for Business applications; Salesforce.com is the only $1 billion revenue SaaS business, with the number 2 player Netsuite delivering $150 million. Compare this with the more traditional software vendors of Oracle $22 billion, SAP $11 billion, Sage $1.9 billion and Intuit $3.2 billion. Whilst I recognise that some of these have some SaaS revenues and have been around longer, the SaaS community can hardly claim to have won the battle. We often end-up in sales engagements where we complete with Goldmine, ACT! and Maximiser, you might be surprised at the number of times customers say "why should I pay you £10k per annum for your service, when I can get XXX product for a £15k upfront payment instead." So I still believe it's important we highlight the benefits of the SaaS model to the 'majority' of the business (not IT) community who still don't fully understand the merits. To deal with your specific question - differentiation is an interesting topic. Differentiation by is very name implies the question - What is the difference in your solution compared to my alternatives? That should be the second question customers ask, the first should be what value can you add to my business? So let me take the liberty of trying to answer both. Value - The value we deliver to our customers is primarily about making their people more effective by giving them better tools to do the job, and more importantly the right information to make better business decisions. Making them more effective typically has two benefits; they increase sales and/or reduce operational costs. So the second question is how is Workbooks different from other ways people could derive this value? As you know our primary focus is on what we call ‘Prospect to Cash’ which encompasses marketing, sales, customer services (collectively known as CRM), sales order processing and fulfillment/delivery. So alternatives solutions in this area are generally either department solutions e.g. Sage Line 50 + Salesforce.com or an integrated suite e.g. Netsuite, Sage Line 200 or SAP Business by Design. With the department solutions in order to get the benefits I described you need to spend considerable time integrating different systems. Without the integrating you really don’t the efficiencies or access to better quality business information. The cost and complexity of this approach means that the majority of customers just don’t both and make do with no integration and use spreadsheets instead. The Suites solutions I do believe can deliver the value I described – however many are complex to implement and expensive to purchase. Not least because implementing a complete ERP system even for a small business is a significant project. Our approach of addressing the core business processes, which run across the business ‘Prospect to Cash’ without extending into specialist areas like accounting mean customers can derive the majority of the value of an integrated system without the complexity of full ERP. So we believe we have a differentiated solution for a segment of the market, which is SME businesses looking to improve the effectiveness of their businesses, without the need for complex IT infrastructure for a reasonable price. Fortunately our customers seem to agree as you will have seen from some of our case studies.
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Posted by: wandybrad on Wed, 12/09/2012 - 05:48

As long as ISP's cap the upload speed, charge for data usage, cloud services continue to undergo security/privacy breeches, and you can't get the Internet everywhere for a reasonable price, it just makes more sense to keep the files on your person where you can control it. personal statement critique
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Posted by: Dennis Howlett (not verified) on Mon, 19/04/2010 - 16:21

It feels to me that most if not all of these are what I would call table stakes. If I can't offer these as differentiators of the broader SaaS model then I'm not going to be at the starting gate. So what I already need to know is how firms like Workbooks is going to differentiate beyond the obvious?
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Posted by: nobelboy on Wed, 01/05/2013 - 15:01

Hey there! I could have sworn I’ve been to this blog before but after browsing through some of the post I realized it’s new to me. Anyhow, I’m definitely happy I found it and I’ll be book-marking and checking back often!

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