The SaaS market is changing – perspective from a SaaS MD

Until recently, the market for SaaS software has been like the “American Frontier” in the United States – what I mean by this, in the context of my absence management software company TeamSeer, is that we were selling to customers who were buying something completely new, had probably never bought a SaaS product before, and were probably using paper forms and spreadsheets to track their holidays. We might on rare occasions replace “in-house systems” (as an aside, see my post on “why developing an in-house absence management system is crazy” from 2010) but we never, ever replaced one of our competitor’s systems.

Twelve months ago, that started to change. We won our first customer from a competitor that had let them down. Since then, we have won several new customers who have been using another SaaS product. There seem to be two main reasons – limited functionality, and poor customer service. Not price.

As regards functionality, one of the things that’s interesting / difficult about selling software is resisting the urge to show your prospective customer everything the software can do. It presents us with a dilemma, because while we think TeamSeer has the most comprehensive functionality, we don’t want to overwhelm our prospective customers. So if a prospect has a demo from Competitor A, Competitor B, and a demo from us, then they might go away thinking “well, these systems are all the same”.

And customer service, well, you get what you pay for. When companies have been buying SaaS software they have (in my view) generally ignored the question “what’s your customer service like”. And of course, if you were to ask a software “what’s your support like” they would hardly be likely to tell you it’s poor, are they! 

So – you can only find these things out after you’ve lived with someone for a while. Your software doesn’t do something you want it to do, and the support you are getting isn’t great. And if a company now has several SaaS providers, and a range of experience with them, they can get smart looking around.

My knowledge of American history is a bit limited so I will avoid trying to apply what happened in the US after the colonisation to the SaaS market – but it might be fun! Wars, gold rush, railroads, bandits.. thoughts anyone?!


About saasmd

I am an experienced software-as-a-service entrepreneur, based in London, UK. I love building interesting software businesses. My current venture is StorIQ, a platform to help bricks-and-mortar retailers manage their operations more effectively. This blog is a space to share low-level techie stuff that I think other people will find useful.
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