Makin' the doughnuts.
Posts: 10
| Created on July 16, 2008
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The Leverage Community Platform has always been delivered through a 100% software-as-a-service (SaaS) on-demand model. Today, with the explosive growth of applications like Salesforce.com, Google Apps, and Facebook, justifying that approach to our customers, partners, and friends usually isn't too difficult. Most people we encounter appreciate SaaS for its ability to deliver rapid deployments and frequent updates, and to help offload work from typically very stretched IT groups. There are a lot of great reasons why Gartner predicts that SaaS adoption in enterprises will grow at such a rapid rate.
However, this most definitely was not always the case. When we were first starting out, some prospective customers would tell us they really liked our software, but they would only buy it if we offered an installed version. They weren't ready for SaaS quite yet, but we really believed it was the best model for our customers and so we focused on it entirely. This led to a number of friendly exchanges between yours truly and our sales team that went something like this:
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Salesperson: "Joe, good meeting today at CorpX. I can sell our platform tomorrow, no problem! But it has to be installed. Cool?
Me: So, that's not really our model, remember? Because then they'll need to buy machines, database servers, app servers, the works. Complicated, expensive...
Salesperson: Nice! Sounds like I can sell them $4.2 trillion dollars worth of stuff, that's good. So, anyway, on the way home from my meeting I stopped by the Ferrari dealer, and they definitely do have the red one that I really like, so I think we're good there. Anyway, so when are we going to create an installed version?"
Me: "Well, we're really focused on on-demand, so...will never work for you? How about never?"
Salesperson: "How about I let the air out of your tires tonight?"
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As you can see, we're a very tight team. Also, I usually take the train.
So, I know what you're thinking. In this age of giant financial bailouts, what's $4.2 trillion dollars? But back then, when we were just starting out, and credit swaps were but a glimmer in some Armani-suit-wearing banking CEO's eye, that was still a lot of money. So for us to say "no" to creating installed software forced us internally to really ask ourselves: "why are we so committed to this on-demand model?"
As someone who cut his teeth over the years developing installed applications, I thought that answer was easy and obvious. From a product development and engineering perspective, SaaS is a tall drink of water. No more installation problems! No more versioning problems! No more sitting on the phone with someone trying to figure out which version of which database running on which operating system isn't compatible with which version of which driver! Putting all those issues to bed sounded great to me. Good for us, good for our customers.
But, the truth is, if you are really committed to creating enterprise-grade software, then there are always development and engineering issues to solve, regardless of the model. And while SaaS certainly makes some issues easier to deal with, it presents its own set of challenges to engineering teams. And, more importantly, just because we liked it from an engineering perspective wasn't really enough of a reason to decide how best to serve our customers. Technology should adapt to customer needs, not the other way around.
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 | And yet I still just loved the on-demand model.
And, over time, the more I realized why. It wasn't the CTO in me that loved on-demand, it was the startup co-founder who did. Because when we buy software and systems at Leverage Software that we need to use to do our jobs, if they're on-demand then it means that we get to focus on our business, not on some system.
For example, if we use an on-demand CRM system, rather than occasionally having to figure out why such-and-such account record didn't update properly, I get to use that time to think about a cool new feature we want to develop. And if we use an on-demand analytics package, rather than spending ten hours with someone setting up some server somewhere, those are ten more hours I get to spend with a new customer understanding what they are trying to do with their community. And so on. On-demand software and services gives us the ability to spend our time where we want to spend it: on our customers, our employees, and our partners.
And that is exactly what we talk about, every day, when we discuss our own platform: how can we help our customers focus on their own customers, their own employees, their own partners? How can we help give them their time back so they can think about their people, and not have to worry about one more system? On-demand isn't a technology issue for us, it's a business decision that goes to our core. We want to help our customers succeed wherever we can by allowing them to focus on their people, not their technology.
I have been in software way too long to believe that SaaS is some sort of silver bullet. Nothing is. Saas has its own limitations, its own challenges. Is it (or are we) perfect? No way. Is it for everyone? Absolutely not -- there are definitely times in which installed software can make sense (especially if you have a large engineering team at your fingertips and they have some time on their hands, open source in particular can be a great option.)
But, for us, and what we are trying to do for our customers, SaaS is definitely the right model. And I have been thrilled to see that so many companies have adopted it.
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