BMA SaaS Presentation -- Good Questions and link to the Presentation

I gave my talk today at the Business Marketing Association monthly breakfast roundtable (sold out ☺) and had a lot of great questions. I thought it would be worthwhile to share a few and give my perspective:

Q. Is the standard practice for SaaS vendors to have a methodology for customers to get their data back should they switch vendors, or their vendor goes belly up?
A. My experience suggests that most providers are pretty far along in supporting this and, at the high level, have various methodologies to export the core data in a variety of forms and formats. The reality of what you might do with this data is a bit trickier – some of the data and/or metadata might in fact be in a data model that doesn’t have an equivalent in another system. Think about a purchase order approval process where the SaaS system records everyone’s vote, their comments, and maybe other data. The odds of another vendor supporting this exactly – about zero.

Q. For an early stage SaaS company, and given the current economic climate, how do you convince customers to trust that you’ll be around after the tsunami passes to support their needs?
A. I actually think this one is not too challenging, at least compared to other early stage companies/products. ALL early stage companies face this question, and there are certain customers who don’t belong with these companies at an early stage (get them out of your pipeline!). For those that are more comfortable with early stage companies and products, the SaaS model with a recurring revenue stream provides a “backstop” to the “afterlife” of a SaaS company. Assuming the SaaS vendor has built up an appreciable customer base and renewable revenue stream, the reality is that someone (investor or an individual owner) will be willing and motivated to keep serving these customers. Earlier stages than this, you should only be selling to your true believers.

Q. What is the role of the channel relative to SaaS companies?
A. I think this is a fascinating area for further study (a future blog post, maybe?). My opinion is that SaaS companies have yet to scratch the surface on what to do, and they ignore this at their peril. As an example, Microsoft has over 500,000 partners in their network pushing their solutions. Say what you will about the machine in Redmond, that’s a lot of people out their advocating your approach to solving customer needs. SaaS companies need to either create a new channel or figure out how to co-opt players out their today, but not doing anything will, in the long term, limit their potential. That said, for earlier stage companies trying to figure this out before you get your solution nailed, your first customer base built, and your value proposition crystal clear can be a recipe for disaster.

If you’re interested in getting a copy of the presentation, it’s available for download here.