Need a hole in the wall?

Bookmark and Share Thursday, August 19, 2010

People Buy Holes in the WallPeople don't buy drills, they buy holes in the wall. In the age of internet software as a service, this adage has never been more true. The continual expansion of technology and accessibility that the internet provides us has ushered in a new era of business to business capabilities that were once the domain of only the very large, very financially capable firms.

In the eyes of the consumers, Internet companies no longer provide the hardware/software technology backbone that powers websites and web applications. Rather, the growing base of users who rely on SaaS-based applications to do their jobs and run their businesses think of them in terms of the solution they provide. Buyers of B2B software and services want solutions to their problems. Technology is often too complex and expensive for regular people to properly select, maintain, and use. In the end, technology is often viewed as just adding to the problems, not solving them.

As an example, let's think about the underlying architecture of SalesForce. There's nothing groundbreaking in the original, core product. It's a database with a few web forms that stores a relatively small amount of data. Sure, the product has evolved into more complex feature sets, and there is a scale issue that Salesforce makes look easy, but at the end of the day they're not selling storage of address book data in a web accessible Oracle database. What they're selling is the ability to see into the ever-elusive sales pipeline and take control of the future revenue of the company. That's why we all know who SalesForce is today.

With the proliferation of options and choices in business-focused SaaS products, it's up to hosting companies to realize that the packages they provide need to adapt to a solution focus. When a small business owner subscribes to a hosting package, do they really know if they want PHP5 or Java installed? Do they care? Or rather, do they need a small business solution - a simple public facing website, a wiki for internal communication, and a simple CRM for Sales and Marketing to use? A large client-services team or company might want a solution that enables them to create dozens of client portal extranets on the fly and then shut them off when each project finishes.

When faced with the PHP5/Java question, the fear of the unknown, or of making a mistake that will cripple the company in the long term will always be forefront in the customer's mind, slowing the selection process and costing both them and the service provide time and money. When faced with the question of "Do you want your employees to collaborate more and document their SOPs?" I think we all know what the most common answer to that question will be - "Yes, where do I sign up?"

Photo Credit: Focus Fusion

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