Getting switched on to SaaS

As software as a service (SaaS) begins to revolutionise the IT and communications landscape, software vendors will need to reinvent their business models to ensure sustainability. While hype is high and uptake is still relatively low, vendors would do well to consider the implications of this trend and future-proof their businesses.

Currently, about 50-60% of a typical software vendor's revenue stream is generated by sales of its software systems, with the remaining percentage generated by monthly maintenance contracts. SaaS presents a complete departure from this traditional model. It treats software in the same way as any utility, such as electricity, and individuals or businesses plug into the solution and pay a monthly fee.

Therefore, if software vendors want to play in the SaaS space, they have to fundamentally change the way they do business. It also requires a complete mind shift about how they go to market and position themselves.

While not without its challenges for vendors, SaaS presents some exciting opportunities. The model offers vendors longer term and secure annuity income. It also opens up new markets.

Previously, individuals and small and medium-sized enterprises were out of reach for most software vendors because they simply do not have the resources required to purchase a complete communications solution.

While not without its challenges for vendors, SaaS presents some exciting opportunities.

Dave Paulding is Interactive Intelligence's regional sales director for UK, Middle East and Africa.

As SaaS offers the ability to access these solutions without the capital outlay, it also opens up the possibilities for software vendors to create specific solutions which can be targeted to these markets.

This impacts greatly on the contact centre industry. On the one hand, contact centre businesses stand to benefit significantly. Often they have fluctuating needs, and SaaS offers the opportunity to scale services as and when required.

For example, a contact centre may be approached by a new client looking for a campaign for three hours a day for two weeks. It would not make financial sense for the contact centre to buy more agent seats for this period of time, but by using the SaaS model, it would have the ability to increase its capacity at will, allowing greater flexibility as a business.

On the other hand, contact centres need to be aware that communications services have special considerations. Communications are often considered even more mission-critical because they involve personal contact with customers.

Temporary loss of access to CRM can be a major inconvenience, but inability to take calls from customers can threaten the very existence of a business. This is why many organisations have been hesitant to trust anyone with their critical communications.

The disadvantages of SaaS for communications services, however, include extreme business disruption in the event of a service outage; variable call quality that can make customers think they are dealing with a shoddy offshore operation; loss of control over valuable data; and lack of security for both voice and data.

Perhaps what is needed is a hybrid model for communications services - one that combines the best of remote service delivery with local control. This would enable both contact centre businesses and regulated industries to harness the benefits of SaaS without the associated business risks.

* Dave Paulding is Interactive Intelligence's regional sales director for UK, Middle East and Africa.