SaaS and Customer Choice

Looking over Colin’s last post – it appears to me that there seem to be two schools of thought when it comes to “hybrid” application providers that offer both SaaS and on-site versions of their software. One school says, “No way can these guys survive juggling both.” While the other school says – “the only way to survive is to offer customers choice.”

The latter is starting to become a more regularly accepted notion. Joshua Greenbaum, who I like for more reasons than being a Saelsforce.com skeptic, makes a good point about SaaS and Harry’s opinions that Colin talks about in his most recent ZDnet blog post.

Perhaps the most succinct point is this:

These same forces for customer choice will also dictate that hybrid SaaS/on-premise business models will be the ones that truly succeed in the long-run, precisely because customers, being only human after all, want to be able to do two things that, right or wrong, mean some version of on-premise is here to stay.

Greenbaum goes on to note that these two things are vertical (or other deployment-specific customization) and local control of data will make it impossible for pure SaaS plays to survive.

I agree in a large part. We have worked hard to provide choice, and also have it both ways with data center Edition, which allows for a more multi-faceted (as well as multi-instance) approach to SaaS – with large arrays of partners offering large arrays of hosted SugarCRM-based solutions.

Simply put – companies like Salesforce.com did a great job of forcing the industry to equate SaaS with multi-tenancy. And while they enjoyed a good run, ultimately the adherence to multi-tenancy will be many a SaaS players’ undoing.

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