I posted here about needing to build brand champions for SaaS startup’s. Bob the Smoothspan wordsmith commented with this challenge;

Turning your customers into “Brand Ambassadors” has always been the dream. The biggest difference between most SaaS and Open Source is that the Open Source customers get something for their participation. They get to shape and “own” the product. Until SaaS figures out how to give something as valuable back to their community, it will be hard for the community to reach the same level.

Ben, in the spirit of Seth Godin’s post about thinking of something very valuable to give your best customer without expecting anything in return, what should SaaS companies give their communities to fire them up?

So here goes… bear in mind that each business offering is different so this advice is very broad brush, I’m more than keen to talk to individual SaaS enterprises to discuss specific strategies for achieving their aim. Anyway;

  • There is no reason that SaaS users cannot feel the same sense of “ownership” as open sourcies. Many open source organisations are viable businesses, there is no reason why a linux business model could not be utilised for a SaaS offering
  • Make your users feel special. If I subscribe to a SaaS CRM service, and obtain extra bang for my back, some extra service that is complementary to the primary offering but distinct, I will feel inclined to champion that product
  • Allow the users to shape the product. Go beyond beta testing and foster a culture of participatory development
  • Open the floodgates – go public with the intention to build a free SaaS product with community led deveopment and build in an alternative revenue stream other than subscriptions
  • Find a niche that is so under-served by current offerings that just by creating a product (free or subscription) you attract passionate champions
  • Adopt a persona of the underdog, appear to be a fighter battling the incumbents
  • Find a vertical that is unserved by traditional software offerings – Facebook bought social networking to a bunch of non social networkers. TradeMe introduced internet auctions (and in many cases the internet itself) to a number of traders
  • Aggregate the spend so that you per subscription amount can be as low as possible
Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

6 Comments
  • I love it!

    Your first suggestion I think is the start of a new business model that might be very powerful:

    http://smoothspan.wordpress.com/2007/09/20/a-merger-of-saas-and-open-source/

  • Great post, Ben. I might write a follow up soon – the open source/SaaS merger introduces a myriad of both business and technical possibilities.

  • Ben. What you have described are principles for building vibrant communities around ANY type of product. It reminds me a lot of Kathy Sierra’s “Creating Passionate Users” work.

    However, I think that it’s a bit of a stretch to imply that SaaS customers are going to greatly benefit from whether or not a SaaS provider makes it’s source code open to its users under a true open source license. Customers react to value (perceived or real). The real value of open source is its freedom, not community. Community is just a byproduct that comes from a well run open source project, not the point of Open Source itself.

    When I say the value of Open Source is “freedom”, I really mean the abilities to: use the software however you want, modify the software however you want, and talk about / share your work with anyone you want. (Read http://www.gnu.org/philosophy/free-sw.html for more detail)

    That freedom delivers tremendous value to anyone who has to run or maintain that software. In a SaaS world that means all of the value goes to the SaaS provider. Saas customers don’t run the software so the value of the code being open source is essentially nothing (except for perhaps some auditing or disaster recovery usefulness)

    I have a vested interest in both the Open Source (I’m a founder of an OSS provider) and SaaS (all of our customers are SaaS or e-commerce providers) camps and want both of them only to succeed… but we all should be careful not confuse the relationship between the two or misattribute where the value comes from.

  • Ben, I think you’ve nicely articulated how SaaS can benefit from what Open Source products derive from their community – participation. Conversely, by simply calling something “Open Source” is not a panacea to vault a service offering above it’s competitors. Damon’s point explains this nicely. I will also add the disclaimer that I work for MySQL and have a different perspective on Open Source than others. Nonetheless, great post!
    Rich N.

  • Yeah but Damon the extension of my concept is that the entire project can be released – you guys assumed that I meant the SaaS core was still private with developers invited in to do plugins (a la facebook) why not open both sides of the equation so the community can benefit from the development – feasible?

  • I understood that you were referring to the entire project. It’s feasible to do but my point is that it is of questionable value. The value behind the code being open source is only there if you or others in the community have to run it themselves. In the SaaS world there is only 1 member of your proposed open source community who would have to run the code… that SaaS provider itself. What possibly would be the motivation for others to want to work on a particular SaaS’s core code other than a few hobbyists?

    It is important to remember that SaaS does not equal managed hosting. SaaS is a SERVICE. All I am supposed to know about is what happens at the edge (API or user/machine interface). Everything else is managed via a business contract. Features I want? its a business negotiation. Bugs to fix? its a business negotiation. Performance? its a business negotiation. In OSS world the hammer I have for non-performance is to fork the project. In SaaS the hammer I have is the contract. Having the source code of a true SaaS offering is of little additional value over having the source code to AT&T, Comcast, or Pacific Gas & Electric’s internal systems.

    Also, the often mentioned fear of lock-in is managed by data independence and transferability, not freedom of the software itself.

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