A couple of posts in the last day or two got me thinking of some added value for SaaS. Over at the unreasonablemen they discuss the differences between ASPs of old and SaaS of today – the premise being that SaaS is differentiated and add more value than ASPs did.

Bob at Smoothspan started talking about vertical benchmarking for SaaS customers and this led me to a whole new value proposition for SaaS that I hadn’t given much thought to (and a question or two that raises).

If I look at my own businesses, I can think of a few times in the past where some benchmarking would have been really valuable – metrics like marketing spend as a percentage of revenue, remuneration rates, travel costings, minute production rates etc etc. This information is vaguely available but from diverse sources, generally out of date and not overly specific (not to mention at a significant cost given the hassle involved in mining that data.

SaaS obviates all of these issues – if I’m using Xero, at the back end Xero can do some simple querying to mine some comparative data that gives me some averages I’m interested in (although Xero is probably a bad example given the sensitivity around financial metrics). Similarly Salesforce can allow me to compare pipeline timings with others in the same or different industries.

Like all of these things however there is a but, and that big but is privacy – where does the line get drawn between general, non-specific data and something sensitive – as we’ve seen of late around the Beacon debacle – privacy is a big issue for consumer users, it’s significantly bigger for business users.

It is however a worthwhile value-add and one that SaaS is uniquely placed to deliver upon.

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
  • Benchmarking is valuable even today.Saas is something great but SaaS for benchmarking, hmmm.. No from me. Tomorrow something which is better than SaaS might come up.. Might..

    Ann
    http://modazzle.com/cms/modazzleLp2.html?channel=CM&camp=SalesForcenz

  • Exactly.

    An issue for SaaS providers is communicating to customers, who will be concerned about privacy, that they can participate anonymously but get the benefit of the community data for benchmarking.

  • For sure Rod – proving to them that the value is huge, the risk is negligible and the SaaS provider is an honest broker – helps if they’re publicly listed doesn’t it!

  • Ben

    I think there are two things to make benchmarking work (independent of whether you are SaaS or ASP)

    1. Trust – I know its obvious, but the provider of the benchmarking has to be scrupulous in how it displays the information so no specific client can be identified in the results.

    2. Reciprocity – if you want benchmarking, you have to accept that your data will be part of the benchmark information.

    I’ve been part of the successful benchmarks which are just awesome – however they have been against other markets as opposed to competitors.

    They have been on the basis of ‘ if we all contribute this information, we all lift the bar’. Costs have been low – if you contribute your business information you are only up for paying the cost of pulling it together.

    My only concern is whether this is common currency in business today – basically would you share your information to get access to the other information?

  • Ann – I guess my view is that yes, SaaS is here to stay. SaaS and benchmarking go together like… well like sunny days and cold Monteiths beer (it’s a New Zealand thing!)

    Miki – yes I would share information if the benefits were significant – no competitor would get my individual information just an aggregated figure – it allows me to do what SaaS does for software – that is provide my solution (whatever industry that solution falls within) in the most efficient, user-centric and solution-centric form possible!

  • Hey Ben,

    Isn’t the benchmarking the same as the IDC’s and other research houses do today? In a very cumbersome manner.

    If you have enough scale you can maintain the trust and provide obscurity. The more scale you get the better the results.

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