In my habitual blog trawling, I came across a post by Stuart Bale, MYOB‘s man behind their On-demand accounting offering. In the post (dated March) he spoke with some excitement about two developments;

  • He’d written the first post on the first official blog out of MYOB
  • He was launching MYOB’s On-demand offering

I have already posted about MYOB’s BusinessBasicsOnline (BBO). In a tragic oversight the URL was not reserved and Xero had managed to snaffle it up and point it to their own site (a situation now remedied apparently).

I was pretty excited with the advent of BBO. MYOB is a major Australasian player with a majority in the market, this momentum, coupled with an on-demand offering could prove incredibly compelling. I’ll review MYOB’s offering a a later stage – this isn’t the post for that.

Looking at Stuart’s blog now, I see that much changed in the space of two months, he’s now firmly ensconced at Xero having moved on from MYOB.

No one can know his reasons for moving but I’ll go out on a limb by guessing that it may have something to do with trying to disrupt an existing business model from within. I’ve posted previously about the pain that traditional software vendors must feel trying to morph to a SaaS model – it threatens their traditional revenue models, it cannibalises sales and it demands an entire new sales strategy – unless the ISV is 100% behind it, there is a difficult road to travel. It’s hard and frustrating innovating in that sort of environment.

But there is another way – so long as the incumbent is brave enough. There is no technical reason that an existing player cannot create a fantastic SaaS offering – the barriers are primarily cultural. I like to think of it as similar to the concepts espoused in my seminal (in my eyes anyway!) posts here and here about getting the best of OpenSource and the best of SaaS.

So here’s the Diversity Limited 5 step plan to morphing your business, consultancy roles greatly accepted;

  1. Accept that disruption is going to occur and identify that it’s better to disrupt from within than without
  2. Accept that for disruption to occur, control needs to be given up.
  3. Dedicate resource – people, money and time – to building a dev team charged solely with finding the “golden disrupter”
  4. Accept that disruption will hurt short and medium term revenues, but will ensure long term survival
  5. Once the product is there, don’t try and subvert it to suit the current status quo
  6. Don’t even think about having the same sales personnel or strategies selling the traditional and the disrupting offering – it won’t work

For anyone who wants a lesson in how to do it – Just look at Larry Ellison and Netsuite – not the product itself but the way it was developed with independence and long term focus.

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.

  • Hi Ben,
    Thanks for the mention. I’ve made a reply on my blog here.
    Regards, Stuart

  • You make some excellent points about the challenges for ISVs moving to SaaS.

    I would also add a vital point is that senior management need to commit to making the change happen.

    There is a risk that while they research SaaS, they limit resources to not distract from the real-business of the existing products and services. This is the case where SaaS subscriptions will replace the predictable stream of maintenance revenues from existing products.

    In my experience senior managers, and especially company owners, find it difficult to make the break with the past and commit the long-term future of their ISV to SaaS.

    If they try to play it safe and try to dip their toe in the SaaS waters then they are making a big mistake. The move to SaaS needs total commitment.

    As the saying goes “he who hesitates is lost.”

  • Thanks Andrew – I agree – the biggest issues are cultural

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