Customer Relationships

Jim Berkowitz’s blog today makes mention of a rather amazing interview with Harry Debes, CEO of Lawson Software, in which Debes predicts that the SaaS “industry will collapse,” starting with Salesforce.com, in two years. I presume that to save space, the editors of ZDNet Asia omitted the stuff about Debes also predicting that those newfangled cell phone gadgets will never catch on.

Like it or not, SaaS is now well established as a delivery model. However, you gotta be pretty out of touch to consider it an “industry.” That would be like calling car leasing an industry - it’s not an industry in and of itself, it’s a delivery model. The interview is somewhat revelatory - as Jim points out, it’s kind of remarkable when a CEO admits a view of people as “stupid,” which is not the kind of face you really ought to put forward in a customer-centric world. Exhibit B is this nugget from Debes :

“Getting signed up as a SaaS customer is fast, but getting out is just as fast, whereas traditional software is like cocaine — you’re hooked.”

Great analogy, Harry. Compare your product to Bolivian marching powder. You may want to check the drywall in your CMO’s office - there are probably some forehead-shaped indentations in it you’ll need to have fixed.

Debes also missed the point of how his customers may look at this equation: if a customer is dissatisfied with his software provider (maybe because he discovers the company’s CEO thinks he’s “stupid”), he can switch easily (or at least, more easily) with an SaaS approach than with traditional software. SaaS not going away; in fact, it’s the lever for many small businesses to get into things like CRM, which used to be the exclusive territory of large businesses. The power resides with the customer, even the customers of business software.