A humorous webinar from early 2008 about comparing enterprise (installed) software companies to grocers and SaaS companies to chefs. Grocers deliver ingredients for their clients to cook up; chefs have to deliver hot and tasty meals - fully cooked.
Chef says “I think you’ll like this combination!” and “How would you like that cooked?”
Licensed sales processes are all designed to get payment, not necessarily to get happy users.
. Customer meetings, third party surveys, sales issues, annual user groups, online forums, industry analysts, product reviews…
What are their agendas?
Service model: your own log files
Precise, real-time, unemotional
What features are being used? Segments?
Error reporting
Restaurant must serve many diners, with each getting a pleasant personalized experience.
Fixed but extensive menu gives some personal choice (features, options). With applications, need limited range of personalization depending on app. Application preference levels: each user, each customer, supervisory roles, how deep?
Availability: must keep restaurant open for posted hours, even if few diners. Nothing worse than coming there, finding doors locked. App hosting: always up except for very limited maint hours.
Privacy and security: must protect each user’s data from others and from provider’s employees, may include existence of subscription. (Option for private dining room. Do not see other diners.)
Charged for what was ordered/eaten, varies by diner. (Prix fixe is a possibility.) For applications, clear pricing model and back-up details if transaction- or usage-based. Local language, currency, time zone? etc
Upset diners never come back. Frustrated users never forget. Allow customers to brand/customize look?
Truly helpful online help: licensed software “help files” are generally worthless; online services are held to a higher standard. Human support: all online help eventually fails. Now what?
[Alternate analogy: hotels versus sleeping at home. Must provide level of security and privacy to match home, plus services to make visit attractive.]
Conceptually, well-designed software applications should be hostable. In practice, companies that don’t plan to host apps soon trade off the many detailed requirements for other features/needs. E.g. multi-level permissions that let a customer’s master-admin see and sub-manage preferences for all users at that company, without seeing any users at other companies. If you are serving a very large customer, this might require 2-3 levels of admin scope.
Completely new skill set and operational experience required. Classic software licensing companies don’t even have a department to assign usage costs. Generally requires a new “Operations” group with hosting or IT experience, plus new sets of processes (testing, release, roll-back, incremental update, etc)
SLA: Service Level Agreement
Analogy: Chef has to correctly cook and serve meat, while grocer depends on customers to safely prepare, serve, decide portions, plan for number of eaters, cost out foods…
Licensed software PMs struggle with how to get customers to do semi-annual updates and let go of version N-3.
Compare to your first 5 minutes in a new restaurant: atmosphere, first taste of food, service, noise. Very easy to be turned off on first visit. One bad taste and you’ll never be back. Must be hugely impressive to recommend to friends
Now consider visit to survey tools site; search engine; music page; online office supply… most early subscribers to a service are really just trying it out. Ready to cancel within 30-day test period or otherwise run away.
Installed base marketing: Read and re-read your privacy policy
Be prepared to fix any problems they report
iPass example: Must get each end user to install laptop software. “What can we do to help?”
Top responses to AirMagnet newsletters were usually not to specific month’s content. Instead were: how to get upgrades, tech support contact info, upcoming releases, sales contacts for add’l software copies, unsolicited success stories. Reponses to specific items/articles were secondary.
Alternative to “seeing if the dogs eat the dog food.”