Software-as-a-Service is Not Just Your Software Running on Someone Else's Server

I recently published a blog post about the benefits of using subscription-based business models called "What bike rental and the future of software have in common." Many industries are going through a shift of revenue streams from traditional one-time sales to products being provided “as a service” and paid via subscriptions. In the software industry this is referred to as Software-as-a-Service or SaaS. However, there is much more to this than just switching from a perpetual license model to a subscription model.

The “false cloud”

Back in 2010, Salesforce.com CEO Marc Benioff warned attendees at the Web 2.0 Summit in San Francisco to beware of what they called ‘false clouds.’ Benioff said “Companies hosting private cloud architectures do not benefit from economies of scale that ‘real’ cloud offers.” Back then, Salesforce.com's 77,000 customers were running on 3,000 servers spread over three global data centers. Theoretically, 77,000 companies of varying sizes would require at least 100,000 servers to independently run their CRM platforms on-premises or in a hosted solution. This translates to an equivalent output at only 3 percent of the infrastructure needed because of economies of scale and more efficient hardware utilization.

Many software companies are touting that they can deliver their software in the SaaS delivery model. However, what they are offering is often not a modern multi-tenant cloud solution where all customers are running the same software using shared resources and receiving software updates continuously without costly upgrade projects. In addition, these are not true SaaS offerings, where business users can configure functionality that would otherwise require expensive and time-consuming development using conventional single tenant software. These ‘false cloud’ solutions are often marketed as a ‘Private SaaS’ or a SIP (Secure Isolation Platform), but, in reality, are often just another way of selling an on-premise software package as a hosted solution.

SaaS is much more than cost savings

The biggest drawback with the false cloud is not that the customers are missing out on the economies of scale by not sharing resources, but that they will not have a speedy deployment, a future-proof and configurable solution, and the business agility that comes with a modern SaaS platform. 75% of enterprise software decisionmakers surveyed by Forrester rated ‘business agility’ as the top benefit of a SaaS platform, while another 72% rated ‘speed of deployment’ as a key benefit. Saving money, getting better uptime, and higher security are, of course, still relevant arguments for SaaS, but being agile and fast is of even greater importance. This is especially true for software that supports the rapidly changing processes in sales and marketing that can really reap the benefits of the SaaS model.

Software-as-a-Service is not just your software running on someone else's server. It is much bigger than that and should be an important factor when you choose your software vendors going forward.

Three Reasons “Brand” is No Longer a Key to Success

Not long ago, a major focus of marketers was on brand—brand loyalty, brand positioning, the “brand promise.” Numerous books were written on the subject—each claiming to be the “brand bible” for communicating effectively to target markets.

We would argue that brand loyalty and the importance of brand, in general, is diminishing. According to McKinsey Research only 13% of customers are “loyalists” who do not shop around.

Sure, there are Apple aficionados who will never buy a Windows PC. There are folks who continue to drive the same brand of car for decades. And there are businesses with brand preferences due to corporate policy or hardware and software compatibility challenge. However, with the ubiquity of online shopping and buying, brand-based selection is falling, time and again, by the wayside.

Why is this?

User-Generated Content

When seeking a new product—especially a product with which a buyer has had little previous experience—buyers most often rely on the opinions of family and friends, or complete strangers. In fact, in one study by Signpost, they found that 90% of people consult online reviews when making purchase decisions. With the anonymity afforded by the Internet, purchasers of a product can be completely frank about their opinions and experiences with a product. As a result, buyers frequently trust those opinions more than corporate advertising or “brand communications.”

Third-party Reviews

Not only is UGC an influential factor, but so are third-party reviews. How frequently do you make a major product purchase without consulting Consumer Reports, Edmunds, CNET, or the like? Buyers are relying more and more on the expert evaluations of third-party reviewers for three main reasons: 1) they can be accessed from our desk or mobile phone; and 2) these folks do this for a living and are experts; and 3) it speeds our research and decision processes.

What is also common is for buyers to be surprised by what they read. According to the same McKinsey Research study, nearly 60% of customers switched brands once they began “shopping around.”  

Ability to Compare Products

Now that consumers and business buyers can easily shop around and compare products—on price, features, and form factor—at the click of a button, they are not restricted by brand. Online users can find the product that most closely meets their needs—whether the purchase transaction occurs online or in-store. Again, this may mean that they consider or purchase a brand that was not originally top of mind. However, after validating their purchase through user and third-party reviews, this previously unknown brand or product may indeed end up the winner!

What Can You Do?

As a manufacturer or distributor, the most impactful thing that you can do is portray your individual products in the best possible light. If you are no longer able to attract customers based solely on your brand, then you need your products to be able to speak for themselves and tell their own unique stories. This requires compelling, well-crafted product descriptions, accurate and interesting imagery, and insightful product testimonials and reviews. Let inRiver and our extensive PRIME Partner Community help!

Kathryn Zwack, Sr. Content Marketing Manager, inRiver

Make the Most of Back-to-School “Holiday” Shopping

The other evening, as I was heading home from my mountain bike ride, I felt a little nip of fall in the air. Granted, I live in a mountain town and with the sun rapidly sinking behind a hill, the air was cooling off.

However, that sense of fall reminded me that soon our kids will be heading back to school. Indeed, many districts start as early as the first week of August and many schools are in full swing before September hits.

What does this mean?  Back-to-School sales! We are getting flyers in the mail already and many stores have their signs and displays front and center.

Did you know that Back-to-School retail sales are second only to December holiday sales? Indeed, Back-to-School spending was a whopping $75 billion in 2016, according to the National Retail Federation. That equates to more than $500 per shopper, 20% to 25% of which will be transacted  online. Walmart, Amazon, and Target are the winners here.

What is exciting for both retailers and manufacturers alike is that the spending flows across many categories—clothing, electronics, computer software and hardware, office supplies, and home furnishings.

How can you take advantage of the “holiday” shopping extravaganza?

Get Your Demographics and Personas Right

When we think of the school year, it is not surprising we think of adorable grade-school students in plaid jumpers and khakis heading out the door. It is true that this is one key target market—to the tune of 50 million students. However, last fall, more than 20 million students were heading back to colleges and universities in the US. In addition to these Millennials, Generation Z students—today’s teenagers—have a greater say in product purchases and more money to spend. Make sure that you are marketing to all these groups, as well as their parents, and are aware of the lengthy local school supply lists that are distributed each year for all these groups.

Be Prepared—Online and Offline

As we noted above, Back-to-School shopping occurs both online and offline. The key is to be prepared, and well-stocked, with everything that students and parents need. Get a hold of the supply lists of local school districts and college dorms and ensure that those items are easy to locate—both in-store or online. Nothing is more frustrating to a parent than spending an afternoon at the local Walmart, Staples, or Target or on Amazon.com—with supply list in hand—and still having a plethora of items that need to be sourced elsewhere. Creating a “store within a store” will help shoppers move through their list quickly and efficiently. Make sure shoppers can check off every single item on the list at one venue.

Start Early

Although it is already August, keep in mind that Back-to-School shopping, like Winter Holiday shopping, is starting earlier and earlier each year. This may be due to parents’ desire for deals that occur throughout the summer, or due to the known inevitability of Back-to-School shopping. This means that decreasing your time-to-market is as important in summer as it is later in the year. A comprehensive workflow, which includes a product content review and approval process, can help you execute faster and more efficiently.

Remember, too, that improving your product content and keeping it consistent across channels will help to create that “endless aisle” experience and improve the customer experience for all of your target customers. inRiver can help with both these important objectives. Contact us for a demo!

Kathryn Zwack, Sr. Content Marketing Manager, inRiver