SaaS hosting providers

A great article at Joel York’s SaaS Blog (Chaotic Flow) titled “SaaS Marketing Tips – The Truth Shall Set You Free”, explains the critical difference in the sales process between selling traditional software and Software-as-a-Service. The difference is transparency or lack thereof for the software company , and a sales process difference which could be applied to many as-a-Service businesses, including SaaS hosting providers.

Traditional software companies instruct their sales representatives “to refrain from divulging more details than what is necessary to complete the transaction”. Because of the one-time payments arrangement in these deployment frequency contracts they create a short-term attention to both the sale and the relationship you have with your prospective client. But when using SaaS services, users can “try before buying” and, based on the contract length and the contract’s length, walk away at any point should the service not be suitable for them. This creates a long-term focus which makes transparency and trust between both parties more normal.

As Joel says, Google AdWords is a great example:

“Ask yourself how much you’re spending today for Google AdWords without ever having had a conversation with a salesperson. How does this compare to your personal average selling price for online transactions? Consider asking yourself why. The answer is transparency from company image to cost-per-click.”

While Joel talks about the software industry, this holds true for any product that could also be services including SaaS hosting. This is seen with big expensive items such as houses and cars and also with everyday purchases like books and music. The larger the purchase and commitment, the greater risk is involved, and the less trustworthy the two parties are. Complete transparency is the only logical play in dealing with businesses offering Product-asa-Service in the same way as it is the only feasible option when dealing with SaaS hosting providers.

Anyone who has played”the prisoner’s dilemma” (a game similar to a negotiation) recognizes that when the game can only be played once (like purchasing a product like automobiles) both sides have the motive to “defect” or lie (it is the rational choice). But, when games are played several times in a time that is not known to both parties (like an subscription-based service) the rational strategy would be to “cooperate”. The repeated play of “games” provides the motivation to make the leap of faith into a collaborative strategy. If one side is not satisfied to the other, the latter will also defect for the remainder of the negotiations , and reverse. With just one defection, there’s no trust and everyone is worse off for the remainder of the series of games.

The model of as-a service is based upon this “repetition of playing games” confidence and co-operation; even though you could benefit in the short run if you hide the truth however, over the long haul you will have lost an important connection. The commitment to openness is one of the less well-known benefits of not just transferring your company to an as-a service company but purchasing from these types of SaaS hosting firms.

Many SaaS hosting providers see and experience this kind of thing every day. When companies understand the value of transparency, they will engage with their customers in an effort to learn about their requirements. If the requirements of the prospective customers aren’t in line with what the SaaS hosting provider can provide, the company will let them know. There is no point for an as-a-Service provider to market a product to the client they don’t need. That is not an ideal win-win situation. The customer will soon find out they don’t require your services and will move to another company. This creates a waste of time for both the client and the company. This is something companies offering as-a-services must practice.

Take a look: have you ever seen an as-a-Service business succeed that isn’t built on trust and transparency?

Online Tech owns and manages SAS-70, a secure and reliable multi-tenant data centres across the Midwest. Offering a wide range of colocation and managed dedicated server services for SaaS hosting, Online Tech reduces IT data center expenses operating risks, downtime and operational risk and guarantees that their SaaS clients servers are always up, always online, and always safe.

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