There’s a zombie uprising in the software industry. Two years ago, client/server software was dead and Software as a Service was king. Customers simply had to choose the best SaaS player. Suddenly though, the client/server guys have risen from the dead. They have great makeup artists because they can resemble true Software as a Service players from a distance. The practice is called “cloud washing” and it’s confusing to customers because many times, these imposters are hard to distinguish from their true SaaS competitors.
Multi-tenant Software as a Service is the gold standard in the software industry today. It is the best model for both customers and providers because:
- Customers pay only for what they need and pay as they go
- Critical bug fixes and improvements can be rolled out to all customers in minutes – not months or years
- Performance is consistently reliable because the software is literally tested every single day by every single user on a true SaaS system
- Upgrades and enhancements are available quarterly
- Business critical data is always safe and secure
- Real-time APIs mean customers never have to worry about integrations or customizations breaking
If you look at the growth rates of true SaaS companies, they are among the largest and fastest-growing companies in the software industry. Customers ultimately want to align themselves with these winners because they will deliver the best solutions, devote more resources to R&D and service and their growth rates will allow them to fund acquisitions to fill any gaps in their offerings.
Because it can be tough for customers to tell the good guys from the zombies, here are a few quick tips:
1. Look out for fog: Just because a provider says it is going to host the software for you, it doesn’t mean that it’s true Software as a Service. Virtualization software from companies like VMWare and others have allowed the dead client/server players to host the monstrous server-side components of their solutions “in the cloud” for customers. These vendors can’t roll out updates to all of their customers at once. Each customer needs to be updated one at a time. That means that as the company grows, the pace of bug fixes and improvements will slow and eventually grind to a halt. Spot the Zombie: “Could I host the system at my location?” If the answer is anything but “No,” it’s a zombie.
2. Check its footprints: Just because the demo is performed in a Web browser, the software can still be client/server. Many zombies have figured out how to use software plugins to make it appear as if their fat client software is actually Web-based. But these solutions require that customers install software on every user’s desktop. True SaaS software is “zero footprint,” meaning there is no software ever to install on the desktop. Sometimes the vendor requires a Java plugin, sometimes it’s something else. Whatever it is, it means major IT costs and headaches for the customer and it’s not the real deal. Spot the Zombie: “Can I use the system from a browser in any hotel lobby?” If the answer is anything but “Yes,” it’s a zombie.
3. Look at their Joints: True SaaS solutions use something called an API to integrate with third-party systems. These systems make integrations a snap for developers and allow the SaaS provider to make major changes behind the scenes without ever breaking integrations. The zombies usually build integrations directly to their underlying database during implementation, which means costly services charges add up quickly every time something changes in the software. Because customers hate this, zombies are frequently unable to make structural changes to their software and that prevents them from ever making major improvements to performance or functionality. Spot the Zombie: “Can I have a list of partners and third-party developers who have successfully integrated with your APIs?” If the answer is anything but “Yes,” it’s a zombie.
4. Make Yourself Bigger: True SaaS solutions are “multi-tenant.” This means that the system is designed from the ground up to allow customers to grow from a single user to thousands of users overnight, delivering consistent performance along the way. It’s one of the biggest benefits of SaaS. Zombies simply can’t offer that because they need to make major changes to their systems in order to accommodate growth. System performance slows progressively as customers grow their businesses – ironically, this happens just when they need the system to perform at its peak. Eventually the customer outgrows their server and the zombie will need to “perform a server upgrade,” requiring significant downtime and big bill. Spot the Zombie: “If I hired 1,000 new users tomorrow, would you need to change anything in the system?” If the answer is anything but “No,” it’s a zombie.
If you’re still unsure, ask how many employees they have and how many they’ve hired in the last six months. Young, smaller zombies can grow fast because they are able to lure unsuspecting customers in before they really start to stink. Bigger zombies are usually growing slowly or are shrinking, so they’re easier to spot. A true SaaS player who’s been around for a while will be both large and growing quickly.