A growing number of on-premise software providers are now offering SaaS variants of the software, a recognition of the direction in which the future of the software industry is headed. I read an interesting blog today on the ZDNet blogs titled SaaS-querade: When On-Premise Vendors Try to Pass as SaaS Vendors that talks about the growing confusion being created for buyers of SaaS solutions. It gives some important pointers to picking out fakes from the real SaaS solutions.

Here's my own checklist of 4 things to look for when picking out a "SaaS fake":

1. Multi-tenancy: Simply put a vendor of an old on-premise software installs a copy of the system for the customer on a server (an "Instance") as opposed to a true SaaS solution provider who has a single instance of the application in which each customer is an account or a "tenant" (and hence multi-tenant). Why should you care as a buyer? Most of the advantages that attracted you to buying a SaaS solution tend to flow from multi-tenancy and while it may seem like a great thing to have your own copy of the software, remember it also means that you will lose out on many advantages without really gaining much.

 

2. Upgrade Frequency: A true SaaS vendor having just one version of the software to upgrade and manage does it most efficiently translating into frequent and cost-free upgrades coming your way. EmployWise for instance adds new features almost every week and charges nothing for them. An uncertain upgrade release frequency and/or charging for these is a sure sign of a fake.

 

3. Customization: This is a real twister, as a buyer you would probably be more attracted towards a vendor who offers to customize their solution for your specific requirements but this is another pointer to a probable fake. A true SaaS vendor will run one solution and not versions for different customers. This is done by either focusing on a customer segment that largely needs the same features or alternatively by engineering a high degree of configurability so that each customer can "configure" the solution as they need (EmployWise falls in this category). When they come across a new requirement, they will typically offer it as a feature enhancement and not as a paid customization.

 

4. On-Premise "and"  On-Demand: On-premise vendors seem more flexible when they offer you both options. The SaaS model means a very different business model for the vendor in terms of how the solution is developed, hosted, sold and supported. A vendor seeking to do both is going to end-up running two business models. If you are looking for a SaaS solution, look for a vendor who is committed to SaaS and will therefore bring its best to you in the way their business is organized.

It is known industry ploy for existing players to first create FUD (Fear, Uncertainty and Doubt) to put off people from trying new innovations when threatened by them and then to follow it with Confusion by joining in without changing. We are now seeing the latter phase where everything in software is being relabeled as SaaS and "Cloud Computing". So dear buyer, its tough on you but you must look under the hood.