SaaS Maturing from Displacement to Disruption!
Where to Next for Industrial SaaS Software?
These are some of our recent online and mobile solutions (these 3 were built by TopSpot utilizing CDS software). They are right up-to-date SaaS solutions. However, a decade ago, SaaS products for industrial suppliers were often viewed as cheaper, even inferior products to on-premise client/server products which had been through more version releases and longer development. But today, SaaS has matured and SaaS companies generate upwards of 15% of their software revenue displacing their older competitors with better ROI and functionality. So where are SaaS products going next?
Tomasz Tunguz, a venture capitalist at Redpoint, recently published an interesting post, The Next Big Shift In SaaS about "the evolution from software as a service as a displacer to a disruptor." His key point is that displacement solutions compete with incumbents on the same buying parameters but disruption solutions change the way a buyer thinks about solving their need.
Most SaaS products today are 'displacers', for example, SaaS Customer Relationship Management (CRM) systems such as Salesforce displacing on-premise CRM such as Siebel. "The next shift in SaaS will see startups leverage their workflow roots into disrupting systems of record by changing the buying process." Tomasz gives examples in his post.
Here's our take for Industrial Suppliers:
We agree SaaS developments are producing disruptive solutions that add more value (and higher ROI) for customers. Since Tomasz uses CRM as an example here's another possibly disruptive approach in the CRM world. Microsoft just paid $26.2B for LinkedIn:.
- Why did they do that? The simple answer is, “for the data”. LinkedIn currently has 433M users and 33M companies maintaining their data up-to-date themselves.
- How might they use it? In CRM, Microsoft’s product is called ‘Microsoft Dynamics’ and it has the 4th highest CRM market share at 6% (Salesforce leads at 12%). All CRM systems are initially empty databases and it can be hard to get sales teams to populate and maintain them. Microsoft could perhaps automatically populate their CRM from LinkedIn and either keep that capability as an exclusive ‘business advantage’ or charge other CRM vendors a toll to do the same (who wants to be the ‘empty’ CRM database?). In the latter case, that toll will add a cost advantage to Microsoft…Either way it could be disruptive to the CRM market, the workflow of CRM users and the way CRM systems are bought and sold.
Turning to the industrial space we think industrial CAD model downloads solutions are already disruptive there! For more than a decade we've been developing our disruptive SaaS Catalog, Configurator and CAD Download software and integrating it with other solutions including CRM (for the customer data and account ownership), ERP (for B2B pricing, inventory availability, order history) and eCommerce (online, mobile and native mobile ordering).
- Industrial product designers are deciding that the fastest way to model something is to download it
- They search online and if they find the right part and CAD model of it, they download the CAD model and include it in their CAD design
- Designers save time, your product gets 'locked and loaded' into a new design
- The CAD model download alerts you to the potential start of a new design that could include one of your products. Astute and timely followup by your sales team can ensure and even expand that opportunity.
- When that new design is approved Buyers find the part number and supplier reference in the design or the Bill of Materials (BOM) and order the part - rarely do Buyers challenge or change what the Designer has spec'd in!
Bottom Line: This new process is very disruptive to the industrial market, it has changed the workflow of Designers and Buyers and the way industrial component and parts are found, selected, bought and sold. If you aren't yet using this technology to disrupt your market segment/s give us a call to discuss how effective and inexpensive a SaaS Disruptive Solution could be for you, click on either button or add a comment below.
UPDATE: 12/8/2016 Microsoft/LinkedIn deal closes - Microsoft confirms integration with Dynamics CRM and lists other planned software integrations.