Tuesday, December 04, 2007

A new wrinkle on SaaS

Salesforce announced an interesting new capability to facilitate the sharing of specific types of information between different SFDC subscribers. An early example would include something like sales leads. So, for example if one SFDC customer sells a complementary product to another SFDC customer, they can share information like leads among one another.

This is in retrospect a pretty obvious capability for an enterprise SaaS vendor and I'm a little surprised that no one has thought of it before. While SaaS has cost efficiencies for the vendor, I think it's been a struggle to say that SaaS itself provides competitive advantage for a software vendor. But this is something that would be difficult for on-premise vendors to replicate: an application network effect that's could be genuinely beneficial to the user. The consumer web companies have all figured this out some time ago, perhaps because consumers are more fickle than enterprises.

In the case of Salesforce, I doubt it the feature will be very utilized as few companies share leads frequently enough to make this an often-used feature. It feels a bit forced and after the thought. But it does spark some thought as to what the next generation of SaaS vendors may portend. They say that with every architectural shift, the first generation of new companies uses the new architecture to ape the old paradigm. But the second generation uses the new architecture to accomplish something truly novel.

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