Someone asked me the other day if I thought that SaaS had “crossed the chasm” in light of the news that SuccessFactors had signed a 2.1 million seat deal with an unnamed client.
This got me thinking about the conditions for widespread adoption (“crossing the chasm”) of any new or innovative technology. While Geoffrey Moore shared many of his own observations about these catalysts in his 1991 (yes 19 years ago!) book "Crossing the Chasm" , I believe they can be summed up in three words: Cost; Complexity; and Confidence.
While people say that cost is always an issue, it’s important to distinguish between the cost of acquisition pure and simple and all the operational and organizational costs associated with switching from one technology to another. Moreover, once the technology is installed, you have to run it into the future which means you also have to take long-term costs into consideration.
When it comes to allaying concerns about cost, the burden is on the vendor to educate the customer as to the value of the expenditure. The usual approach is to focus on benefits, but I think it goes beyond that. Sure, the new stuff might be better than the old stuff, but if you can run your business successfully on the old stuff, who cares? When I hear cost as an objection, I really think it's a comment about value.
The real tipping point is“opportunity cost”. As soon as adoption gives you a competitive advantage (or failure to adopt puts you at a disadvantage), adoption becomes a question of “when” not “if.”
The ease or difficulty of integrating a new technology into your existing infrastructure presents another obstacle to adoption. If it’s too complicated, and the value isn’t readily apparent, people just won’t do it.
For a while now, virtualization has seemingly offered a technical solution around this obstacle by promoting new levels of interoperability. SaaS applications (models) propose to take such ease of implementation to a whole new level since all they require is a browser and access to the web.
But this ease of access brings with it issues of security, regulatory compliance, and governance that can be even more complicated and challenging than the technology. What’s interesting about the rise of these “as-a-service” technologies is that they are often adopted from the ground up without a top-level strategy. This means that adoption can occur in spite of the organizational complexities (making the question of managing adoption even more important than the question of whether to adopt or not).
Because IT plays such a critical role in their operations, many business leaders are understandably cautious about introducing new technologies. If they aren’t confident that it’s reliable and, above all else, secure, it’s a non-starter.
Of course, confidence is about more than firewalls and encryption. Before entrusting data, not to mention core business functions to a new technology, customers need a level of confidence in the technology’s long-term viability. To gauge that viability, they will look beyond particular vendors to consider the broader eco-system. A growing community of innovators and supporters builds confidence; it’s absence undermines it.
This question of community highlights another dimension of confidence: openness. Today, organizations are drawn to technologies that promote openness at all levels and are suspicious of those that cling to closed or limited proprietary models. Companies need flexibility to survive and are less and less willing to tolerate anything that seems like it’s going to lock them in.
Are there first among equals in these three C's? Cost and complexity may be table stakes for vendors but addressing issues of confidence seems to increasingly be the deciding factor.
What do you think?