At the moment of creation, 4 years ago, our company understood its purpose: we simplify the use of SaaS for small businesses. And although the initial business model was chosen incorrectly, all this time we have been in permanent search for our own niche. We caught a surge in cloud services in Russia, saw a recession and see the second rise starting. The specifics of our business in combining SaaS-products. And we see our leading SaaS companies putting their own sticks in the wheels of their own market.

SaaS developers are trying hard to sell value products as massive

SaaS does not determine the approach to building a business, but characterizes the way software is delivered. The fact that SaaS refers to both unambiguous appy (for example, Google Keep), and complex products (for example, Salesforce Sales Cloud), creates some confusion. When SaaS was considered as a promising business in Russia, two contradictory ideas took root. On the one hand, SaaS has become synonymous with a product for mass sales, on the other hand, the products created are focused exclusively on business.

An example to follow was considered the company 37signals (now - Basecamp). The staff consisted of 18 employees, and the company's product — a project management service — was used by 2 million customers. Perfect SaaS: a large number of customers gives a large revenue, the effect of scale allows you to save on infrastructure and specialists. This impressive example inspired developers to concentrate on the product and to avoid expensive offline activities as much as possible. The chosen approach was also confirmed by Evernote, Dropbox and Gmail, which grew precisely as mass products.

At the same time, the founders created B2B services based on two theses:

1. neither individuals nor businesses have yet become accustomed to SaaS, but the latter at least have money;
2. Russian business will certainly need a tool to automate workflows.

The second thesis was supported by the experience in IT outsourcing, where the process approaches of Western companies became a revelation (and at the same time the answer to the question of why "they have there" clean sidewalks and everyone smiles).
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It turns out that the developers created the services that organize the company's business processes, which means that they are claiming to change the established foundations, but at the same time sought to exclude offline activities. A complex business software product is a value proposition that, in addition to complex sales, implies a complex implementation and selling it as a mass product is incorrect. This thought still remains in the background. Developers are expecting quick conclusions from customers, turning their websites into similarity of landing pages (for example, Megaplan), and their telephone operators still deny the need for implementation (for example, MoiSklad).

When customers are encouraged to make an impulsive decision that will significantly affect the life of the company, they will naturally have a stupor. To understand its causes, you need to think broader and doubt the truth of the original theses. Eliminated stupor by optimizing sales and marketing, concentrating on this effort. Gut sensing the need for offline customer service, Megaplan has spurred a telephone sales department. Various tricks with a subscription were invented: “Elba” replaced the monthly period with an annual one - so that people could appreciate and “sit down”, “Business Environment” signed clients with invisible points in the questionnaires for banking services. Simplified registration and payment functionality. Powerful mechanisms like automatically optimized contextual advertising, retargeting and A / B testing were used. Today, livebie and colbekhunters are in fashion, catching the bored and the weak. The databases of the oldest services like “Bitrix24” and “Megaplan” contain millions of inactive clients, and these are those clients whose hopes were not realized.

Interestingly, in-depth study of sales methods has transformed from some of the founders into a missionary identity: “Businessmen do not buy my CRM because they do not know how to sell and do business,” they conclude and selflessly begin to “teach birds to fly.” Businessmen were, are and will be, and lack of interest in CRM is an indicator that there is something more important for their business.

Today, connecting to wi-fi, it's hard not to plunge into someone's sales funnel. Registration and payment scenarios in services are extremely optimized. These steps take no more than 4 minutes. Then the client, having tapped into the system, with a high degree of probability becomes a dead lead.

A complex business software product is a value proposition that, in addition to complex sales, implies a complex implementation and selling it as a mass product is incorrect.

SaaS developers oppress integrators and do not leave them a place in the customers' worldview.

Confusion with self-determination SaaS affected the work with integrators. I call integrators system integrators well known to the corporate world. In the SaaS world, the concept of an integrator is blurry, they are simpler (because they are often provincial hipster web designers), and they are called partners.

Despite the fact that SaaS companies position their products as something that does not require IT specialists, installation and configuration, it’s not always possible to completely ignore the complexity of implementation. The Salesforce experience is well known to our players, so affiliate programs were created in an attempt to throw individual fuss with the client on the shoulders of someone else.

But there are some features in the way service creators build their affiliate business:

1. Service developers present their product to customers as a ready-made solution that does not require implementation, and by doing so mislead customers. There are no integrators in the customer worldview. And although we see the “Partners” section on almost every site, and applications can be left there, service development companies do not give customers a clear signal that these partners are needed.
2. First of all, service developers are trying to sell a subscription from themselves. In other words, they compete with those who agreed to do the difficult and expensive offline work instead. These SaaS companies are like young managers who are torn between wanting to delegate authority and the fear of losing power, end up putting questions on themselves and slow down the overall process.
3. Even if service developers realize the role of partners, they exclude the existence of integrators as a class, implying that their partners are only their partners. This leads clients away from the idea that integrators could select optimal services for clients and act as service integrators among themselves.

Thus, SaaS companies understand the win-win strategy so that both win must belong to them. Partners play the role of loyal dogs, which, if lucky, sometimes the application drops from the master's table. And this is not quite ethically correct strategy today is the norm.

Creators of services compete with those who agreed to do difficult and expensive offline work instead.

SaaS developers do not consider integration as the main user functionality.

I have been integrating services for the past 8 years. First, for Sesame Communications, where we supported integration with 22 systems called the Practice Management System (abbreviated PMS). A sad joke went on the sidelines: “All problems from PMS” - these systems were usually updated without warning, so errors were often detected by the client itself (worse than ever!). Then we integrated almost twenty Russian SaaS products into Startpack and made some discoveries for ourselves.

To begin with, the presence of the API in most cases is due to the concern for the architecture, this allows you to take business logic to a separate layer, and from above to choose any user interface - web, mobile application, automated tests. Techies do API primarily for themselves (and just because it's cool). About clients are not talking.

When there are two groups of techies, in 10 cases out of 10 there is dislike between them. The phenomenon was described back in 1961 by sociologist Muzafer Sherif, who found out that in order to create hostility it is enough to divide people into separate rooms and give each group its proud name. The mistake of SaaS company executives is that such friction is ignored, and sometimes even encouraged. The result is a business process, devoid of responsible persons, and the study of bugs begins with the words "Again, these villains ...". The client, faced with a nontrivial integration error, most likely will not find someone who will accompany him.

Integration requires a special workflow from the company that goes beyond the company itself. Without this, the integration between developing software products is fragile and unreliable - even if you observe the laws of honor, covered the software interface with automatic tests and after each delivery check the integration on the combat server, no one guarantees that your partner does the same.

In addition, when the service has an API, the company is glad that now complex tasks are solved by waving the specification in the air. Developers get frustrated when the API doesn’t coincide with someone else’s, and they are extremely reluctant to adjust to “those villains” (who are “so stupid that they use SOAP, and not REST”). Therefore, when a client asks for a non-standard solution, such as integration with an ACS, the manager “decides the question” by sending a specification, which does not give the client (furniture manufacturer, for example) anything but conflicting feelings. The advice to contact the integrator is perceived with distrust, because the developers have done everything to integrators in the customer’s worldview.

Despite the desire of services for integration extensibility through marketplaces (“Bitrix24”) and special sections (amoCRM), in general, communications between services are not considered as full-fledged user scenarios that require optimization, responsible persons and support. In this area, could have boiled life, creating a variety of ecosystems and satisfying any tangible demand, but services neglect this layer of user needs.

The advice to contact the integrator is perceived by the user company with distrust, because the developers have done everything to ensure that there are no integrators in the customer’s worldview.

SaaS developers ignore customer base fear

Every day I communicate with one of the users of our service for the selection of cloud applications. The overwhelming majority of stories comes down to two types:

1. “We found out about such a product, paid the money, but did not understand it and left it”;
2. “I’m a manager, I’ve been postponing a decision on a SaaS product for a month now because I’m afraid to miscalculate.”

Let's talk about the second type. If IaaS and PaaS do not worry about the backup and migration issue - system images and dumps are easily saved, copied and deployed elsewhere, this issue is the main concern in SaaS. In the Megaplan report “The potential of the SaaS / B2B market in Russia” (2013), respondents who understand the value of online services, cited the following reasons for not using SaaS: 27% fear of losing data, 26% fear of losing access. 53% of the natural mistrust, which are interpreted by developers as "ignorance", "prejudice" and "delusions"!

Let's be frank: when a customer subscribes to SaaS for a business, it’s not the same as paying for the Internet. He acquires an asset that requires an investment in the form of payment of a subscription and time spent on the study and implementation. Investments should pay for themselves, dividends should grow, the risk of losing investments should be minimal. Translated into everyday cloudy language, the client is ready to subscribe if he is confident that the service will benefit, that the benefit will be maximum (the service will become the flagship) and that the developer company will not close. And if deposits in a bank are somehow protected by the state, no one here gives any guarantees.

Entrepreneurs are not fools. Choosing a service, they intuitively evaluate it as an asset. They are not impressed with gibberish about RAID and Tier III data center. Deep down, they want to get an answer to the question: “I’ll give my company service to you, and what happens if your company closes?” In terms of an asset, the characteristic of liquidity is the ability to quickly and without loss find a replacement.

And here SaaS-companies have nothing to answer. It is impossible to quickly and losslessly copy a project from the “PlanFix” system, for example, to WireCRM, you cannot just transfer accounting from “MyDeal” to “Sky”. Moreover, the SaaS companies surreptitiously consider this to be part of their strategy: they say, we are not like that, this is SaaS. Freemium-models of Evernote and Google "Sit down for free, pay when you can’t get down" - an ideal to which the developers of services tend in different variations. The only answer to the client's concerns “Everything is secure with us” simply means that the liquidity of the asset is zero.

Remember the law on the abolition of mobile slavery. Phone number intolerance overwhelmed the competition, leaving customers hostage to the operator. Now we are witnessing cloud slavery: SaaS companies turn away customers, ignoring their main fear.

Now we are all witnesses of cloud slavery: SaaS companies turn away customers, ignoring their most important fear.

How to stop slowing down the market

SaaS developers oppose themselves to the vertical in the corporate sector “vendor - system integrator - customer”. In one of the interviews, Alexander Prozorov (at that time, the director for work with partners of Megaplan) even emphasizes that SaaS clearly lacks a conflict of interest between the system integrator and the customer, believing that SaaS is not just a one-time use some service, and based on long-term cooperation the interaction between the supplier and the consumer. In practice, we see the opposite.

Let's look at the structure of the tourism business in Russia. The tour operator creates a mass product, and the travel agent finds a personal approach to the client. The tour operator solves the technical problems of creating a product, uses the effect of mass, optimizes costs. Travel agent helps the client to choose the appropriate product, takes care of the design, accompanies, removes fears and doubts.

Tour operators treat travel agents with respect, calling them “our all”, they do not compete with them and do not inspire the client to think that the tour is good in itself and the travel agent is not needed. Until 2010, it was impossible to buy a tour on the operator’s website, and even now direct purchase of a tour from the operator does not provide financial advantages. Tour operators do not crush the agency for themselves, they respect the opportunity to choose any optimal tour. This gives the market the necessary diversity, fills empty niches, removes mistrust.

Just think, all the SaaS problems described could be solved by integrators if SaaS companies treated them the way tour operators treat travel agents. Integrators can select the best products, can implement products on the ground, helping to translate business processes, removing hindrances and advising. They can integrate and accompany them on demand. Integrators can capture the main fear of customers by resolving migration and backups in SaaS. In the end, in these areas, they can create perfectly debugged automatic mechanisms. All that is needed is to stop pretending that integrators are not needed for SaaS.

We have created an amazing world where it is considered normal to pay for refilling an office cartridge, for assembling furniture or taking out trash, but it’s customary to spend a crazy amount of time to choose SaaS products, understand them and try to project them on the company's activities.

Innovative customers have already tried existing services. Impressive clients, captured by massive marketing, have already paid the money. The time of the pragmatists is coming. Our businessmen trust people. Businessmen need long-term relationships with decision-makers, with those who know how and love to work with a client offline, for whom the word “service” is not an empty sound. And this new driver will be integrators. The sooner the SaaS developers understand this, the faster the new cloud renaissance in Russia will come.

All the SaaS problems described could be solved by integrators if SaaS companies treated them the way tour operators treat travel agents.

Published in the journal In Oblake.RF №3

Speaker: Alexey Fedorov, CEO of Startpack

The third issue of the magazine "In Oblake.RF" is already available for free download to mobile devices in the AppStore and Google Play .