?? It's hard to step outside these days without bumping into a VC (vest and all) raving about how AI will flip the script from Software-as-a-Service (SaaS) to Service-as-Software (SaS). Guilty as charged—Pruven Capital included!
Seriously though, as we meet more founders diving into the Service-as-Software (SaS) space, it's becoming clear that building a SaS company demands far more strategic planning than simply launching a cloud-native version of on-prem software like we saw with SaaS (okay, I’m oversimplifying a bit). Most successful SaaS companies—exceptions aside—began by catering to SMBs before scaling up to enterprises. While SaaS companies had to add features that enterprises care about, their core product largely stayed the same.
SaS companies will also need to start by serving SMB customers. But when it comes to breaking into the enterprise market, they’ll have no choice but to go head-to-head with System Integrators like Accenture, Deloitte, Tata Consultancy Services, Infosys, and Wipro. These SIs do hundreds of millions in business with large enterprises—including our own corporate partners—so competing with them won't be for the faint of heart. SaaS companies haven't traditionally needed to work with or compete against SIs, so this is definitely uncharted territory!
Here's how we at Pruven Capital believe SaS companies can succeed in selling to enterprises:
1. Choose the Right Problem:?Start by identifying a problem that can be neatly separated from what System Integrators (SIs) handle for enterprises. SI projects are complex and interconnected, so the key is to find an issue that’s more self-contained.
2. Embrace Your Services Role:?Accept that you’ll be a services company for your customers. Sure, your services will be powered by software, offering better customer experiences at a lower cost. But from day one, you need to hire a services team and have them "dogfood" your product while serving customers. This is crucial for improving your product and avoiding the need to scale your services team as you grow.
3. Be Strategic in Your Go-to-Market:?Resist the urge to partner with SIs just because they have customer access. Remember, you might end up competing against them. Instead, target areas where large enterprises have in-house teams working closely with SIs and approach those teams directly. If you deliver higher value at a lower cost, the in-house team will have every reason to replace the SI with you. Once you’ve secured several enterprise clients directly, you’ll be in a much stronger position to consider partnerships with SIs—if you need to at all.
4. Respect the SIs:?Don’t underestimate them. It’s easy to fall into that trap, but the deep relationships SIs have built with large enterprises over decades are their real stronghold. While the problem you’re tackling will inevitably overlap with what SIs are hired for, play nice (until you no longer have to).
