‘SALES AS A SERVICE’ FOR SOFTWARE IN THE AGE OF CLOUD

The trend to move IT applications to cloud computing continues to build strong momentum in the IT industry. Most CIO’s have already moved workloads to the cloud or have plans to start the migration process. The consumption model of the cloud leads to a business model where ‘everything’ is delivered ‘as a Service’. We find a growing number of companies providing ‘Compute, Storage, Network, Platform, Infrastructure and Software as a Service’.

But how do these new Services find their way to customers?

Let’s look at the big cloud players first. Amazon, Microsoft and Google have been building  substantial sales structure selling their cloud services. As Amazon Web Service, Microsoft Azure and Google Cloud are the primary propositions of the Cloud Service Provider, their main sales focus is the infrastructure layer of the cloud. Similar structure can be identified for the software and applications layers.

Microsoft, Oracle, IBM, and SAP are the top employing organizations selling ‘classic’ software-licenses and integrated solutions. Following the trend of cloud computing, they have added the consumption-oriented models, known as ‘Software as a Service’.

This leads to the following questions:

1) How can smaller software companies reach their potential customer?

2) How can they reach customer outside of their home territory?

Rumours are going around that sales personnel will be obsolete in future. Customers are quicker to easily access information online before the sales expert even arrived at their door step. Let’s take example of Amazon Marketplace, that provides a large number of software applications. In a way, Amazon Marketplace is the enterprise version of the mobile phone application stores from Apple and Google.

I could not find any available data on the effectiveness of the AWS model. I have doubts, if the enterprise-class software from the application store, that are usually more complex, could be sold online. To worsen things, many application software also requires system-integration into the existing enterprise applications.

For smaller software companies to achieve global presence, it seems, they have to emulate Oracle or SAP where they took about 20-30 years to grow organically.

But is this a fascinating path for everyone?

Agility, innovation and speed are the key strength that many evolving software companies want to maintain. These organizational features are hard to find in large, global organizations.

What about emulating the cloud model where ‘everything’ can be done ‘as a Service’?

Let’s go into ‘Sales as a Service’. This term is pretty new and as of now, it is not available on Wikipedia. If we are using the term ‘Sales as a Service’ in a wider form, resellers and distributors can be considered as existing models. ‘Sales as a Service’ could be defined as an outsourced sales force that a company creates and manages without actually hiring them.

But Reseller and Channels have their limitations. Demand creation usually needs to be performed by the software company. Channel models work best in a demand fulfilment structure where the customers know what they want.  Unfortunately Channel models are less effective for products that require an active sales engagement.

We can find few companies mainly in the US, UK, Australia and India using ‘Sales as a Service’ in the header of their company profile. Though the basic concepts are similar, the actual proposition varies widely.

Some of the ‘Sales as a Service’ companies focus more on marketing which includes event management, web-presence, digital marketing and demand generation, while others focus more on the later parts of the sales process such as lead generation services, resources for inside sales and services to closing the opportunities.

The concept of ‘Sales as a Service’ is relatively new and it needs to be adapted to the cloud computing model. Based on the assumption that the apps-store concept may not work for many software solutions, there is a need for companies to identify and fill the gaps. A state-of-the-art version of ‘Sales as a Service’ is needed by companies who wish to extend their business beyond their home territory. These ‘Sales as a Service’ companies are those they can rely on, in providing them with many functions as needed in executing their marketing, sales and revenue collection processes without going through the hassle themselves.

To be continued…

Ralf Suess

Rochade Pte Ltd (Sales as a Service) – partner of the Reach Asia initiative

Singapore