Startup Blog

4 Reasons Why Saas is Cool

Posted by Mike Volpe on 7/30/08 9:52 AM

Dharmesh Shah, co-founder of HubSpot, wrote an article smacking around Business Week for their opinion of Saas on his blog OnStartups.  I agree with him, and listed out my reasons in a comment.  That comment seemed worthy of a blog article here. (Disclaimer: I work at HubSpot which provides internet marketing software on a Saas basis.)

  1. Reduced IT staff required.  It is difficult and expensive for a small or medium sized company to attract and retain a good IT staff.  A company like can do this more easily.
  2. Reduced IT infrastructure required.  Why should a small company that sells real estate have to buy servers and maintain them?  It makes more sense to let your software provider do that throgh Saas.
  3. Upgrades are easy with Saas.  Have you tried to upgrade Siebel?  Yuck... both for the price and for the cost of actually doing the upgrade.  In contrast, does multiple upgrades per year, and they just happen, pretty much.  You automatically get all this cool new stuff, and you just pay the same price and do nothing to get it.
  4. Better alignment of interests.  In traditional software, you pay tons of money upfrant because a salesperson did a nice demo.  Then you are stuck with the software, if it works or not.  In Saas, you pay a little bit of money, and then you use the software.  If it does not work like it did in the demo, you can cancel and move on.  This is a huge benefit to the customer because it better aligns interests between you and the software supplier. You want the software to work, they want you to remain a customer, so they make the software work for you.

What do you think?  Is Saas Cool or Crappy?  Leave a comment.

Mike Volpe

Written by Mike Volpe

Mike Volpe is a startup advisor and angel investor based in Boston.

Topics: Saas

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