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SaaS: The End oF Maintenance Fees
Salesforce.com has long used the slogan: “the end of software”. Now Salesforce CEO Marc Benioff is calling for “an end to maintenance fees”.
While the idea is similar to their longstanding slogan, the emphasis may be changing slightly in Salesforce’s attack on the sales model of traditional software.
IDG news service reports that Benioff wrote in an internal company memo, describing a customer that : “currently uses Siebel software to run her call center. She pays more than $15 million a year for the privilege of having to implement the updates that Siebel sends her. That does not include backup. Or disaster recovery. And of course, it does not guarantee that she will be using the latest technology. The maintenance agreement only assures her that her outdated software will continue to work.”
Benioff’s remarks come on the heels of SAP’s announcement to raise maintenance fees and Oracle’s end of the fiscal year attempt to renew contracts.
The SaaS model which Salesforce.com has pioneered and perfected can be very attractive to many companies, but every company situation will be different, and which model is the better choice is one that needs to be carefully studied. There is no guarantee that SaaS software will be better or more innovative than software delivered via a traditional sales model.
The PC World article quotes Ray Wang of Forrester Research as saying that choosing between SaaS and non-SaaS is “really a lifestyle decision”.
