Why small businesses SaaS solutions should be the cloud platform of choice.
The cloud-computing segment is still immature but slowly maturing, which is providing us with an ability to predict the winners and losers. In general terms there are three types of cloud platforms: software as a service (SaaS); platform as a service (PaaS); and infrastructure as a service (IaaS).
For small and mid-sized businesses (SMBs) SaaS solutions should be the cloud platform of choice. While the number of SaaS applications will expand but within each sector, one should expect consolidation. Business and IT executives need to use the cloud as a way to gain a competitive advantage, not just a less-expense way to do business.
There are a number of shifts that are occurring in the cloud market that portend where things will be going over the next five years. According to a Cisco Systems Inc. study 30 percent of cloud workloads are in public data centers but by 2019 that number is expected to be 56 percent.
Hence, more and more companies are moving away from their own internal private cloud networks to public clouds. Moreover, within five years the SaaS market will grow to 59 percent of all cloud workloads. IaaS workloads will shrink to 30 percent and PaaS workloads decline to 11 percent.
For SMBs it makes sense to move as much as possible to public clouds and get out of the data center business. That said one should not view the shift as purely a cost-savings opportunity. The real value of moving to external clouds is the potential for additional revenues.
The key to future customer loyalty and incremental revenues is mass personalization – i.e., the custom tailoring of digital interactions in accordance with user preferences and tastes. Thus, it is not good enough to attach upsell marketing promotions based on generalities – instead, the push to the individuals needs to be custom tailored for each person. And to do that will require use of real-time analytics imbedded in the transaction stream.
SaaS buyers should be looking for applications that have the added mass personalization capabilities. Not all of them do that. On the market today are two categories of SaaS applications: business-as-usual (BAU) applications that are like the old data center applications but run in the cloud, with possibly enhanced features; and applications that have been architected to incorporate the analytics required for mass personalization.
Executives should be utilizing the latter type so that they can engage customers and prospects digitally with information specifically targeted with content meaningful to the reader.
Additionally executives should be looking for SaaS tools that provide them with detailed analytics on buyers, prospects, and viewers so that there can be a better understanding of the individuals that buy or follow company products and services. This data can be used to enhance the marketing messages and offerings so that the percent of those buying and the purchase value of each sale increases.
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About the author
Mr. Braunstein serves as Chairman/CEO and Executive Director of Research at the Robert Frances Group (RFG). In addition to his corporate role, he helps his clients wrestle with a range of business, management, regulatory, and technology issues.
He has deep and broad experience in business strategy management, business process management, enterprise systems architecture, financing, mission-critical systems, project and portfolio management, procurement, risk management, sustainability, and vendor management. Cal also chaired a Business Operational Risk Council whose membership consisted of a number of top global financial institutions.