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Transform your SaaS into a Web 2.0 business

Quiz: What is the most successful enterprise SaaS application to date?
Hint: It’s not Salesforce.com

It is ironic, but the unfortunate fact is that most SaaS vendors see the Web as little more than the browser through which they deliver an enterprise software application. In fact, the phrase itself software-as-a-service, creates a subtle bias toward viewing the business as simply a piece of traditional software delivered on-demand over a network. Connecting an application to the Web unleashes disruptive economic forces that go far beyond multi-tenant architecture and reduced TCO. It enables viral organic growth, low cost customer acquisition, business productivity gains across-the-firewall, and new monetization models to augment simple license subscription. That is why the most creative SaaS vendors are realizing that the real opportunities for business innovation lie outside the firewall and are transforming their SaaS offerings into Web 2.0 businesses.

Below is a list of principles that can help you transform your low-cost, commodity SaaS into a high-value Web-based business.

Accelerate organic growth

  • Master “free” online marketing tactics
  • Streamline and automate the entire customer life-cycle

Reach out and become a hub on the Web

  • Links, links, links
  • Encourage community

Build the business into the product

  • Automate the customer lifecycle
  • Crowd-source new capabilities

Reach across the firewall to unleash disruptive economic forces

  • Re-engineer external processes
  • Integrate through the cloud

Monetize creatively

  • Leverage the network
  • Look beyond subscriptions

After I’ve had a chance to elaborate on each of these ideas in a separate post, I’ll provide the answer to my somewhat trick question above.  However, I’m hoping that the solution will emerge as obvious.

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