Consumers are responding to data overload by turning to online content management services. The success of tools like Dropbox and Evernote is largely attributed to their distribution via the software-as-a-service business (SaaS) model, which leads to the following question:
Is the enterprise community, especially small and medium businesses, (SMBs) ready to adopt a SaaS model for their content management?
In our opinion, the simple answer is yes.
Web Tools Make their Way into SMBs Workflow
Consumers subscribed to SaaS companies are the ones working for enterprises. To borrow a phrase from Mitt Romney -- "Corporations are people." While this statement is largely regarded as a campaign gaffe, consumers have validated the use of SaaS and are open to implementing this model within their enterprise.
SaaS-based content management system (CMS) enables SMBs to come to their bigger competitors’ playground as equals. When deciding between CMS software options, SMBs should consider building their intranet capabilities with a complete services suite such as document and media management, file sharing capabilities, social collaboration tools (blogs, announcements, membership directories, etc.) and more.
The end result is a corporate intranet web solution that seamlessly brings order to an organization while keeping their clients, partners and customers engaged.
Loving SaaS CMS: A Provider’s Point of View
1. Ideal Choice for SMBS
It is estimated that 34% of SMBs (1-500 employees) will switch their CMS software or be first time adopters. These new clients are willing to spend an average of US$ 500 per month on CMS software, placing the value of this market in the U.S./Canada at over US$ 14 bn. This presents a tremendous opportunity for SaaS CMS providers to grab shares in this market which have historically been ignored for the sake of serving large enterprises.
2. Economy of Scale
In many cases, sales representatives are not necessary and when needed, a sales team can be scaled according to business growth. A SaaS model also avoids the need to build multiple versions of client software. As a result, sale cycles are more dynamic and spread throughout the calendar year as opposed to quarter-end restrictions.
3. Higher Company Valuation
Once a predicted customer value is established, new customer acquisition strategies developed, and drop-off rates stabilized, revenue streams will be predictable. As a result of this "certainty premium," SaaS public companies generally trade at higher prices / multiples than traditional software companies.
4. SAAS is Everywhere
SaaS is prevalent in every product category from CRM, email, web design and blogging to a host of others. Virtually all products can be sold as a service. The SaaS market is huge and is currently estimated to be worth US$ 21 bn, growing at 21% annually.
What to Love About SaaS CMS: SMBs Point of View
SaaS allows features to be added according to changing business needs. It offers a quick and powerful path to share and organize documents.
2. Predicted Expenses
Most SaaS price structures are based on a two or three axis, offering simple plans and options for SMBs. Some CMS providers allow for customization to an already purchased package. The pre-arranged rate gives a fixed monthly expense, which provides better financial projections.
3. Stay Small and Lean but Punch Over Your Weight
With SaaS implemented, your business no longer needs permanent IT staff. You can focus your resources on hiring effective people for your organization and ensure your core message is going out.
4. Focus on Your Core Business
With SaaS, SMBs avoid the hassle of web hosting, patches, fixes, software updates and numerous other technical problems. However, SMBs should perform due diligence to select CMS providers who actually update and refine their software versus those who claim to do so.
This is probably one of the key features for SaaS -- expenditure and technical needs will change with business growth and a SaaS model allows SMBs’ software to scale accordingly.
6. Access and Security
One of most contested points, security concerns, are often an obstacle for SaaS adoption. In reality, the easy accessibility and stringent security offered by most CMS providers probably exceeds measures employed by SMBs. Still, SMBs should carry out due diligence to ensure their Web CMS provider satisfies all security requirements and concerns.
The SaaS model is proliferating into many services and CMS is no exception. However, when considering a SaaS model, the client and the provider need to determine a model’s true suitability. Our opinion is that SaaS ought to be the preferred business model for early stage CMS companies serving SMBs.
Title Image courtesy of Nomad_Soul (Shutterstock).
Editor's Note: You may also be interested in reading: