The True Value of SaaS and Managed Service Offerings
At first blush, one might believe that Wall Street values subscription revenue over one-time revenue—and truth be told, they do. Why? Because it’s a hell of a lot more predictable revenue stream for a company to manage than ad hoc revenue. I get that, but the gap is still too big for what, in reality, is simply financing.
Then it hit me. The big SaaS guys have one very special secret weapon in common: They have all the data. Salesforce has not only all of your customer data, but also all of your company employees’ data—it knows who does what, when, and how. Therefore, Salesforce can run analytics across its data population and be prescriptive. It can tell you that you are using things right, or wrong. It knows that your peers are using its service more effectively than you are and can suggest things to help you improve. It knows that no one ever uses a certain feature, so it can eliminate that feature—or that only companies in some specific segment of the market use another feature, so they can make sure it shows up on your dashboard if you are in that segment.
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