The ‘With’ Software Company

Roza Agecoutay Blog, Business Insights, Freight Broker, Trucking

A woman using Tailwind Transportation Software

 

Tailwind Transportation Software

It become clear to me years ago that one of the biggest distinctions in life is doing things ‘with’ someone versus doing something ‘to’ someone.

That learning was formed at a young age playing sports – primarily hockey – where it became evident that when the team took responsibility for its results and its destiny, and did not outsource that responsibility to the coach, we would be successful.

There is perhaps no better way to outline the difference between a Software-as-a-Service software business and a Client-Server software business than to explore how it does things ‘with’ a customer versus doing things ‘to’ a customer.

Try before you buy

By offering a customer the ability to try something before they buy is one of the fundamental tenets of software-as-a-service (SaaS). You don’t have some salesperson trying to describe the application. You don’t have a person giving you a demo of what it ‘could’ work like. The customer gets to use the application and apply it to their own specific business circumstance before the purchase.

Pricing

Software-as-a-service applications invariably offer a transparent and public pricing structure. So many client server applications require large investments up front, not only for client-server licenses, but also for the installation and customization. While it may be a service to some customers, in many cases the software itself requires the insight and services of the provider to work in the customer’s environment. Its utility and benefit drive to the supplier’s need for success, not the customer’s need for ease of use.  So, not only have you bought a bunch of licenses, but you have tied yourself to a group of people that are the only ones that can help you use it.

And with no public pricing then you will always wonder, ‘am I getting the best deal?’ Or is my price being driven by the sales commission target of the salesperson? Publicly publishing a price puts the power in the hands of the consumer – helping them understand the entire scope of their investment.

Maintenance Fees

Gone are the days of full releases of some new version of the software every three years. For years people buying transportation management software paid annual maintenance fees which covered the cost of support and protection for getting the next version of the software.

In the software-as-a-service model, the application is being upgraded and improved constantly. Within the first 14-months of launching our web-based Tailwind TMS we made over 100 improvements to the system – seven per month on average – and we continue to make them according to customer and trialer feedback. Compared to the client-server environment, the cycle time from customer suggestion to the launch of a new and improved feature is significantly shorter. SaaS improves much more quickly based on its symbiotic relationship with its users.  And it makes perfect sense, since the software must ‘earn its keep’ each month. It’s not like making an investment of scores of thousands of dollars in a client-server based TMS, only to find out that it really doesn’t work for your business.

The ‘Door’ is Open 24/7

With a SaaS application you can access it anywhere and anytime you have access to the Internet. Additionally, there are online videos and documents that can help you use the system. You don’t have to wait until your office is open to get to a desktop computer to access some information. Now if you had to get up in the middle of the night to help one of your drivers stranded on the side of a highway, you don’t have to make your way into the office and wait until the customer support team got in to solve a minor challenge that you are having with the software.

Adjusting to your Seasonal Cycles and Business Fluctuations

A pejorative term for client-server software is ‘ShelfWare’. If you looked around your business in the 80’s, 90’s and into the early 2000’s you would find – and probably will still find today – a lot of ShelfWare. The term ‘ShelfWare’ came from the boxes of software that would sit on the shelf in some IT office, not being implemented or used. And while most licenses are rendered electronically these days – the keys that unlock your access to it because it is already there – there are still a lot of excess licenses just lying around a business not being used.

But your business doesn’t really run like that. There are times when you are busy and times when you are not. There are times when you are growing, and times when you are running level, or other times, unfortunately, when you run leaner. But your client-server software provider doesn’t have a model to handle those circumstances. While you can adjust your subscriptions – you can’t exactly sell back your licenses to your software provider. They are yours to keep and (pay maintenance on!).

It Has Better Cancellability

Yep, I said it. You bet I did.

Hey, things don’t always work out and you may need to move in a different direction. Unforeseen circumstances occur in business. You may run into a situation where you can’t continue using the software. In the client-server context that is a tough thing to swallow when you may have just put thousands and thousands of dollars into purchasing licenses of a software, only to find out that one year later you have close your business. Resell them? Highly unlikely.

While you save on your maintenance payment, you now are the owner of some inert application code that can’t help anyone, but you sunk a lot of money into it, and probably some big installation fees as sunk costs as well.

While the ‘software-as-a-service’ model continues to gain traction in the transportation management software market there are many good reasons why it has taken hold in other industries. Some of the reasons can be found in the reasons I cite above.

At Tailwind Transportation Software our mantra is that we do things ‘with’ people, not ‘to’ people. It is that very collaboration that is vital to our business success – to the success of any software-as-a-service business.

When someone is paying you month to month for your software service, there is no other way.

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