Stickiness of SaaS/On Demand

Maybe it is just me, but I’ve never understood the idea that SaaS/On Demand applications could be simultaneously sticky and consumable.  It seems to me that processes/process steps that can be consumed — purchased and used only as needed — won’t likely have all that much “stickiness” — hard to replace/move away from. 

This issue came up again in the commentary around NetSuite’s Q4 release.  Sramana Mitra notes (here) that N has stopped giving visibility into its churn metrics (noted here), which metrics should give some insight into stickiness.  She then discounts any concern about stickiness by analysts (noted here), by posing the question:

Why would a company, once in, want to switch its ERP system?

I doubt if that’s the real churn issue here, switching.  It seems more likely that SMEs would simply stop using NetSuite if they found little value.   Also, I’m not sure that NetSuite becomes the ERP system, at least not at first.  Implementing quickly has its advantages, but deep integration into a firm’s way of working is not necessarily one of them. 

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2 Responses

  1. […] who believe that the SaaS/On Demand players would somehow be recession-proof (read my earlier rant here).  There’s a lot about the business model that’s compelling, but not […]

  2. […] And I sure have my doubts that on demand/SaaS will “immamentize the eschaton” as well (here, here, […]

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