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Organizing for SaaS Success: Surround the Customer

The end of products and beginning of the circular organization

For ISVs and others attempting to offer SaaS services to the market, organizational structure and approach represents one of the largest hurdles to success. In order to achieve success as a service provider, organizations must change my organizational approach from linear to circular, surrounding the customer throughout the service relationship lifecycle, reducing barriers to adoption, and ensuring long-term customer retention.

Today's typical ISV organization and its interaction with customers are linear with sporadic customer contact. Product managers may gather requirements from early or beta customers, but other than those few, the first real contact is from marketing. The customer is passed from marketing to sales. Sales implements an orchestrated sales process that, when successful, hands the customer to a services or implementation team. Once completed, the implementation team hands the customer over to the support organization. The product mindset is spikey and transaction-oriented, and the organization's linear structure is perfect to support this mindset.

Because services are about experience, to truly optimize our experience delivery, we must collapse and integrate our organization. The organization must be circular, surrounding the customer.

Sales and marketing must smoothly transition the customer to operations, which is now tightly coupled to development. Dev-Ops complements an integrated support and delivery team, which in turn integrates closely with the retention parts of sales and marketing. In this model, the customer is in continuous contact with many parts of the organization. This comes from the fundamental fact that a service is a continuous purchase and commitment, not a spikey one like a product. Sales and Marketing, Dev and Ops, and Support and Delivery must function as a tightly knit ecosystem, continuously enveloping the customer in the highest quality service delivery possible. By putting customers in the middle, the integrated service organization maximizes customer satisfaction and retention.

This is a hard transition to make; it requires executive commitment and drive, and constant attention. However, market leaders must do this or they will fundamentally remain a product company, which is the kiss of death for any SaaS provider. Marc Benioff was wrong when he said the "End of Software"; he should have said the "End of Products." Let the era of Services begin.

More Stories By Ken Rutsky

Ken Rutsky is a Product and Service Marketing Consultant, and has spent 20+ years in the industry, launching his first Internet services while at Netscape from 1995-99. Since then, he has been CMO at several start-ups and ran Network Security Marketing at McAfee. Ken launched McAfee's Secure Web Protection Service, and his time as a consultant has included the launch of Nimsoft's Nimsoft On Demand service. Today, he is laser-focused on helping ISVs and start-ups understand how to bridge from the world of products to SaaS Services with their mindset, organization and go-to-market tactics. Follow him on Twitter @jayrutz, on Linkedin at http://www.linkedin.com/in/kenrutsky, and on Facebook at http://www.facebook.com/home.php#!/pages/KJR-Associates/224894750772.

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