Shelfware as-a-Service

As can be expected, HP listens to analysts’ opinions very carefully. That’s why Gartner “doom-and-gloom” view of the future of Software-as-a-Service caused several lively conversations with my colleagues at HP Software-as-a-Service. In a nutshell, Gartner predicts that Enterprise SaaS spending will not grow as quickly as originally thought because of several pain points. Gartner specifically calls out SaaS Shelfware as a growing problem – companies are paying for the services that they don’t consume, and 90% of SaaS deployments are not pay-per-use.

Some charges are fair. Our own pricing model is not pay-per-use even though we offer our customers a range of options including short term project-based solutions with very attractive price points. By the way, I think that experiences of cell phone providers show that pay-per-use pricing models can be very unattractive for high volume customers who are “always on”. In our experience enterprise customers tend to fall into this category. But the whole reason for HP SaaS existence is a mission to end shelfware problem for enterprise customers. That’s why we assign a named Technical Account Manager to every account, and this person’s performance is measured on the customers’ adoption of what they purchased. Why is it important to us? Because ten years of experience have shown that companies who adopt software end up renewing their subscriptions and buying more services. They feel that HP is not just a software vendor, but a trusted partner invested in their business outcomes.

I want to paraphrase Mark Twain and say that the rumors of SaaS death have been greatly exaggerated. In fact Enterprise SaaS is just now being born. Going forward, we definitely see Enterprise SaaS changing and evolving into a category of its own, and we at HP plan to be there to lead the charge, and you can expect to see more posts from me on the future of Enterprise SaaS on this blog.

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