The Next Evolution of SaaS?

In today's harsh economic environment, companies are looking for virtually any excuse to forgo investments. This even includes the software-as-a-service (SaaS) model that looks to eliminate capital budget expenses by morphing to a monthly pricing model. Looking to break down more barriers to purchasing, Mountain View, Calif.–based multichannel customer service software company eGain has unveiled a new model for its offerings: solution-as-a-service, which the company has abbreviated as "SLaaS."

"Many companies are in a Catch-22 in which the business case may be strong, but up-front commitments or some sort of long-term contract is necessary before seeing results," says Ashu Roy, chief executive officer of eGain. "Enterprise clients were…saying if we could just do this without a long-term contract, [and have] blended pricing, then we could easily justify it and proceed."

Johan Jacobs, a research director for Stamford, Conn.–based research firm Gartner, believes the SLaaS model is well-timed for today's recession. "[SLaaS] is a unique combination of value-based pricing with hosted software and bundled services on tap," he said in a statement. "SLaaS has the potential to transform enterprise software adoption in a tough economic climate."

First using the SLaaS model on its self-service module, eGain SelfService, Roy says there are several benefits that take SaaS to the next level, including the elimination of:

  • long-term contracts or minimum monthly payments;
  • upfront investment;
  • protracted time-to-value;
  • future lock-in;
  • risk of failure; and
  • payment for nonuse.

While it may seem too good to be true, Roy stresses that there is truly minimal risk going this route. "The catch is that customers may be looking for more perfection than they would if they were going with our regular SaaS or on-premise model," he admits. "In other words, if it turns out to be successful for the client, it could argue it would have been better off taking an upfront investment model."

The SLaaS edition of eGain SelfService enables companies to allow the vendor to host the software; design, implement, and manage processes related to content and customer interactions, self-service interaction options, and a common knowledge base for all self-service options; and provide self-service usage reports.

In addition, the offering has a 100 percent value-based pricing model determined by number of user sessions conducted per month:

  • Fewer than 10,000 sessions: $0.15 per session;
  • 10,000 - 49,999 sessions: $0.13 per session; and
  • more than 50,000 sessions: $0.10 per session.

Next on tap in the vendor's new SLaaS line include agent-facing contact center applications including call handling, email management, chat, collaboration, and knowledge management. "The third piece will be looking at proactive capabilities for service clients," Roy says.

Roy insists that this model can also benefit his company. He points to his company's global presence in the EMEA region in particular. "Because we have that global presence, we can offer 24/7 capabilities to customers in terms of hosting and more cost-effective services," he says. "We're taking advantage of that and, with our capability as a global organization, we can offer this and still be profitable."

In the end, Roy stresses, eGain will further expand its competitive footprint with this model. "We believe that we'll win," he says. "In the long-term, we will accelerate adoption and penetration into our target market, focusing on enterprises -- not just the small-to-midsize business market. We believe enterprises will respond positively to this offer and it's an opportunity to extend our access into those target companies."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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