Are there Differences for Marketing SaaS versus On-Premises Solutions?

From a customer perspective Software as a Service (SaaS) and On-premises business software solutions have the same objectives of creating business value by providing applications and functionality for improving business processes and performance.  The customer buying motivations are the same – solve business problems, develop new opportunities, improve performance, increase profitability, etc.

Marketing SaaS and On-premises business software solutions have the same objectives of developing a credible market presence, creating awareness, generating leads and enabling sales to efficiently sign up new customers.  The marketing tactics are the same – using a familiar mix of webinars, events, collateral, PR, SEO, web content, analyst reviews, email marketing, videos, social media, etc.

When SaaS solutions first emerged as viable alternatives to the traditional On-premises approach, the marketing focus was primarily on the different acquisition and deployment characteristics of SaaS.  More recently the marketing focus for SaaS solutions has shifted to the application functionality and business value for customers as more SaaS and On-premises vendors compete for the same customers in target markets.

So what’s different?  The real difference is that customers now need to make 2 buying decisions:

1. Which solution best fits their business needs
2. Which acquisition / deployment option best fits their IT strategy.

Customers can take two different paths to making the buying the decision:

1. First develop a short list of best fit solutions and then decide on available acquisition / deployment choices as part of the final decision process.  While SaaS versus On-premises may not be the initial primary decision driver, it could be a key final decision factor.
2. First decide which acquisition / deployment option they want and then find the best fit solution that meets the selected acquisition / deployment criteria.  SaaS versus On-premises is the initial primary driver, but functional fit between qualifying solutions will be the final decision factor.

This has implications for marketing both SaaS and On-premises solutions for positioning and differentiating according to each decision choice and path in the customer buying process.  It also has implications for sales to determine how to engage with prospective buyers depending on which decision path they are following.

Given that customers need to make 2 buying decisions and usually take two different paths to reach a decision, business software vendors may want to consider a bifurcated marketing strategy for positioning and differentiation:

1. Traditional functional fit solution marketing approach emphasizing business benefits and applicability of the solution functional capabilities.
2. Acquisition and deployment marketing emphasizing the business and IT benefits of each available acquisition / deployment option.

“If you're attacking your market from multiple positions and your competition isn't, you have all the advantage and it will show up in your increased success and income." – Jay Abraham

I’ll explore the differentiating and positioning possibilities in future blog articles.

Have you faced this situation and how are you approaching it?  Your comments are always welcome.
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