Wednesday, March 25, 2009

Are Your SaaS Vendors in Trouble? And If So, What Can/Should You Do?

So what do green energy, software as a service (SaaS), radio frequency identification (RFID), and their offshoots and affiliates all have in common as industries or markets?

Two things, for the purposes of this particular rant.

Thing the First is that they were all predicted as recently as the end of 2008 to be some of the few areas that were likely to weather what was (apparently) seen by many (but not everyone) then as a looming but temporary economic...unpleasantness.

Thing the Second is that given the significantly more robust and sustained nature of said...unpleasantness, all three of arenas are facing significant, sustained challenges. In many cases, these challenges are life-threatening to at least some companies – and unspoken of by almost all of them, especially those not publicly traded and therefore compelled to make at least some financial disclosures.

Now, it's not lost on me that among SaaS companies, is not only a market leader and publicly traded. According to its most recently disclosed financial information, while challenged, it is not in any real, imminent danger. (As I expected during the recent media mini-furor over whether or not SaaS was going to make it, or something like that.) I worry far more about the ecosystem of smaller and emerging SaaS and SaaS-related suppliers, including some of's partners.

I especially worry when I see no recent announcements of major customer wins, or even significant pilots. I also worry when I see no announcements of strategic alliances – or see what are touted as such, but that include no laudatory statement from any senior executives from the supposed “strategic partner.”

I'm not sayin'. I'm just sayin'.

Green energy is not one of my core strengths, so I'll leave that to others more expert and focused than I. (I would But where SaaS and RFID are concerned, well, I'm concerned. And I'll have more to say about both Real Soon Now. Meanwhile, though, if you don't have them in place yet, craft, execute, and enforce some effective, protective, and business-driven service level agreements (SLAs) with every SaaS or RFID vendor or reseller critical to your business. And keep close tabs on the financial health of those vendors. To the extent that such tabs are possible, at least.