Tuesday, June 12, 2012

SaaS & BPO, Complimentary or Competing?

I am reminded of the urban myth that when Juan Trippe the founder of Pan Am was looking for investors he went to the Railroad tycoons Vanderbuilt and Biltmore and both told him "we are in the railroad business, not the airline business."  When in fact they were all in the transportation business.  What would the world look like today if Trippe had acquired investment from Vanderbilt or Biltmore?

So today we have several Software as a Service companies, selling software as a subscription service, and some professional services for support, training and even customization.  Then we have Business Process Outsourcing companies that sell manpower, and expertise in various Business Processes, such as HR, Accounting, Call Centers and programming, project management and just about anything else you can think of.

The Small to Medium sized Enterprise (SME) is always looking for the lowest cost way of doing business.  Both SaaS and BPO have proven cost saving advantages for SMEs.  With SaaS they don't have to buy expensive servers, or software or install anything at all, just sign up and start using the software they need.  With BPOs, they don't have to pay for a single person to man the phones 7x24 or higher a part time person to do data entry, they go to a BPO and sign up and start using only the services they need when they need them.  The similarities are obvious.

It won't be long before you start seeing SaaS companies offering BPO services, and BPO companies offering SaaS subscriptions....or will they go the way of Juan Trip and the Vanderbilts and Biltmores?

1 comment:

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