Since Salesforce first put forward the slogan of "No Software", the development of SaaS has been almost 20 years. The initial development history of Salesforce is also very interesting. There are a lot of creative marketing activities in it. The following book about the history of "Salesforce" is worth reading. For example, the Salesforce team often hires actors and temporary workers around the world to hold "No Software" signs and "protest marches" in public places. This creative event attracted a lot of media attention and heated discussions, bringing free traffic to the business.
It is mentioned in the book that "the most effective sales are not done by the sales team". There must be a cocktail party in Salesforce activities to promote communication between customers. Positive feedback from customers has become the most effective chain of communication Good marketing weapon.
Judging from various indicators, the development of China's SaaS industry is probably at least ten years later than that of the United States. In 2010, Salesforce's revenue reached 1.3 billion US dollars. In today's China in 2022, there are very few software companies with a revenue of 1.3 billion US dollars, and there are not many SaaS companies with a revenue of 1.3 billion yuan.
In the capital investment cycle of China's SaaS industry, around 2015 should be the first peak period, and 2020-2021 should be the second peak period. However, from the perspective of the market and users, the biggest booster of the SaaS industry should be platform-level super apps such as DingTalk, Enterprise WeChat, Welink and Feishu.
Before the emergence of these platform apps, large enterprises have always resisted the use of public clouds and SaaS, and security and data have always been a concern. And because the R&D teams of large enterprises are large enough, they don’t feel that ordinary SaaS products are so powerful in terms of products and technologies until the emergence of super APPs.
These platform-level super apps come from the technology and product forging of the Internet in the ToC field, surpassing the traditional ToB enterprise-level apps in terms of experience and infrastructure. Today, if a large enterprise wants to replicate such an APP with its own team, it may have to maintain a team of hundreds of people alone, and it will also have to use a lot of cloud computing power. If these super apps are deployed privately, the maintenance cost and iteration cost will be much higher than the SaaS version. In this case, even large enterprises have begun to give up their obsession with "non-private deployment".
In the past, in order to sell a customer a SaaS software worth 100,000 yuan, it may cost hundreds of thousands of dollars to convince customers at all levels to accept the SaaS method. The customer's business department actively using SaaS may be challenged by the IT department; even if the CIO actively promotes SaaS, he must overcome the boss's anxiety about data security. When a company's original privately deployed application system is torn apart by a super APP, more and more third-party SaaS applications can also use these super APPs to enter the platform's application store, as small programs on the platform to enable customers You can quickly experience new products and functions. The Super APP also has various security access to the small programs on the platform, and has relatively good regulations on data usage and security protection, making customers feel more at ease when using it. These super APPs have pushed China's SaaS development process forward for at least five years.
The 2020 epidemic is also a catalyst for SaaS products, and of course this is global. In the past three years of the epidemic, Zoom's revenue has increased from US$330 million in 2019 to US$4.1 billion in 2022, which can be said to be a myth of growth in the software industry. Due to the remote office caused by the epidemic, in order to ensure production, even some conservative large enterprises have given up the obsession of "only using private deployment" at this special moment and began to actively embrace cloud and SaaS.
At the end of 2021, due to the increase in interest rates in the United States and the decline in capital market valuations, the SaaS field has also encountered a capital winter. But this cold winter will not be an obstacle to the development of China's SaaS industry, but may be a booster. Products with ineffective competition may quickly withdraw from the market or be acquired by peers, while those companies with sufficient cash reserves, excellent cash flow performance, strong product capabilities, and strong organizational execution will stand out at this stage and form a better ecology.
The emergence of super-platform-type APPs has many benefits for the entire SaaS industry, but it also brutally removes what may be the best card in the industry. If in the game of Texas Hold'em, you get the card above, because the square A may be in the hands of the opponent player, it will affect the player's determination to All In. Similarly, if in the era of super apps, investors and customers will ask the same question, does your product have the potential to surpass these super apps in the future? What if it is imitated by a super APP? If the imagination is lost, the capital will not give a very high valuation. After all, part of the capital pays for the dream.
For enterprises, if there is a super APP that can integrate other SaaS, it can also reduce the trouble of enterprises deploying applications. If multiple APPs need to adapt to various mobile phones on the market, the customer's maintenance cost will increase significantly. In addition, since the push mechanism of domestic Android phones does not go through Google's GMS, but is maintained by each mobile phone manufacturer itself, this also causes the message push mechanism on Android phones to be inconsistent, requiring each APP to be set individually, making the experience difficult be consistent. Due to the large number of Android mobile phone models, independently developed APPs also need to adapt to different resolutions of different models, and unexpected results often occur on some niche mobile phones. If you have self-developed voice calls on Android, you will find that some mobile phones cannot be awakened by a message after clearing the memory. For the IOS platform, those enterprise-level applications that are not in the application store will need to have a certificate update every few years, and the way for users to update the APP is also very inconvenient.
These "minor problems" will make customers more inclined to use a platform-level super APP produced by a large manufacturer as a base. In addition, the super APP also serves as a connector between the basic base and other SaaS products, such as calling the basic information of users, maintaining basic personnel information, and transferring data from one applet to another applet.
For start-up SaaS companies, they should actively embrace these super APP platforms, because these platforms have very good traffic, and developing on these platforms can save a lot of infrastructure costs, quickly test their products and scenarios, and so on. After a certain level, consider how to survive outside the platform.
For Party A, it is also very important to choose a long-term and reliable super APP platform as the base. It is recommended to consider from various aspects such as openness, organizational stability and team size. If the super APP team is too large, it may do many things that other SaaS application companies should do, affecting the development of the ecology; if the team is too small, it may not be able to survive the competition for a long time.
In the long run, perhaps when the technology iteration speed slows down, a completely open source super APP platform will appear in the future, similar to the Chrome browser on PCs. In this way, whether it is a start-up SaaS application or a customer, there is no need to worry about being bound by a platform.
For those SaaS products that are not platform-level APPs, after reaching a certain level, how should they break through to the next stage?
First of all, you can consider doing vertical industries. After all, platform-level APPs are general-purpose products, and it is difficult to achieve deep cultivation in all industries. Each industry has different ecology, rules, and upstream and downstream chains, and the business logic is also completely different. SaaS single products can consider combining the ecology of software and hardware in vertical industries to become a leader in segmentation, such as Glodon in the construction industry, Kujiale in the decoration industry, etc. The last vertical industry is the Industrial Internet, and its value may exceed that of a tool-based platform APP.
The second situation is that SaaS single products overlap or compete with these platform-level apps in some functions, such as video conferencing, document sharing, network disk, and even basic functions such as dialogue. If you want to stand out in the brutal competition, you have to maximize the functions in the areas you focus on, and make the ratio of team resources in this direction stronger than that of super apps. Although the super APP team often has a scale of thousands of people, there may be only a few people when it is subdivided into a certain function point, and because various functions are coupled, there may be some restrictions on the product iteration of single-point functions; or It is because of frequent organizational structure adjustments that it is impossible to maintain long-term stable investment at a certain function point.
SaaS companies should also be integrated vertically and horizontally, and their missing functions can be supplemented by other SaaS or professional software products. For example, a good CRM product may have a simple BI report function embedded inside, but it should also be able to connect with professional BI tools to provide customers with more powerful reports. When Party A purchases a SaaS product, you can actually ask one more question, what other SaaS products does your company use? Which SaaS products in the industry are worth recommending? A peer who observes peers may be able to bring some different perspectives to Party A. If a SaaS company does not use other SaaS products at all, it may not be open enough in concept.
Finally, going overseas is also a good choice. Most of the current platform-level APP market is still in China. If you position your product for globalization from the very beginning, and make the globalization scene into a SaaS product, then you can completely avoid the situation of competing with platform-level apps. Overseas customers have a high degree of acceptance of SaaS, and PC-based SaaS products can also have many customers.
The next five years may be the new five years for Chinese companies to go overseas. In the past, China's exports were more of an OEM method, and the brand was not its own. However, with the improvement of domestic technology level, more and more enterprises go overseas with their own brands, such as new energy vehicles. The automobile industry is the leader of the industry. If Chinese brand automobiles can occupy 20% of the overseas market in 5-10 years, many companies in the supply chain will go overseas together. Product companies like AfterShip, Airgram, Zhuang Sheng Xiaomeng, and Arounddeal are doing very well in going overseas. If you are interested, you can read the following article to learn about the story of going overseas.
"Globalizing Products, Not Globalizing Products | China SaaS Overseas Salon Phase 1 Record"
Summary and Outlook
Back then, Salesforce bravely put forward the "No Software" Slogan, creating a new field in the software industry. Although China's SaaS road will definitely be different from Salesforce's, I hope that each product can bravely propose its own Slogan and find its own SaaS road.
