Domestic SaaS has no future?
In the past two days, many small partners in the industry have conducted in-depth discussions on the future of SaaS in China, and their words are full of worries. Many people, especially investors, third-party experts, etc., are deeply disappointed that there has not been a decent company "supporting the wall" of domestic SaaS companies for so many years.
To be honest, it was really disappointing.
As a witness to the development of the domestic SaaS industry, it can also be said to be a participant. Whenever I think of this, I can't help being disappointed.
16 years ago, in 2007 , my friends and I initiated and organized the first SaaS professional conference in China: " 2007 SaaS in China - The First China Software Operation Service Conference". At that time, nearly 300 people came to attend the meeting. Later, we held the "China Software Operation Service Conference" for four consecutive times, becoming an important platform for promoting the development of SaaS in China.
In those years, there were several companies that I personally and many colleagues in the industry were very optimistic about. The first to bear the brunt was Alisoft, which was the most sensational at that time, established by Alibaba; followed by the high-profile entry of UFIDA Kingdee, and the establishment of Weiku and Youshang.com ; Newly established independent companies such as Jin Target and Fuji Standard Traders.
I remember very clearly that at the end of our first meeting, the guests took a group photo. At that time, some guests also said, let's see who will be there in ten years?
Fortunately, everyone is here. But none of the active companies at that time has grown into a listed company today! Some died, some are gone, and some have changed their careers...
In short, no company has achieved success in our popular sense! In this sense, it is not an exaggeration to say that domestic SaaS was "annihilated" by the media . You know, over the past ten years, American SaaS has ushered in many listed companies, and unicorns and SaaS companies with a market value of tens of billions of dollars are constantly emerging.
Therefore, compared with the United States, the domestic capitals who love SaaS are disappointed; the experts who are advocating for SaaS are also disappointed, including me, a media person who has been trying to become an "expert", and I feel deeply disappointed. disappointment.
( Note: My disappointment not only comes from the fact that the SaaS companies we support and are optimistic about have not become a new generation of enterprise application vendors that challenge UF and Kingdee. I think how many entrepreneurs set up the Flag at the beginning , to surpass UF and Kingdee, and to become China's Salesforce . But now, in the domestic market, it is still the older generation of software giants such as UFIDA, Kingdee, Inspur, and Neusoft.
It also comes from the fact that we have been serving the enterprise application market and promoting the development of the SaaS industry for so many years, and our own life has become more and more "hard". Our customers and SaaS vendors have not left the circle, and it is impossible to expect those who "sell water" to make "big money" after all. )
But, even so, I still think, I still believe that SaaS in China definitely has a future. Everything we are currently suffering is an obstacle in the development process. They will eventually pass, and the light will surely come.
The most fundamental reason is that SaaS is advanced productivity, IT , and the inevitable direction of traditional software development. Going from on-prem to cloud computing, like from the age of steam to the age of electricity, is a huge increase in IT productivity. All software will move towards cloudification and SaaS , which is the general trend of the times. The United States will develop in this way, and China will inevitably develop in the same way. China will usher in the era of SaaS popularization.
That being the case, why has Chinese SaaS been "annihilated" for so many years?
The reason I personally summed up is not the same as most people. I think there are four main reasons:
First of all, in the past few decades, the informatization, digital intelligence cognition and professional ability of domestic enterprise users are far from enough. They do not recognize the value of informatization such as IT and software, let alone the value of SaaS . Their needs are immature and unprofessional. Therefore, from the perspective of the overall development environment, the soil for the development of the domestic SaaS industry was still very poor. It can be said that this soil is far from being able to cultivate a healthy SaaS industry.
Secondly, domestic SaaS manufacturers have not found the products that domestic users just need. I remember that A Zhu (President of UFIDA Research Institute) once said that domestic enterprises only need "accounting computerization" for informatization, and everything else is icing on the cake. It is difficult to grow into a large company or a listed company without identifying the exact needs. CRM , collaborative office, HR , etc., although enterprises have needs, they are not rigid needs. In the past ten years, the general rigid demand of domestic enterprise users is "financial software". I deeply agree with Arjuna's point of view.
Again, the domestic SaaS ecology is very bad. The main responsibility for this lies with Internet giants such as Tencent's corporate WeChat, Ali's DingTalk, and Byte's Feishu. The free strategy of these giants has deformed the entire SaaS ecosystem. This is an industrial ecology that makes Party A users at a loss. For example, from those who don’t need money, or even post money, to hundreds of yuan, thousands of yuan, tens of thousands of yuan, hundreds of thousands, millions of yuan, or even tens of millions of yuan, they are all crowded together. Judging who is good and who is bad, you can't even scientifically determine your own project budget. This is also an ecosystem that makes it difficult for emerging SaaS vendors to survive. For example, an innovative SaaS manufacturer finally found a "quasi-needed" product, which was immediately caught up by major manufacturers and freed, and then there was no "then". If these Internet giants can build a relatively orderly market environment in the industrial ecology and act like "leading big brothers", the domestic SaaS industry will not develop into the current "bear-like". (Painfully, the free strategies of these giants, while acquiring a large number of users, have not made them commercially successful so far.)
Finally, and I think the most important point: the governance level of domestic SaaS vendors is immature. The reason why domestic SaaS manufacturers will be "annihilated" is that many of them "killed" themselves. More precisely, it is the result of immature and unprofessional entrepreneurial teams of domestic SaaS vendors. The capabilities of the CEOs of many SaaS vendors are not comprehensive enough, and there is a gap between them and the professional requirements of real CEOs . What's more unfortunate is that his entrepreneurial team and his brothers are often not very qualified professional managers. Together, they do not form a strong operating team. Many SaaS vendors have not formed their own cost and profit models, do not have accurate target customers, do not have their own core competencies, and do not have a complete LTC and SOP process... They are just starting a business with enthusiasm, and they are just bringing their own professional knowledge. They are starting a business with technical ability, and they are starting a business just to give investors and the team an explanation. Their organizational skills are poor, their human efficiency is extremely poor, and their profits are extremely poor. If domestic SaaS vendors have an experienced CEO , if domestic SaaS vendors have an experienced CEO coach, I believe they will never be "annihilated." In recent years, the CEOs of domestic SaaS manufacturers have had a difficult life and are under too much pressure. The entire industry needs to give them more help, a SaaSSystematic help on how the company should operate, not just investment and a CEO party.
Thankfully, the situation is improving. In fact, some of the "star" companies that appeared at our first China Software Operation and Service Conference are still alive, and it can be said that they are more sober and healthier than before. Like xTools and 800ke , these two domestic SaaS CRM pioneers who were also chased by capital and focused by the media , now there is no good news of XX round of contrarian financing, and there is no successful replacement of foreign XX products. News is no longer even considered, known, or understood by the media.
Before putting it aside, I would think that this is not possible, and such a company has no future. But I know now that this is the real way to survive. There is no financing news but it has been moving forward. This is the biggest and most solid good news.
Perhaps, it's because they now understand how to actually run a profitable SaaS company.
Of course, their road is not necessarily the road to success of domestic SaaS vendors. But I also believe that domestic SaaS vendors will soon change the current embarrassing situation. After all, the four reasons mentioned above are currently changing. Enterprise users are more and more accepting of digital intelligence, which has changed from passive demand in the past to active demand now, and more and more rigid needs are about to emerge; the business model of Internet giants has also changed from simple free to charged , the entire SaaS industry ecology is healthier; after more than ten years of hard work, the organization and operation capabilities of the entrepreneurial teams of domestic SaaS manufacturers have also become more mature and professional.
I believe that if domestic SaaS vendors are given another 5 years, they will change the whole world.