Software-as-a-service vendors: Are they ready to successfully deliver?

Software as a service (SaaS) is a software sourcing option that allows organizations to remotely access enterprise applications, without having to install the application in-house. In this work we study vendors' readiness to deliver SaaS, a topic scarcely studied before. The innovation classification (evolutionary vs. revolutionary) and a new, Seven Fundamental Organizational Capabilities (FOCs) Model, are used as the theoretical frameworks. The Seven FOCs model suggests generic yet comprehensive set of capabilities that are required for organizational success: 1) sensing the stakeholders, 2) sensing the business environment, 3) sensing the knowledge environment, 4) process control, 5) process improvement, 6) new process development, and 7) appropriate resolution. The results show that most vendors perceive SaaS as an evolutionary rather than revolutionary innovation hence do not employ radically new business processes. Some lessons were drawn from the past ASP failure, but a deep learning process was scarcely employed. These findings were particularly typical to leading vendors in the software product market who recently added SaaS to their business. In contrast, pure-SaaS vendors thought differently. Respondents consistently perceived their organizational capabilities higher than the rank calculated from indirect measures of the capabilities. This may well mean that the respondents' organizations were in fact less ready than expected. Furthermore, 'appropriate resolution' and 'new model development' were ranked low by the respondents, while highly correlated with customer satisfaction from SaaS. The readiness of SaaS vendors, therefore, especially those who are accustomed to delivering software products, is questionable.