CRM and software-as-a-service
pharmafile | December 21, 2010 | Feature | Sales and Marketing | CRM, Dan Goldsmith, Service Insight, Veeva Systems
Service Insight from Dan Goldsmith, general manager, Europe, Veeva Systems
Criminal mastermind, Frank Abagnale Jr. (1901-1980), successfully conned millions of dollars out of the pockets of innocents by posing in dozens of disguises including a Pan-American pilot, a doctor, and a professor.
He was so skillful that in just five years, he stole more than $2.5 million in 26 countries, a feat made famous by the 2002 film ‘Catch Me If You Can’.
Today, many Customer Relationship Management (CRM) vendors are trying a similar heist by disguising their products as Software-as-a-Service (SaaS), in hopes of profiting from this revolutionary technology’s recent explosion.
CRM knockoffs
It’s a big problem, especially in the European life sciences industry that has been dominated by just a few, large on-premise CRM providers for the last two decades. Today these vendors plus some new market entrants are scrambling to compete with new CRM SaaS pioneers. They make a few tweaks to their database servers, modify their pricing structure, and go to market with pricey CRM knockoffs (cleverly disguised as SaaS).
CRM knockoffs look like SaaS, they sound like SaaS – but they are merely cloaked in SaaS clothing. These vendors charge customers to install, configure, and maintain the application on their hardware at their location then abuse the term ‘SaaS’ by defining it simply as any application that can be accessed over the internet.
In reality, these are just ‘hosted services’ that are still shackled by all the same costs and limitations as outdated single-tenant on-premise and on-demand solutions. They incur major expenses each time the software is upgraded because previous customisations are lost and the application has to be redeployed for each individual customer.
Unfortunately, many customers do not realise this until it is too late.
Multi-tenancy
Multi-tenancy – NOT web access – is what makes SaaS truly powerful.
Multi-tenancy is the architectural model that allows SaaS CRM vendors to serve multiple customers from a single, shared instance of the application. Only one version of an application is deployed to all customers who share a single, common infrastructure and code base that is centrally maintained. This is called ‘shared schema.’
Remarkably, however, no one customer has access to another’s data and each can configure their own instance of the application to meet their specific needs. Multi-tenancy separates the platform and the applications that run on it, making it possible to create applications with logic that is independent of the data it controls.
So, instead of hard-coding data tables and page layouts, users define attributes and behaviours as metadata that function as the application’s logical blueprint. Individual deployments of those applications occupy virtual partitions rather than separate physical stacks of hardware and software. These partitions store the metadata that defines each customer’s business rules, fields used, custom objects, and interfaces to other systems.
These virtual partitions also store custom code, ensuring that any potential problems with that code will not affect any other customer. This approach also makes it possible for administrators to customise the application as needed using simple point-and-click tools.
To illustrate the difference between SaaS’s multi-tenant architecture and the single-tenant architecture characteristic of on-premise client/server or hosted/on-demand applications, think of a neighbourhood versus an apartment complex.
In the neighbourhood, each homeowner has their own lawn to mow, their own plumbing to maintain, their own electrical system to operate, and their own walkway to clear.
In some neighbourhoods, each homeowner may keep their server on his own property – i.e., on-premise client/server. In other neighbourhoods, each homeowner may connect to their server remotely – i.e., hosted or on-demand.
This is a single-tenant infrastructure, where each customer has its own dedicated server that runs its own version of the application.
Now, think of an apartment complex. The upkeep of the lawn, plumbing, electrical system, water supply, and walkways are shared by all of the apartment’s tenants.
Residents don’t have to do maintenance themselves because they are all handled by one central office. This is multi-tenancy, and is the reason that multi-tenant SaaS is so extremely cost-efficient to deploy and maintain.
The customer has no hardware to purchase, install, or maintain. The application is built on a shared infrastructure, where all servers, networks, and functionality are managed from a central location and the application is accessible through any web browser. And, it’s this economy of scale that also enables the vendor to provide the very best hardware for the customer’s application to run on, enabling best-of-breed security, speed, and performance.
The host handles all system upgrades, which are transparent to the users so everyone is always working on the latest, highest-quality software release.
Market complexities
Multi-tenancy enables the many powerful business advantages celebrated by SaaS users, including outstanding scalability, best-in-class performance, and unparallel flexibility. In today’s complex European market with so many different healthcare stakeholders and languages depending on the country; flexibility is one of the biggest advantages that a multi-tenant CRM application delivered in the cloud can deliver.
Organisations need the ability to make changes to their applications quickly, frequently and without limit in order to account for a wide range of markets. This also enables far greater business agility for each customer. No longer does the customer organisation have to deal with incompatible architectures or upgrade issues.
Harnessing a true multi-tenancy approach, organisations can focus on operating their business at the speed of the competitive market and introduce new business strategies without being encumbered by technology.
In addition to being highly flexible, multi-tenant CRM applications support European life sciences organisations’ need to reduce costs. Recent increased cost reductions are causing many European governments – especially those with public healthcare – to impose serious pricing pressure on branded products, dramatically cutting into profit margins.
SaaS applications delivered in the cloud require no hardware to buy or software to maintain plus deliver free automatic upgrades.
In addition, they significantly reduce the operational complexity and effort of your IT organisation. Without capital infrastructure or ongoing maintenance costs, such CRM applications have a total cost of ownership that’s five to ten times less than installed software.
So carefully scrutinise imposters whose goal, like that of Frank Abagnale, is to con you. They will mask their products and use terms that sound like multi-tenant, such as ‘isolated tenancy,’ ‘mega-tenancy’ and ‘hybrid tenancy,’ which are – at best – lower levels of service but not multi-tenant SaaS. There’s only one genuine article.
The rest are merely masters of disguise.
Dan Goldsmith, general manager, Europe, Veeva Systems and can be contacted at: dan.goldsmith@veevasystems.com. Visit: www.veevasystems.com
For more information on Service Insight features contact InPharm’s sales team on +44 (0)1243 772 010 or email pharmafilesales@wiley.com
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