The Perils of SaaS

You wouldn’t be surprised to learn that Zoho is a pretty hardcore advocate of SaaS. After all… that’s all we do! And there’s no question that SaaS will be the predominant way in which companies buy and use software for many years to come.

Still, some customers are apprehensive of surrendering their data to a provider that might go out of business or hold it hostage. For the most part, online software companies do a very good job of making it clear that data belongs to customers, and they can take it with them whenever they want. That has certainly been Zoho’s policy from day one. We provide multiple API and Export options, and will also work with a customers when s/he wants to take his business (and data) elsewhere. It’s not only good for business, but it is also the right thing to do.

The key phrase there is… “for the most part”.

As you know, Zoho Invoice competes head-on with Intuit’s Billing Manager. The other day we read in their blog that they are discontinuing the product, and we were a little surprised to learn that. Anyway, many other of our competitors have closed down shop, so that’s no big surprise. Companies may go out of business, products get discontinued… that’s just a fact of life. Except that… Billing Manager customers have no easy way to export their data OUT of the system.

They are stuck.

You can of course, export your data to Intuit’s other billing product, you know, the one that doesn’t offer a free option. Intuit is giving Billing Manager customers one free year of Quickbooks Online. After that, they’re going to be charged ~$13 per month. $13 doesn’t sound like much, but it is certainly a “nice” business move to get customer to pay (even if deferred by one year)… people that would have otherwise have been free.

This was not the intention behind the freemium idea! That’s too bad for customers, because they chose a seemingly solid player that at the end of the day, left them hanging.

Cost is not the only issue. Billing Manager customers are also loosing key pieces of functionality. For example, estimates and currencies-other-than-US-Dollars are not supported in the version of Quickbooks that Intuit is recommending customers switch to. Not only that, many customers have expressed their desire to use an invoice-only product. We understand that. 

You’d think that we’re happy with this, because it could only mean that customers would come over to Zoho Invoice – at least to give it a try. But turns out we are not. Why? Well, because it makes SaaS software seem like an unsafe choice.

So we’d like to suggest Intuit do the following two things instead:

– Make it easy for customer to take their data with them. Currently customers have no way to export their data out of Billing Manager. They can only migrate it to Quickbooks Online. Sure, it’s “nice” of you Intuit to make it easy for customer to give you data when they are moving from a free product to a paid product. But you also need to make it easy for them to take their data and leave should they choose to do so.

– Honor your commitment to customers. If you were going out of business, well, then not much you can do about it. But you are a successful company. You promised customers a free service. Honor that commitment. You can close Billing Manager, move customers to Quickbooks Online. That is fine. Just create a SKU that has comparable features set to what Invoice Manager had… and give it to them (and only to them) for free. At Zoho we have changed pricing for some of our products from time to time, but we have maintained the pricing to what customers signed up for (for as long as they remain a paying customer in that plan). 

That can only be good for customers and the SaaS industry as a whole. And it is also the right thing to do.

Finally, a piece of advice for customers. Before you sign-up with any SaaS vendor (regardless of their size and name) be sure to check whether you’ll be able to take your data out, and also make sure you check on your vendor’s reputation and history of handling these issues.

Rodrigo