3 Reasons SaaS Savvy Entrepreneurs Don’t Build Their Own Portals

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A version of this article previously appeared in Forbes.

Even entrepreneurs that already sold on SaaS should stake note of new research from the SalientGroup:

SaaS gets funded - Nearly 50% of SaaS-based startups are getting successfully funded—a rate of funding success no other sector can match.

SaaS-based companies grow - The SaaS market is growing 3x faster than the software market (20% vs. 7%), and this rate is expected to continue through 2020.

Overall, according to Gartner, the SaaS market will top $22 billion by 2015.

But there are some even bigger reasons organizations at every stage should increase their savvy in SaaS. According to Dave R Taylor, CMO of Impartner, SaaS’s ability to snap in modular solutions at the highest levels is revolutionizing the final bastions of traditional IT.

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Impartner is one of the firms that recently received its own new funding to help the company accomplish what Taylor and CEO Joe Wang have accomplished together before at WatchGuardTechnologies and LANDESK. As previously reported by Forbes, they are taking a market category that is poised for growth – in this case Partner Relationship Management (PRM),. They are taking Impartner to new heights with the help of a modular solution to partner portals based entirely on SaaS.

Like Impartner, Micro Dynamics is also banking its future on the fact that nearly anyone with a partner portal can be up-ended by a SaaS-based potion of simple modularity. It’s a sector poised for significant growth by using SaaS to knit together SaaS solutions which reinvent this traditional IT.

For enterprise companies (as well as many midrange businesses), the ability to partner with other companies for deal registration, fund tracking, lead distribution, order fulfillment, etc., is du jour. It’s unlikely you can find a company that isn’t willing to use a technology portal to accomplish these goals.

This is where SaaS gets sexy. Traditionally, companies have been building their own portal. This approach allows IT to link their tools with their partners.

While this made sense in the past, the days of Build Your Own Portal are done. Why?

  1. Time to market. For most companies, the process of building a homegrown portal involves 6-12 months. In the tech world, that’s a lifetime. In contrast, a SaaS solution that snaps in like a lego block can be up and running within the space of a month. Not only does this save hundreds of thousands (possibly millions) in development costs, the increased revenue gained can be immense.
  1. Maintenance costs. Even assuming you build your own portal acceptably well, it’s a living animal. As the CRM and other systems the portal connects with evolve, a home-grown portal must accommodate ever changing features and functionality.
  1. Infrastructure requirements and cost. Portals that live in-house require servers, security, configuration, redundancy and availability. Most companies do not have the infrastructure to build and support an enterprise-class portal.

Thanks to the increasing modularity of SaaS, entrepreneurs can now "snap in" a scalable solution that increases their efficiency while enhancing customer satisfaction.

The opportunity for service providers is to help companies, especially those at the enterprise level, to integrate their SaaS modules. For instance, a Utah based started called Simplus, is achieving early success with this business model. The result: they had more than 20 enterprise customers on Day 1.

The bottom line is that whether you’re a user, integrator or entrepreneur builder of SaaS systems, the evolution of SaaS is a phenomenon you can’t afford to ignore. SaaS is bringing sexy back, in 2015 and beyond.

You can follow John on Twitter: @johngreathouse.

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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