In the future, on different stages, SaaS and the industrial Internet will coexist, dance together, and merge with each other.
Editor’s note: This article from the public micro-channel number ” ToB old “(ID: ToBlaorenjia) , author: Wang Deming.
With the further expansion of the Internet, the integration of online and offline is accelerating. With the advocacy and promotion of Internet giants, digital transformation has become a torrent that has swept the entire Chinese business world.
In the torrent of this era, we can see two representative forces. One is SaaS vendors, which provide companies with tools for digital transformation; the other is the industrial Internet, where they directly participate in the transaction process or provide platform services for transaction parties. Two forces dance together on the stage of the times. They have different paths, but they carry the same fate.
01 Sad Song of Ice
Early SaaS vendors started from small companies, such as Beisen in the HR field and 外勤365< /a>. Because of the low-cost nature of Internet tools, they are extremely attractive to small businesses. However, for management software, small businesses have limited willingness to pay, coupled with a short life cycle, small businesses cannot support the profitability of SaaS at all. Although large companies have a stronger willingness to pay, they have a lot of personalized requirements, which leads to SaaS vendors having to make customized delivery.
This areaThere is a question, whether the SaaS vendor is An Internet network company or a customized software company? Customized software will bring a series of problems: long project cycles, high labor costs, and risk of return payments, which have a great impact on the valuation of SaaS vendors.
Some SaaS vendors try to solve the customization problem through PaaS. Although this is a successful experience that has been verified abroad, after all, China’s national conditions are different, and it is difficult to say whether this road will work.
Another part of SaaS vendors try to provide consulting services for digital transformation. This type of SaaS is often industry vertical, because the knowledge and talents on the B side need to be accumulated for a long time, and it will lose depth and value if it does not focus on a few industries. In this regard, Mingyuan SaaS, which focuses on the real estate industry, is a model. It established Mingyuan Real Estate Research Institute in 2009. There is another SaaS company that may also provide high-quality digital products and services. For example, today’s assets under the Chengdu Urban Investment Group, companies with a state-owned background are more likely to understand that state-owned enterprises and large asset management companies may encounter problems in the process of digital transformation. To the question.
There are also a small number of SaaS vendors who try to intervene in the transaction process and obtain higher revenue scale by providing high-value operational services. For example, Da Soche, which acquired a used car B2B trading platform in 2018 Car easy to shoot. Such SaaS vendors are already transforming the industrial Internet.
As disruptors of traditional software, most Chinese SaaS vendors have not yet made a large-scale profit.The way to profit. The essential problem here is that just letting customers get more value is not enough to support a successful business model. SaaS vendors must find a business path that can provide more value.
For more analysis on SaaS, please pay attention to my official account: ToB Elderly.
02 Blazing Fire Song
Some startups choose to directly subvert the old industrial structure.
For example, in the field of fast-moving consumer goods circulation Fighting for cheaper, using the Internet to socialize warehouses, drivers and The sales staff is organized to directly help brand owners and large distributors to distribute goods. The essence of its business model is to improve the efficiency of the supply chain through the integration of social resources. SaaS tools are an indispensable part of its business model, but it is not a commercial product, but an Internet tool to implement business strategies.
The problem with the Industrial Internet is that just the innovation of the model does not guarantee the business success of the enterprise.
Relying solely on business drivers, it is difficult to get rid of its dependence on capital blood transfusion; relying on simple resource links cannot further improve the efficiency of the supply chain. For industrial Internet companies, it needs to establish more professional and smarter supply chain service capabilities to create sustainable and large-scale value.
For example, although relying on subsidies, products on B2B platforms may have a short-term price advantage. However, if platform companies cannot use the platform to obtain more useful data, thereby optimizing resource allocation and improving efficiency, it will be difficult to build a long-term competitive advantage.
From the perspective of data acquisition, SaaS vendors have a greater advantage over the industrial Internet. It also provides a set of SaaS tools for small and medium-sized enterprises. SaaS vendors can easily generate billions of real GMV in one year; while industrial Internet companies may need to pay more cost and time to obtain the same GMV.
The essential reason is that SaaS vendors start from the perspective of customers and empower customers; while industrial Internet companies start from the perspective of platforms and want to transform customers. However, transforming customers is only a means,To succeed in networking, it must ultimately depend on empowering customers or bringing value to customers. From this perspective, the last thing the Industrial Internet should not be impetuous or the pursuit of quick success. Because the supply chain is a complex ecology, unless you already have deep industry knowledge and talent accumulation, you must first complete industry accumulation.
As a disruptor of the old industry, in this era of social Internet, the industrial Internet can no longer create value through simple links. How to make full use of the Internet to improve efficiency, how to optimize the supply chain to empower customers, and finally form an intelligent closed loop, so as to complete the key leap of large-scale profitability, this is a topic facing every industrial Internet company.
03 A dance of ice and fire
SaaS and Industrial Internet are two business directions.
The former makes a living by selling SaaS tools, which is its core value; the latter uses SaaS tools and more uses SaaS tools as a means of realizing business strategies.
In the next few years or even ten years, SaaS vendors will continue to exist. Because there are bound to be multiple roles in a supply chain, there are resource integrators such as industrial Internet companies as well as goods and service providers such as manufacturing companies and service providers. The Internet attribute of the industrial Internet enterprise itself determines that it must be self-developed SaaS tools. Based on efficiency considerations, manufacturing companies and service providers will tend to source from SaaS vendors. Such a market will continue to exist for a long time to come.
SaaS and the industrial Internet have a natural blood relationship.
First of all, the background color of both is the Internet. This means that SaaS vendors can use the links established by SaaS tools, integrate resources, and use the acquired data to provide customers with more services; this also means that industrial Internet companies can open their own SaaS tools or develop a set General-purpose SaaS tools for use by companies in the supply chain.
However, whether it is SaaS vendors transforming the industrial Internet or the industrial Internet expanding SaaS business, it must be an extension of the original advantages. For SaaS vendors that have not done a good job of tools, there is definitely no possibility of success in transforming the industrial Internet. The same goes for Industrial Internet to expand SaaS business.
In the future, we will see more and more SaaS vendors try to enter the industrial Internet field, and we will also see more and more industrial Internet companies opening up their systems or acquiring SaaS vendors.
04 Conclusion
Digital transformation is the main theme of the next 10 years.
Whether it is a SaaS vendor or an industrial Internet company, in factThey are all doing one thing, which is to promote the upgrade of the industrial chain through digitalization and create value for customers.
So, if we look at the products of SaaS vendors and the systems of industrial Internet companies, we will find that they have similar business logic.
The difference is that SaaS vendors are more shallow, they just provide weapons. This is not necessarily a bad thing, because it means that they do not have to take greater risks. This also gives SaaS vendors flexibility: if there is no opportunity, they will honestly provide tools and continue to accumulate customers and data; if opportunities arise, such as providing value-added services, then they may as well try it boldly. SaaS vendors should always retain the awareness that in an environment like China, merely providing SaaS tools will not enable enterprises to achieve sustained and large-scale profits.
For industrial Internet companies, although they have more room for imagination, they also bear greater pressure and risks. Industrial Internet companies should maintain sufficient patience, because in this fully connected Internet world, they do all hard work. Do the hard work well, do every detail, keep accumulating data and experience, and solidify and amplify the advantages through products and algorithms. This is the shortcut to success. In the world of ToB, no one can casually succeed.
In the future, on different stages, SaaS and the industrial Internet will coexist, dance, and merge with each other. Just like ice and fire, in this digital age, they will compose a magnificent song together.