No PaaS, no SaaS
Editor’s note: This article is from WeChat public account“Zi Ziguangian” (ID: jazzyear), author Xiao Mu, edit match Q.
In mid-2014, a “SaaS squad” organized by Jingwei Ventures came to Silicon Valley. They visited around and wanted to catch the secret of the success of American SaaS.
The squad’s visit list includes Star SaaS companies such as Salesforce, Twilio, Taleo, Workday, and Box. Everywhere, Chinese learners always throw three questions:
Manage SaaS software, is it free?
Do you want to be a big customer or a small customer?
Why does SaaS replace the installed software?
The domestic SaaS market has just started, the mainstream view is to make small customers and free products, but this “SaaS squad” has got a very unified answer:
Free? Never heard of it;
SaaS is definitely a big customer;
Why change? cost.
After this trip, Jingwei Venture Capital’s investment in China began to shift to large-client startup projects; the vice president of Beisen, Ji Weiguo, also unswervingly led the team to join the big customer market.
When Wei Weiguo was outside the “three answers,” he also learned a message that surprised him:
Many American stars SaaS, including Salesforce and Workday, are already doing their own PaaS (Platform as a Service), available as a platformDevelop, operate, and manage the environment and resources of business applications.
When domestic SaaS is still focusing on standardization and scale for small customers, Beisen has embarked on a road that was not understood at the time: Doing a big customer and building a PaaS platform.
To 2016, domestic SaaS vendors have gradually reached a consensus: small customers have insufficient awareness of payment, weak capabilities, and low self-sustainability. The SaaS market should shift to medium and large customers and must be charged.
Every player who has stepped into a big customer has made an unanimous choice: to do PaaS.
Selling Yi, Youzan, Mingdao, Netease Yunxin, Tencent Enterprise, Red Circle Marketing and other companies have launched the PaaS platform around 2016.
However, three years later, “SaaS manufacturers do PaaS” is still controversial: practitioners have Beisen, sales, and praise, and the representatives of the opponents have six degrees.
But the undeniable fact of both sides is that the “PaaSization Movement” of China’s SaaS, which has been engaged for three years, is difficult and has a huge investment and is still in a relatively early stage.
This article, “Kizi Guangnian” around SaaS PaaS practice, interviewed a number of SaaS vendors such as Beisen, Sales Easy, Red Circle Marketing, Youzan, Zoho, Liuduren and (EC), Ronglianyun, and 翊翎 Capital partners Fan Weixiao, Li Dong, Ming Shi Capital Partner Zeng Yingzhe and other digital investors and analysts.
In China, is SaaS manufacturer doing PaaS in the end or is it a pit? Is there any other logic in PaaS besides serving big customers?
1. “No PaaS, no SaaS”
In 2015, CRM vendors sold a rare and well-known dairy company. At that time, the company was looking for “three times and five times” and hoped to optimize its seven system function modules and nearly 120 function points to serve the Group’s first-line sales business.
But the demand of the dairy company is very complicated, the sales can easily get rid of the scalp and get a good income, but this kind of practice requires a large number of people to engage in services, similar to local deployment, it is difficult to balance product updates and business expansion. Very “not SaaS”.
In the end, sales are just a good time to watch the loss of big orders.
After this, sales have increased the investment in the PaaS platform. “If you don’t do PaaS at the time, the company’s growth will be very limited.” Sales CTO Zhang Zhong told “Ki Ziguangnian”.
“To be a medium-sized customer, there is no PaaS to play.” Beisen Ji Weiguo also holds the same view.
At the Beisen User Ecology Conference held on Thursday (August 8th), in the face of more than 1,000 audiences, Ji Weiguo declared his industry judgment with a bright and colorful line:
No PaaS, noSaaS.
Before this, Beisen has been on PaaS for 5 years. After visiting Salesforce in 2014, Ji Weiguo quickly organized a PaaS team of nearly 100 people, reconstructing the four-year platform capability of Beisen, and released the first PaaS platform in July 2015. —BeisenCloud.
Regardless of whether it is the pain of selling the flow of easy flow, or the strategic prospects of Beisen’s acquisition, the most direct reason for their PaaS is to adapt to the customized and personalized needs of large customers.
It’s like a business service investment logic that Ming Yingzhe’s partner Zeng Yingzhe explained to “Ki Ziguang Nian”: “Don’t care whether the product is standard or non-standard, the key is efficiency.”
The value of PaaS lies in the fact that Chinese customers have a strong demand for non-standard products and services, and it can deliver in a more efficient manner, thus achieving scale.
From this origin, most of the PaaS made by domestic SaaS vendors are APaaS (AplicationPaaS). This is an extremely efficient application development platform, also known as a “low-code platform”, that can quickly develop cloud applications using plug-ins or simple code in a visual interface.
At present, domestic SaaS vendors such as Netease Cloud, Ronglian Cloud Communications, Aurora Big Data, and Shenke Data have been involved in APaaS:
In the specific path of building APaaS, Beisen and Sales Yi borrowed from Salesforce: the PaaS platform first introduced to internal developers and some customers; then to ISV (Independent Software Vendors, ISV) and The open PaaS platform that customers can use independently, hopes to use the power of ecology to make new SaaS grow on PaaS to meet more segmentation needs of more customers.
Sales has launched a customized CRMPaaS platform for home improvement, automotive and other industries last year; Beisen will be at 20In the first half of the 20th year, the company launched an open PaaS platform for partners, and in 2021, it will be fully open to ISV.
In the vision of vendors such as Sales Easy and Beisen, their competitive advantage with PaaS can be summarized as 4 points:
1. Efficiently meet demand–PaaS can increase the development speed of customized requirements and reduce the development and implementation cost of individual projects;
2. Increase customer stickiness – the more satisfied the customer’s individual needs are, the less likely they are to be lost;
3. Building a moat – SaaS is easy to fall into homogenization competition, and PaaS, which is technically more difficult to achieve, increases the thickness and complexity of the product and is not easily imitated quickly;
4. Forming an Ecology, Focusing on the Core – The superposition of the above points, together with the ecological cohesion of the open PaaS platform, will enable SaaS vendors who master PaaS to focus more on development and iteration, forging and strengthening their core competencies.
The above ideas have gradually come into reality.
This year, I missed the sales of a leading dairy company and easily picked up a big customer: Shanghai Electric Group, the sales leader in China’s machinery industry equipment manufacturing.
In the newly signed big order, Shanghai Electric wants to “refine the project from the whole group level with the help of sales easy CRM, and the digital transformation of the whole business module”, which involves its distribution in new energy and environmental protection, efficient cleaning. The four major industrial groups in the energy equipment, industrial equipment, modern service industries and more than 50 subsidiaries, a total of nearly 3,000 sales staff.
This large-scale complex demand has been difficult to undertake in the past, but the sales of PaaS capabilities will not let them lose their orders. Based on the PaaS platform, in addition to providing some standard modules, they also quickly develop for Shanghai Electric. Tools such as OKR management system, meeting reservations, etc.
“Compared to the code code, the PaaS platform can improve development efficiency by at least 10 times.” Zhang Zhong told “Kizi Guangnian” that customers who are now selling 46% are using their PaaS platform for application development and Extend.
Beisen is also developing native HR SaaS products through the PaaS platform. According to Beisen’s own data, the development speed has increased by 4-5 times and the development cost has decreased by about 70%. When the BOE is engaged in a school recruitment interview collaborative system project, the traditional developer has to work for nearly 580 person days, using Beisen. The PaaS only takes 180 people and the working hours are compressed to nearly one-third of the original.
2. “PaaS is a pit”
But another fact that cannot be ignored, the SaaS company that invested in PaaS, although it has better captured large customers, is still generally at a loss. Beisen, sales and red circles have not been profitable in recent years.
At least from the current situation, PaaS has not fully completed the “efficient service customization”Close the loop of demand, which brings about large-scale benefits.
Even an investor who has contacted a large number of SaaS projects told him that “Bea Light Year”: PaaS is just a bad way for SaaS manufacturers who are not living well to create imagination and exchange funds in the primary market.
Whether it’s time or not, is the direction wrong?
As a CRM manufacturer, Liu Xingliang and CEO Zhang Xingliang prefer the latter. He does not agree with the current practice of domestic manufacturers deploying PaaS. As early as 2017, he declared that PaaS is a pit.
Over the past two years, his thoughts have not changed. “I don’t recommend anything about PaaS.” Zhang Xingliang told “Yi Zi Guang Nian”.
Behind the stark view is the six-degree man and observation of the PaaS logic.
Zhang Xingliang believes that the core value of PaaS is to achieve a diminishing marginal cost. To achieve the diminishing marginal cost, a large number of customers must be available to abstract the common modules that can be reused. In other words, PaaS directly in order to more efficiently serve large customer customization needs does not conform to the basic logic of PaaS.
Back to the origins of PaaS, its prototype was born in the practice of SAP service manufacturing in the software age.
After serving a large number of customers, SAP found that manufacturing companies generally have general requirements such as invoicing, so the split business is made into corresponding components and exists in the software library; when it is necessary to serve new customers, directly from the library The splicing of the splicing has greatly reduced the marginal cost.
Since 2004, Salesforce put this concept on the cloud and finally launched the open PaaS platform in 2007.
In Salesforce’s “multi-tenant architecture”, PaaS has evolved from a reusable toolbox that requires local deployment to a platform that can be iterated and updated online, with marginal costs further reduced. Also in this process, Salesforce, which originally used small and medium-sized companies as its main customer group, gradually migrated to the big customer market.
To summarize this journey, the formation of PaaS requires two key elements:
1. The customer itself has a high degree of concentration – this is the basis for extracting commonalities. For example, SAP’s strengths have always been manufacturing.
2. Accumulate enough customers in the initial stage – this will abstract enough common demand and precipitate enough “libraries”; when Salesforce started PaaS in 2004, there were more than 100,000 customers, including A large proportion is small and medium-sized enterprises; while domestic CRM companies focusing on large customers start to invest in PaaS around 2016, the number of customers is generally around several thousand.
The CEO Crow has also publicly stated that there are two cores for making PaaS: one is a first-class SaaS or application; the other is a certain amount of customers.
This is also why Salesforce isIn the first nine years of its establishment, the focus was on the small and medium-sized customer base. By 2008, only the big customers with higher willingness to pay the mainstay and higher customer unit price, the start-up point and the financial crisis made the large enterprises generally shrink. Cost related.
“Being a big customer from the beginning, it is easy to make a project system. Even the CEO of the company has rushed to the project, and there is energy to do commonality extraction.” Zhang Xingliang said.
Six degrees and (EC) themselves are sticking to the principle of being small to large. At present, 80% of the customers are small and medium-sized customers, and have achieved good results: after turning to social CRM in 2014, six degrees and last year The market income has reached 320 million, the cash flow is good, and gradually large customers began to choose EC, the average customer price increased from 5,000 yuan in 2014 to tens of thousands of dollars now.
Another reason for not optimistic about PaaS practices is timing.
“As early as 10 years ago, Salesforce investment direction was not in the PaaS field.” Zhang Xingliang, who is closely communicating with Salesforce every year, noticed that Salesforce invested heavily in PaaS from 2004 to 2009. Since then, its business focus To convert to the following 3 points:
1. Socialization: Helping businesses connect to social networks, Salesforce enters the Social CRM phase;
2. Dataization: Accumulating a large amount of data with the help of Internet tools;
3. Intelligent: With big data, you can further improve AI, improve efficiency and optimize business.
In recent years, Salesforce has also acquired a number of data intelligence companies, including RelateIQ, Implisit Insights, Tableau, etc., which has positioned itself as a big data AI company.
The new transformation of the giants is because the times are changing.
Since 2012, the first is the maturity of the mobile Internet, allowing traditional enterprises to have a variety of external connections such as WeChat and small programs, and the degree of Internet has deepened. Second, the new AI, IoT, and data technologies have entered the stage of commercialization. First, focus on the front-end links that are more easily transformed, such as information flow distribution, payment, marketing, etc.
The combination of two factors, the integration of various enterprises and information technology has entered the stage of digitization and intelligence from IT, which is equivalent to reopening a new round of reinvention from front-end transformation to back-end transformation.
“When China enters the industrial Internet todayGeneration, what SaaS should do is based on Internet connection to do internal and external business, as well as doing business transformation. Zhang Xingliang said.
But it is worth noting that Zhang Xingliang said that PaaS is a pit and is time-limited. Embracing the order of new information technologies will always go through the development process from shallow to deep and from front to back.
“With digitalization and intelligence, will it be reversed in the process? Yes. But if you refactor the business, you will re-engineer the business process. Everyone will transform the front end of the industrial Internet better. When it will be done to the back end,” Zhang Xingliang said.
And returning to the major customer areas where most SaaS vendors are currently fighting, SaaS vendors are making PaaS, which is almost the common judgment of the head vendors.
The famous Soviet inventor Archie Schuler once said that balancing contradictions is the starting point for all innovative solutions.
A group of SaaS players in China believe that PaaS is a weapon in balancing the “multiple needs of customers” and the “scale development of SaaS vendors themselves”; in order to verify this idea, they have invested more than Imaginary trek.
3. Difficult PaaS
To make PaaS, this imaginary SaaS secondary rocket is not easy.
“PaaS is like an iceberg. Everyone sees only 20% of the above. The remaining 80% is painful and bitter. It is swallowed by people like us.” Red Circle Marketing CMO Liu Haozhong told “Kizi Light years.”
Even if you are doing the staged results on PaaS, you can’t help but squander the “Kizi Guangnian”. The difficulty of doing PaaS “almost makes the company fast.”
“In the past, it will be awesome, and if you don’t go, you will die.” Ji Weiguo said.
The first difficulty in doing PaaS is that it is technically difficult and complex.
Zuo Lun, director of Zoho PaaS, made a comparison. The stand-alone development platform is equivalent to a computing resource for single use, and the PaaS platform can be seen as a network of two hundred machines. The matrix, while providing a programming environment for 20,000 people, the complexity can be imagined.
Zoho has developed a PaaS platform based on its ability to build a network management development platform since 1996 and has opened up various underlying communication protocols. However, it has also experienced key issues in 2009 and 2015 respectively. Version iterations are now able to support dozens of SaaS applications of their own.
In addition, the APaaS that SaaS is involved in needs to be closely integrated with the business, and it needs to overcome the contradiction between the variability of the business and the long-term development of PaaS.
In 2016, the Beisen PaaS platform has been formed, and it can quickly build SaaS applications. However, in the detailed management requirements of HR, such as cross-department assessment and permission setting, there are still