The Coffee Thoughts series on ChartMogul is a place for short thoughts and musings on SaaS industry trends. We welcome you to join the discussion in the comments below!
A common theory is that as SaaS and software in general evolves, the kinds of solutions we see change in a cyclic fashion, moving from “all-in-one” solutions to a large number of smaller, highly-vertical SaaS tools (and eventually consolidating again). Right now, some departments like Marketing have to deal with a huge number of standalone SaaS tools to operate an effective stack:
“Based on this there’s talk of moving towards a more “consolidated” world, with a new era of one-stop-shop SaaS products emerging which solve most problems within a space, all under one roof. For example, what if I had just ONE marketing tool to manage all of my marketing activities?”
(I’m quoting myself here. I hope that’s allowed.)
An important point to make here is that all-in-one SaaS solutions are nothing new, and have never completely disappeared. Look at SalesForce (an entire Sales stack), HubSpot (an entire Marketing stack) and more. But these companies really represent the (now mature) winners of the last generation of SaaS and have moved upmarket to cater to enterprise customers.
The scrappy-yet-effective SMB stack
There are newer breeds of SaaS now aiming to offer “full-stack” software, targeting SMBs. But do these smaller startups really want a “full-stack” solution?
For SMBs, big all-in-one solutions have usually been out of reach in terms of cost. What typically happens is that young, scrappy startups put together a functional stack based on a combination of free tools and cheaper small solutions.
- A tool for newsletters
- A tool for transactional email
- A tool for lead capture
- A tool for queueing social media content
- A tool for analyzing social media content
…you get the idea. It looks like a nightmare (and it can be) but there are benefits to this kind of set up. For one, you get to pick the best tool for every single use case. You can also swap out components of the stack as a better tool becomes available, thanks to ease of integration and portability. The ease for doing this has never been greater, with platforms like Zapier (which we’re a fan of at ChartMogul) empowering even non-technical Marketers to plug things together.
All-in-one for SMBs
So as a company offering an all-in-one SaaS solution to these businesses, the challenges are very big and very real:
The pain of switching
Switching away from a custom setup of many deeply-integrated tools can be huge, particularly when resources in the company are scarce. Things will break when you rip out such a setup.
The inevitable feature compromise
This is huge. You’re asking a Marketer (for example) to move from a stack of his hand-picked best-in-class Marketing tools, to a platform that covers a handful of use-cases really well — and the rest with mediocrity. All-in-one platforms are rarely amazing at everything. Jack of all trades, yada yada…
The risk of failure
Most SaaS platforms have a free trial of a month or at least a couple of weeks. That’s great, but in the case of an all-in-one platform, a trial is higher-risk. You can try out the product without paying or committing, but if the trial fails you’re left with a huge task of switching back to your previous setup. These large platforms want to own everything, and they’ll leave you with a large hole when you turn them off.
All-in-one usually makes business sense at some point
Clearly there are other drivers for a business to move to bigger all-in-one platforms at some point as the business grows. The “small tool” approach is likely to break or become expensive at a certain scale, so once the business matures it makes a lot of sense to make the switch.
But for smaller businesses, it’s hard to see the benefit of committing to such platforms.