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Jama Software Chapter Recap: SaaS Adds Interesting Dynamic To Purchasing Decisions

In a recent blog post, we shared how the Zylo team wanted to hear directly from other CEOs and CFOs think about SaaS in their own organizations. So we created a series of blog posts where we detail interviews from five veteran software executives and explore what they believe the future of cloud software will hold.

Each week for the next 2 weeks, we’ll share a portion of each of the interviews. In this week’s post, we’ll highlight Scott Roth, CEO of Jama Software, and will share what he believes the future of the subscription economy will look like. Miss last week’s recap? Check out what Steve Cakebread, CFO of Yext had to say.

How Jama Sees Itself In The SaaS Space

Ironically given Scott’s SaaS background, Jama was originally an on-premise company selling perpetual software licenses with ongoing maintenance and support, but has since added a pure SaaS offering and has moved all of its licensing to subscription services.

Today, the majority of new sales are SaaS and the rest are on-premise installations as Jama does business with large enterprise corporations that have sensitive intellectual property housed within Jama. When Jama was founded, the company helped small product management teams collaborate on software development. But now, Jama works with some of the largest and most complex products and systems in the world, specializing in companies that deliver hardware, software, and connectivity together in one product, such as medical devices or automobiles.

Scott explained that moving upstream to an enterprise focus, transitioning from perpetual to subscription licensing, and from on-premise to SaaS was a massive undertaking for Jama. In the process, they secured several enterprise clients that had thousands of concurrent users, so it’s no surprise that it was a monumental project.

And what’s more impressive is that the company made the transition within just the last 3 years. Now, Scott explained, “It’s all about scale and growth for the business. How do we go big and dominate the market? The product development space is opening up so wide because every single company with a physical product has to figure out how to build software and connectivity into its offering to meet the demands of today’s consumer.”

Jama As A SaaS Buyer

When it comes to making decisions on new SaaS applications, Scott explained that at Jama, the decision is initiated at the departmental level and then funnels into a central Finance and Business Operations team to figure out if the company already has a solution that can accomplish what’s needed. At Jama, departmental leads manage their own budgets, so most of the spend falls within departmental decision making processes unless the spend is significant, in which case the executive team weighs in on the decision.

What is The Future of the Subscription Economy?

Scott believes that SaaS will continue to evolve, especially as companies and those with sensitive IP get even more comfortable with data being stored in the cloud. He commented:

“At Jama, just over the past few years we’ve seen more and more enterprise clients become comfortable with the cloud. Even some of the largest enterprise companies are transitioning data from traditional on-premise software to SaaS solutions, but the process can take years.”

Scott added that, for Jama customers, the majority of support tickets are for on-premises installation, updates, and maintenance, none of which are applicable to the SaaS portion of its business. This alone requires a different level of support than for hosted customers, and oftentimes additional resources.

With the increase of more and more cloud companies and products available to the market, Scott believes it is causing an interesting dynamic in how purchasing decisions are made:

“People from various departments with no experience buying software are now buying SaaS solutions all the time. And some of those individuals are unknowingly making bad decisions. And in other cases, organizations know they have dedicated budget for additional purchases, so they don’t think twice about adding new software to their tech stacks. On one hand it’s great because we are seeing purchases of Jama coming from several different departments, but on the other hand it’s more challenging because every company seems to take a different approach to purchasing.”