I posted last week about the importance of designing a great User Experience for a SaaS application. As many of you pointed out, this claim is not just for SaaS scenarios and you're right.
Great UX leads to increased productivity, time savings, increased profits, etc. The famous Dell Integrated Desktop case study is a great example of the benefits of an enhanced end user experience and a flexible and dynamic client architecture.
My point is that for a SaaS delivered solution in particular, it might be a matter of life and death. For example, SaaS companies targeting "the long-tail" (small/home based businesses, occasional users, etc.) might find impossible to sell without an adequate user interface (or I'd argue a really appealing and compelling UX).
In many cases, these SaaS companies will be competing with the time-proven, almost fail-proof notebook (the paper one) and the "processes" and "systems" that have been in use for years. Attributes like simplicity, responsiveness, UI appeal (yes, "UI sugar" helps), will be important design tenets in this competition. A phone, a fax and a notebook "just work".
It will be interesting to see how cultural barriers are broken or challenged:
Customer: "I've been successful with my (paper) notebook and my phone for 20 years, why should I use your app?"
The wrong answer:
SaaS vendor: "Our app is multitenant and configurable. You can add any fields and change any workflows you want"
Customer: "multi-what?, oh, but my notebook is also configurable. I can add any "fields" I want too, and it's cheaper, and it doesn't require power, ..."
A better answer:
SaaS vendor: "well, there are many advantages of our application over your notebook in the same way e-mail has advantages over snail-mail. Why don't you try if for 30 days? It's free. If you don't like it fine. There's no risk."
Then UI design will matter as it will be the first impression your skeptical customer will get. If it takes more than 5 min to figure out how to add a new contact, you are out of game.
On the other hand, the technology chosen for the UI will have other implications besides being the foundation for a great experience.
AJAX based UIs, and Smart Clients have an interesting side effect for the hosted side of a SaaS applications, and that is: they tend to make better use of server resources as the requests/responses have a higher "signal to noise" ratio. The communication overhead can be optimized by exchanging what's strictly needed to perform any operation, rather than sending everything else (images, markup, etc.). Therefore, server resources are optimized and more users are served with the same computational power and network infrastructure.
If you want to see numbers, try installing Fiddler and run the tests on pure HTML pages, AJAX enabled sites and comparable (and well designed 🙂 ) Smart Clients.