Delivering a SaaS Application

Its interesting what it takes to deliver a SaaS application. Most people do not understand the depth of functionality that is required to deliver an application in the SaaS model. In fact most people think that an on premise can be delivered in the SaaS model as long as it is multi tenant and it can be delivered over the web. This is the first step to disaster!

If you typically look at what changes, the entire business process right from sales to payment changes drastically. In fact most traditional software companies are simply not ready enough to deliver something in the SaaS model. They usually find this out pretty late that their traditional model of leads, sales, payment, support, Operations and even their engineering process changes!

Lets take sales, the traditional model of sales people going to sell software simply does not scale for the SaaS model. What you would require is the ability for people to simply visit you website, gather as much information and probably click and subscribe to your service. You dont have big time gaps from contact to subscription. What probably would be required is the ability for your customers to try your software out. 

Subscription: Since the customer no longer requires hand holding for your product, the subscription process must be simple, self explanatory and probably would be driven through a wizard where customer requirements are gathered and the customer transparently knows how much needs to be payed and for how long.

Engineering: 9 months or 1 year releases no longer works. There needs to be continuous innovation on the product to make customers sticky. Customer feedback needs to be immediately fed back into the product. This is probably tough on the product since this requires the product to be able to support a lot of customization via configuration. Since customers are accessing the product in a single instance and the product needs to support individual customer needs, there needs to be a lot of thought on how to allow customers the flexibility of a customized process versus the trade off in having a standard product being shared by multiple customers. Continuous Innovation also brings in anoter complexity in terms of operation which I will discuss a little later.

Recurring Billing and Payment: Given the fact that there are companies like Zuora having dedicated billing and payment solutions for SaaS applications, I believe one immediately understands that this is something that is completely unique to SaaS. One needs extreme flexibility in terms of billing a service. A lot of parameters can be used to bill and simple our right fixed billing simply doesnt work in the SaaS model. You need to genuinely show your customers that you are billing them purely on their usage and they can have the flexibility in controlling the usage if they want to. This is a very powerful point in convincing customers to opt for SaaS solutions.

I will explain the othe differences in the next post...

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