SaaS Fans

I was reading another blog today that discussed the use of the SaaS model in the construction industry (SoftwareAdvice.com). I thought it was very informative. Here is an excerpt:

“Moreover, the current recession is making the SaaS model more attractive to contractors because: 1) Subscription pricing can easily be added to a project’s general conditions, 2) Low up-front costs allow project managers to avoid an onerous approval process, and 3) Faster and less expensive implementation makes new systems more digestible.”

I couldn’t agree more. The SaaS delivery model is here to stay because it is simply a more efficient and cost-effective model than the on-premise software delivery model.

Over the past few years, I have managed several SaaS development projects. For some of these projects, the team composition worked very well; for others, not so well. After reading the book entitled “Getting Real” by 37 Signals, I am convinced that a “less is more” approach is best. So, without further adieu, here is what I would consider the best team composition for not only a SaaS project but for any web application development project.

The Product Manager is primarily responsible for drafting the requirements. Ideally, the Product Manager is a “visual thinker” and graphic designer who can illustrate the requirements and build out all of the design elements and graphics (for more information about illustrating requirements click here). Developers should be able to build directly from the requirements. Requirements must be “signed off” by the Product Owner before development commences. The Product Manager also assists with the launch of the product, including training, user guides, marketing, etc.

The Product Owner is the business person ultimately responsible for the product. She works closely with the Product Manager to ensure that the product is being designed correctly and that her vision is being realized. The Product Owner has the final say in design decisions and reviews and approves each completed feature.

The Development Manager manages the development team and ensures that each developer is productive and that the team hits its deadlines. In addition, the Development Manager is responsible for architecture, database design, resource allocation, task management, coding standards, release management, application configuration, IT, and quality control.

The Development Team consists of Developers and Testers. They are responsible for coding the application and keeping it bug free through continuous testing. Ideally, all of the design is done by the Product Manager but there may be a need to also hire a Designer.

That’s it! No need for expensive specialists such as architects, systems analysts, DBAs, scrum masters, database designers, release managers, etc. Instead I recommend hiring generalists as managers who can wear multiple hats and only hire specialists for the actual coding.

Data Aggregation

Ok, I know I said I wouldn’t talk much about the benefits of SaaS because we want to focus instead on design and implementation in this blog, but there is one important benefit that is often overlooked and under appreciated; data aggregation. Inherent data aggregation is unique to SaaS, and can only really be accomplished efficiently with a multi-tenant model.

Data is quickly becoming a valuable asset. Many companies base their entire business models on the quantity and quality of their data. But in order for that data to have real value, it needs to be aggregated, analyzed, and presented in a meaningful way. Vendors/ISVs of SaaS applications are sitting on loads of data entered by thousands of customers. With a multi-tenant model, this data is already aggregated and ready to be mined, analyzed, and presented. Of course, one of the challenges is that the data must be “de-identified” and “anonomized” before it can be presented, but this is a relatively simple process.

Imagine for a moment a SaaS application for grocery stores. Many different grocery stores use this application to track and manage their inventories. Now, suppose that one of the grocery stores (maybe from a large chain or maybe a “mom-and-pop” store) wants to compare its restocking times for specific items against other grocery stores of similar size and geographical location. Well, this grocery store is in luck because the software vendor has provided, as one of the benefits of this inventory management SaaS application, a de-identified report comparing restocking times, in aggregate, of each store with other (competing) stores. Basically, this equates to an industry “trend analysis” report, but it is much more relevant, timely, and trusted because the data is real-time, localized, and generated directly from the source. Other types of companies, such as healthcare providers, could benefit from comparing results of their surgical procedures against a de-identified, aggregated group of similar providers. This powerful feature can provide a compelling advantage for a company to “purchase” a multi-tenant SaaS application over another type of application.

Another opportunity for the SaaS vendor is to sell rights to view and mine data to 3rd party companies. With the right tools, 3rd party companies can have access to robust trending data and possibly even discover new trends that haven’t been previously considered within the vast amounts of data.

And, why not consider placing ads within the SaaS application itself, like FaceBook does? SaaS vendors could lower the fees they charge in exchange for the acceptance of ads (just like Gmail). These ads could be highly targeted based on the data that has been aggregated and analyzed behind the scenes.

One possible hangup in this whole strategy is that customers want to “own” their data. This is understandable. But, there is no reason why customers wouldn’t agree to let their vendors use their data in an anonomized and de-identified manner, for legitimate business purposes, especially when it provides value back to the customers.

So, wake up SaaS vendors/ISVs to the inherent data aggregation benefits of your mutli-tenant SaaS applications!