Thursday, July 9, 2009

Building SaaS for ISV's - Multiple Deployment Modes

Let's talk about Independent Software Vendors. Like any business out there, they probably have the following goals:

  1. To grow their business
  2. Maintain competitive advantage
  3. Create new market opportuniites

So what's stopping them? Here's what:

1). The global economy is in deep recession - AND there is a proliferation of app platform choices out there - there has never been so much at stake for ISV owners as now.

2). The market for packaged applications is undergoing a fundamental transformation. Customers are looking for "just what I need" solutions - in terms of pricing, functionality, simple on-boarding and minimal infrastructure hassle. Demand for Internet delivery (SaaS or ASP models) is therefore continuing to grow while sales of traditional on-premise solutions are declining.

3). The growth of SaaS giants like Salesforce.com are causing many ISVs to lose their footprint in the market. Alternatives to SaaS are few and not as elastic. While it is possible to deliver existing solutions over the Internet using virtualization technology (Virtual Machines and Terminals - VM & Citrix), these do not provide economies of scale, and redeveloping applications as multitenant and elastic is costly and long.

4). The wealth of technologies out there means that more customers are leaving for sexier applications as competitors become more innovative. Technology can kill an ISV's business in their attempt to keep up.

SO, it seems like ISVs would be well advised to create a SaaS offering: It's cheaper for their customers to acquire since it's based on subscription rather than licencing. And it uses rich internet application technology - providing users with the type of functionality and experience that will satisfy their business needs.

The only problem is how to build a SaaS cost-effectively, AND how to handle the fact that the revenue trickle from SaaS may create a severe cash-flow shortage during the first years of a SaaS operation - until the ISV brings on a critical mass of new customers.

For ISVs to remain competitive and viable in their move to SaaS, they therefore need to continue their on-going sales model (based on the on-premise Client-Server App) in parallel to building up the SaaS operation.

That's where uniPaaS makes a handy entry:

uniPaaS allows the same application to be deployed both on-premise and on-demand.

This means ISVs can continue to earn license revenues (for now, the lion's share of their business) while at the same time building a new customer base on a SaaS model developed and maintained on the same code-base as the original on-premise app! (ie. Pay for only ONE development and maintenance effort - and get TWO deployment models).

ISVs would additionally gain from uniPaaS because it:

  • re-uses business logic from existing components rather than forcing you to undergo an entire re-write;
  • minimizes the amount of development by providing pre-programmed commonly used functions (see the metadata arguments in the previous few posts);
  • enables multi-tenant SaaS deployment without the need for multiple programming skills.

We live in interesting times.. and it will be particularly interesting to see which ISVs have the strategic insight to invest carefully in SaaS despite the recession. With the strategy outlined here its vitually a no-brainer for ISVs looking to grow their business and becoming major SaaS contenders themselves.

To read more follow the link: What's unique about uniPaaS