SaaS Notes

Pure SaaS

What, exactly, does a SaaS provider look like? This quirky need of mine for clear definitions stems back to the 90s. I was writing up a network switch report when a key vendor, who was well known for its extremely fast bridges, called and said they were changing the names of the bridges to network switches and wanted to have them included in the report. I developed a red, itchy rash and a penchant for definitions that very afternoon. But I digress…

A pure SaaS provider has the following characteristics:

1. Organization and Culture

A pure SaaS vendor’s organization and culture focuses on subscription-based customer service excellence. The company seeks to maximize value for its clients by delivering application performance and utilization above what can be obtained internally.

The SaaS vendor uses monitoring and analysis to determine specific application performance service quality such as availability, response times and security. However, unlike other software delivery models (ASP, MSP, ISV) the SaaS vendor also measures which applications and application elements are being used. This information provides customers with real usage information and the ability to trim costs. Surely, an ongoing value proposition for firms of all sizes.

2. Physical Infrastructure

This is a big one. There are numerous ASPs, MSPs, and ISVs masquerading as SaaS vendors. When data centers, rack space, servers and revision levels creep into the conversation, you know you are not dealing with a pure SaaS vendor.

A SaaS vendor operates at the Application Layer. Their value is in delivering applications faster, better, cheaper. Some even seek to deliver enterprise applications to non-traditional devices such as smartphones.

The physical level infrastructure should never, ever, nada, nope, never come up in a SaaS conversation. If it does, the vendor is probably transitioning from one of the other business models noted above. Data centers and hosting are outside the core competencies of pure SaaS vendors. They partner for this important expertise.

3. Application Specifics

A SaaS provider builds its applications and users purchase a base + add-ons for customization. In this manner, a SaaS provider is able to leverage its intellectual property most effectively. Other models, such as ASPs, use off-the-shelf applications and client customization is long and expensive.

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