3 Keys For A Successful SaaS Application

Software as a Service (SaaS) applications are reaching a level of full business saturation and maturity.  As a sign of how widespread SaaS has become, examine this breakdown of all of the leading apps in analytics, collaboration, CRM, demand generation, document management, finance, HR, and social enterprise.  Given that there are dozens of providers linked above, it is not a surprise that Gartner has predicted the SaaS market to reach $22.1 billion in 2015.  With this market veering toward a winner-take-all model as well as being set to explode, let us take a look at some of the keys to a successful SaaS app.

Adapting to SaaS Development Practices

While on-premise and local network applications have been built upon distributed models, successful SaaS applications benefit from patterns that go beyond successful network app practices.  For example, contributors engaged in extensive app development with the Heroku service have leveraged their experience witnessing the success and failure of many SaaS deployments in order to author a set of guidelines known as The Twelve Factor App.  Discussing all twelve factors is beyond the scope of this article, but they include practices that are usually negotiable on traditional enterprise systems but essential for SaaS.  They include configuration entirely based on environment, treatment of all backing services (such as databases) as interoperable resources, and the statelessness of processes.

Living Up to the SLA

Service level agreements (SLA) are varied, complex, and can often be skewed in the favor of the provider rather than the client.  However, an SLA needs to be realistic or else it can become a detriment – the resources to supply the maximum number of “9s” in the uptime may simply be beyond a company’s ability to deliver.  Also, the business world is becoming wise to the variance between SLA and availability level that occurs in practice.  Much like restaurants having to deal with Yelp reviews, SaaS providers must deal with the client-driven reports of their ability to deliver, which means upholding any SLA is essential to a good reputation.    

Adapting to the Service-Based Business Model

Speaking of reputation, it is important to remember that the SaaS business model is about retention (churn).  This detailed look at SaaS metrics that are meaningful for a provider brings home the point that clients can mean a large upfront cost for a provider to procure, and success or failure rests upon the ability to turn as many of them as possible into long term sources of cash flow.

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