SaaS Blogs

Although SaaS is in and of itself of a unique and powerful model of software delivery, there is much to learn from industry’s that have produced either perfect or imperfect parallels. When I say ‘perfect’ I mean one with a distribution concept that provides a metaphor for SaaS, while ‘imperfect’ is more akin to an industry that has a similar psyche or has equivalent emotional requirements. During SaaSCon, I heard many metaphors and similes tossed about to help clarify what various aspects of SaaS are. Two particularly caught my attention – one was provided by Treb Ryan, CEO of OpSource, while the other came up during the keynote panel I participated in.

Treb had used the banking simile (which has been used before, but I think it highlights the psychological end user/provider nuances quite well) as an imperfect parallel, likening the psychological and trust issues experienced by SaaS providers to those experienced by the banking industry in its early days. He asked the question (I’m paraphrasing) “Do you feel safer with your money under your mattress or in the bank?” Granted, most of us would answer “in the bank”. However, at one time many people felt that putting money in the bank was unsafe – after all, who better to trust with your money than yourself? Someone could burglarize the bank, your money is mixed in with everyone else’s, etc. Once the populous got over the “trust” issues, a complete reversal happened. People recognized that money in the bank was far safer than keeping it at home - and so was born the massive industry we call banking. SaaS poses many of the same trust and security questions, and very much like banking, will prove to be the better model. Now, I’m not saying that “since it happened over there, it’ll happen over here” but it is easy to see that trust issues are by no means insurmountable, and arguably, if trust can be established with money and other liquid equity, I’m sure it can be established with software and data.

During the keynote panel, a question was asked by an audience member that I ended up fielding (again, paraphrased) – “Do SaaS platforms parallel the telco industry where value is controlled across the entire stack by the telco, or is it closer to the electrical grid where value is at the appliance level, which taps into the distributed power.” The question posed a perfect parallel because of the nature of electricity distribution. My response to it was that the electrical grid provides the best parallel for SaaS platforms – SaaS platforms are responsible for providing the foundational aspects of service delivery and management (i.e. “power grid”) while each application defines the actual value to the end user (where an application is much like an appliance). For example, if I toast bread, my derived value, although powered by electricity, is provided by the toaster oven. When a user uses a SaaS application built on a platform like SaaSGrid, the end user value is provided by the application. So where does the SaaS platform fit in? Well, your toaster comes with a power cord – an interface that encapsulates certain expectation. That power cord and any corresponding regulatory mechanics tap into the electrical delivery grid to make toasting bread possible. With respect to telco’s, value (in present form) is generally introduced by the telco and no-one else. Cell networks tend to be closed, and new functionality is introduced by the telco itself. That parallel is not valid – at least not with SaaSGrid; a platform’s goals should not be to monolithically provide value to the end user, but rather to provide all necessary delivery mechanics to the SaaS provider. SaaS providers – the appliance manufacturer’s – know what their respective customer’s want, and can deliver appropriately. The most important thing to realize in all of this is that most toaster’s do not come with their own power sources;-)