SaaS Blogs

My last post discussed cost of revenue related to delivering a SaaS-offering to a subscriber base. Shortly after publishing it, I noticed that Gianpaolo Carraro posted this article, which toward the end discussed the relationship between cost and electricity/space within a datacenter. A while back, Gianpaolo described another metric: tenants per database and he described it as “density.” I think that really summarizes the electricity/real estate metric and is the best way to look at any SaaS metric. Drive cost of revenue (and even operational costs) down: maximize your density metrics. As a SaaS provider, you need to identify any “Users per X” or “Tenants per Y” and figure out ways to make that ratio bigger. Doing so will improve cost predictability, buffer against sudden cost change (distribution property), and most importantly it will build your economies. Changing these ratios isn’t easy, however. Most of the time, good density is achieved through advanced application architectures, good infrastructure configuration and carefull planning.

What are you doing to maximize your density metrics? Where are you having most problems? Let us know, we would love to know.