Exploiting Data as a Value Add in Your SaaS Offering


I just read a great article by Joshua Greenbaum that brushed on the topic of the next iteration of SaaS. Greenbaum identifies SaaS 2.0 as being offerings that use aggregated data across the customer base to extract valuable information that can help any one of the customers individually. This is basically the concept of “benchmarking”. I’m completely in agreement with this concept, and I think it’s worth expanding on the topic. One very important discussion is how to deploy this and is there cross functional value in that data?

From a deployment standpoint, an offering that aggregates data and extracts value from that aggregation needs to offer each individual customer the ability to correlate that data to their own unique landscape and set of processes and metrics. Without taking this additional step, and making this correlation easy to associate and measure, the extracted data could prove to be just that - data.

Second, is the data valuable outside of the application’s customer domain? A SaaS 2.0 vendor should definitely look to other constituents. For example, if a help desk application can show help ticket close rates across the industry and offer to you, a customer, for benchmakring against your own performance metrics, it can use the same data and resell services and analysis to the hardware vendors for which the help tickets were generated against. Hardware vendors can use the SaaS vendors data and analysis to identify everything from manufacturing trouble spots to measuring the repair difficulty of a given product. In turn, this could lead to a community driven quality improvement without the community having to do anything beyond their normal use of their SaaS application.

My interest in this is seeing how a PaaS offering like SaaSGrid can help with this, making the abstraction of benchmarking even more interesting!

Do you see the next wave in SaaS as the exploitation of aggregated data or as something else?

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June 10th, 2008
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Comment Number:
1
Written by:
Andrew Biss
Posted on:
June 11, 2008 at 6:49 am

Google Analytics users raised questions about this idea when Google added the benchmarking feature. Some users started to voice concerns about how much Google knows, and what they might do with their data.

The idea of sharing data across SaaS tenants raises the same sorts of questions. It might be difficult to explain to SaaS users the SaaS provider is using their data in this way, even if the result could be of value to them.

Comment Number:
2
Written by:
Sinclair Schuller
Posted on:
June 11, 2008 at 11:41 am

Andrew,

Excellent point. Many (including myself) many times neglect the privacy ramifications. It’s very appropriate to establish a framework that helps individuals become more comfortable with the privacy aspects if certain contractual guarantees are in place.

Comment Number:
3
Written by:
Abe Sultan
Posted on:
June 13, 2008 at 11:24 am

Andrew and Sinclair,

Agreed, I think that a possible way to incorporate this as part of the SaaS offering could be by allowing their tenants to opt in or out of the service making a concious decition of how their data is treated.

Clearly there needs to be value other than just the data to the people contributing to make this service available and I think that finding that value is the tricky part since it could be very different by tenant or even by industry.

Comment Number:
4
Written by:
Jesse Kliza
Posted on:
June 13, 2008 at 12:30 pm

This is a great topic, and I think far to few SaaS ISV’s are making the most of the SaaS delivery model in this respect.

Not only can data be a value add via benchmarking, but there are hosts of other ways it can be used to add value.

Take the help desk example used above. Think about if the help desk system had a knowledgebase component that not only allowed users to publish knowledgebase entries for their own use, but also for use by any other tenant of the application.

Say Microsoft releases a patch late in the day that breaks certain exchange configurations. Users of the application on the west coast find a solution, and post the solution to the application wide knowledgebase. The next morning, users on the east coast are flooded with tickets related to the same issue, but they have the solution available to them already and can easily resolve the problem.

Just one example of many.

A great example of aggregate benchmarking in action is what Freshbooks does with their Industry Report cards. I’ve written about it here:

http://www.metricz.com/2007/09/freshbooks-saas-through-and-through/

As to the privacy aspect, I think opt in, is the way to go. That is also exactly what Freshbooks does:

http://www.freshbooks.com/blog/2007/04/17/report-cards-faq/#privacy

Comment Number:
5
Written by:
Arthur Lawida
Posted on:
June 16, 2008 at 4:37 pm

I also believe this will end up being a goldmine for SaaS vendors.

We started to work toward this at a client of ours in the ecommerce space. The theory was that aggregated sales data could be analyzed and then pushed back to suppliers to provide sales data and through the websites in real time to provide sales and pricing data in near real-time. We are only at the beginning of the project but it looks very promising.

From the website side of ecommerce, being able to determine upsell, cross sell and relative pricing information from aggregated data could have more value than anything the platform itself provides in cost-savings.

I believe that most clients of the SaaS vendor were comfortable with allowing the SaaS vendor to use this data as long as it remained non-identifying. The ones that complained did so for competitive reasons, not for privacy.

Comment Number:
6
Written by:
Javier
Posted on:
July 31, 2008 at 12:33 pm

Here you have a post about the problem of SaaS integrations.

http://todoondemand.blogspot.com/2008/07/problem-of-saas-integration.html