Software as a Service has quickly become the preferred method of application delivery and consumption. Why is it that while many ISVs claim to provide some flavor of SaaS today, few are doing it with the same cost of delivery profile and operational agility as SaaS leaders like Salesforce.com, or Taleo?

Join Apprenda and Savvis on August 9th at 1:30PM EST for a webinar covering the most dangerous pitfalls that ISVs fall into time and time again. You’ll learn:

- The unprofitable truth about the ASP model
- Why multi-tenant infrastructure isn’t enough
- The real-world economics of SaaS leaders and laggards
- How to avoid building dozens of custom SaaS operations systems
- Key business and technical pitfalls when making an infrastructure choice

You’ll come away with everything you need to either “save the ship”, or leap frog your competitors with a SaaS strategy that rivals the best of the best.

Date: Tuesday, August 9, 2011
Time: 1:30 PM – 2:30 PM EDT

Register Here>

We hope you’ll join us!

If you’re a software engineer or architect, what does the cloud do for you? It’s elastic and infinitely scalable, so you just put your app up there and everything magically works, right? The cloud solves all of your scalability challenges, all of your app delivery challenges, and it just plain works, right?

Wrong. You’re the one responsible for building the software that the cloud exists to host and deliver, and you know full well that there’s a lot more to it than that.

What about onboarding new customers or business units to your app?  The individual end-users – how do they get access, and to what are they entitled?  What about charging for different features, or different transactions?  What about managing the application lifecycle, and rolling out updates?  What about the underlying architecture to make use of the cloud in an intelligent way?  To actually take advantage of the raw compute power at your disposal, and not just use the cloud like it’s the late 90′s again and people are throwing their apps online like it’s going out of style.

These are the types of things that software engineers and architects are thinking about.

Haven’t we been through this before?

There are many significant engineering challenges associated with building and delivering applications today.  This is very similar to when we first started developing applications for the desktop PC.  Back then, everyone wrote code to manage memory, to interface with specific hardware, etc.  Then the desktop OS came along, and made all of that complex and time consuming (but CRITICAL) work a thing of the past.

While the challenges themselves were different, they were still challenges that were specific to the delivery method, rather than challenges associated with building the actual software functionality.  Those challenges will always be there, because the passion to innovate and develop applications that help facilitate better business performance, and meet the needs of end users is what drives great engineers/organizations.  HOWEVER, the challenges associated with the delivery method/paradigm go away in time, as layers of abstraction come about to solve those problems for us.

The “Cure for the Common Cloud” is Here

Now let’s get back to today.  Shouldn’t we expect that all of these challenges associated with building and delivering next generation software applications in this new cloud era will become a thing of the past?  Won’t we be able to focus on building great software again, and not worry about all of the complexities of the delivery method?  Someday?  Maybe?

Yes.  We can today!

A large and increasing number of organizations and developers have discovered the “Cure for the Common Cloud“.  They’ve found the abstraction layer that handles all of the complex engineering challenges associated with building and delivery applications today, and truly leveraging private or public cloud infrastructure in an intelligent way.  They’ve found the one technology that decouples apps from infrastructure, developers from IT/Operations, and business execution from IT implementation.

The Cure for the Common Cloud is here.  Do you have it?

Not Anymore.

For SaaSBlogs readers who are interested, we are holding a joint webinar with Microsoft this Wednesday (March 30th) at 1:00PM EDT to dig into these challenges and the latest solutions available today that you may not be aware of yet.

We’ll be joined by Microsoft’s Eugenio Pace, Senior Program Manager – Patterns and Practices, and co-author of A Guide to Claims Based Identity and Access Control, along with Apprenda’s VP of Client Services, Matt Ammerman.  The event will include a discussion and real world demonstration of how the Microsoft family of technologies is leading the charge and making these challenges a thing of the past. You’ll also get an inside look at how SaaSGrid enables drop in federated identity and claims for .NET applications.

If you are interested, you can register here:  https://www3.gotomeeting.com/register/976980454

Event Details

Date: Wednesday 3/30
Time: 1:00PM EDT
Location: online
Registration: https://www3.gotomeeting.com/register/976980454

Agenda

- Introduction to Claims Based Identity (Principals and Architecture)

- Key Problems Solved By Claims Based Identity

- Current Standards and New Powerful Tools

- Ground Breaking Drop-in Federated Identity and Claims Enablement for .NET applications via SaaSGrid (Live Demo)

As a SaaS provider, you pay for it one way or another, it’s a known, sunk cost of doing business and a part of your Customer Acquisition Cost (CAC). However, how large a part of your CAC it is depends on a variety of architectural and operational factors, as well as your maturity level in both areas.

Operationally

At a high level, a free trial process will typically look something like the following:

Now, let’s briefly break-down typical approaches in each of the three high-level operational phases:

Processing Trial Request

Manual – A prospect places a request with a sales rep or submits a request form via a SaaS provider’s website, which is then emailed to someone to process and pass along for provisioning.

Automated – A prospect submits a request form via a website, which is then automatically validated and the prospect receives some form of confirmation of their access (either the actual access, or a follow up email shortly thereafter).

Provisioning Trial Account

Manual – After the request is processed, someone (or worse yet, multiple people) are responsible for provisioning the trial account access. This can range from as manual as people coordinating with one another to setup a new machine or image, to someone clicking a few buttons to provision the account, and everything in between.

Automated – After the request is processed, the account is provisioned automatically, without any intervention. This could mean automatically spinning up a new VM image, creating their username, password, new DB and account, or simply granting them a subscription with proper entitlements to the application (same single DB as production customers … same everything).

Now, I know there will be people that say, “My application is far too complex to provide automated provisioning.” For a great breakdown of why automated provisioning will work in almost all scenarios, check out this post from Sinclair.

Transitioning Free Trial to Paid Account (with data if necessary)

Manual – The trial period is up and the customer wants to move to a paid account. They somehow communicate that to their SaaS provider, and in the worst-case-scenario they need to provision a brand new account, via one of the manual provisioning approaches listed above. Then, if the customer would like to keep their existing account data, customizations they’ve made, etc., their provider will need to migrate those to the newly provisioned account, as well.

Automated – The trial period is up, and best-case, the customer has been reminded a few times in advance of the trial period coming to a close (either via email, or somewhere in the product itself). They’ve decided they want to move to a paid account, so they simply choose the paid plan of their choice from a screen, input and submit their payment information, and they’re back in and using the product – same account, same data, same everything.

Of course, the entire process is much more costly if the end result is a negative outcome – where the user wants to shut their trial down, and isn’t interested in purchasing!

Architecturally

Depending on what level of resource allocation you have for each free trial account, this will, of course, factor into the cost of providing free trials to your users as well.

Physical Machine and Stack Per-Trial Customer – This extreme option entails setting up a physical box with a full application stack, associated licenses, etc., per trial account. This is the courses grained resource allocation.

Virtual Machine and Stack Per-Trial Customer – This entails spinning up a virtual machine image with a full application stack, associated licenses, etc., per trial account. In this option, there is hardware resource sharing, but each trial account requires its own virtual machine, and licensing costs.

Separate Database Per-Trial Customer – Here, there is hardware resource sharing, sharing of the application instance itself, but each trial account requires its own separate database.

Subscription to Single Instance, Co-mingled Data Application – Here, there is fine grained resource sharing, with each individual trial account having little to no incremental resource cost.

Once again, if the outcome of your free trial is not a customer win, having to manually reclaim physical hardware resources (in the most extreme case), each time a free trial ends is that much more costly.

Free trials are a great way to get the product you so lovingly promote in the hands of your potential customers and, if done right, gives them an experience that they can’t live without when the trial is about to end. Making this process as frictionless for you and your prospective customers, and cost effective as possible is a must. It won’t be “free,” but it CAN be pretty close.

I’d love to hear what others have done, and how they’ve managed to implement free trials successfully.

Jesse is responsible for the creation and execution of Apprenda’s strategic marketing initiatives, generating demand and awareness, and evolving the company’s brand. Jesse draws from a strong background in Software as a Service, having served as Community Evangelist and Product Manager at SaaS ISV Autotask before joining Apprenda. Prior to Autotask, Jesse served as Director of Marketing at Eden Communications (acquired by Unicom Systems). Jesse holds a Bachelor’s Degree in Information Technology, with a focus in Neuroscience from Rensselaer Polytechnic Institute.

SaaS provides an opportunity for ISVs to create something far more valuable than just software functionality that’s delivered online.  It provides them an opportunity to become the center of their industry by leveraging the “SaaS network effect” – but it takes creativity, scale, and the right architecture to support it. (both business and literal software architecture)

Just yesterday, Max Bleyleben of Kennet Partners blogged about the aquisition of one of their portfolio companies FRSGlobal to Wolters Kluwer.  He made a great statement about this notion that leveraging the SaaS network effect is something that ISVs should be doing, as it provides much more value to the ISV above and beyond the surface level benefits of SaaS that everyone talks about:

“The first wave of SaaS companies moved traditional enterprise applications (eg CRM) onto a hosted platform. The next generation combines delivery of software functions with proprietary content — eg domain databases, analytics, benchmarking data. Without unique content, most SaaS businesses will be commoditised away. FRS had worked out how to codify statutory regulations in 40+ countries into useable, actionable templates that banks could use to manage compliance. Most important, however, FRS’s domain experts around the world continually maintain this content, effectively providing ongoing ‘compliance insurance’ to customers.”

My favorite part of his statement? – “Without unique content, most SaaS businesses will be commoditised away.”

Who Gets It?

Companies like Salesforce.com with their purchase of Jigsaw, and Freshbooks with their quarterly report cards are two examples of companies that get it.  The great news is, there’s still so much innovation to come in this area!

How are YOU leveraging the value of your userbase/domain specific data, to differentiate and deliver added value?  What other SaaS companies do you think are doing this well?

We just yesterday released a brand new white paper entitled “Understanding the Cost of Becoming a Sustained Market Leader in the Software Business Through Software as a Service”, that we thought the community might be interested in. It’s vendor neutral, no product pushing, etc, and we’ve gotten great feedback thus far.  As always, we’d love to hear your thoughts, so please speak up! :-)

You can access the full white paper here.

Topics covered include:

- What it means to be a SaaS provider
- The importance of highly efficient SaaS architecture
- Optimal strategies for achieving the SaaS stack maturity necessary to become a sustained market leader

The paper begins with an overview of providing a SaaS offering, the primary infrastructure and delivery costs, and the requirements for market leadership before proceeding into the complexities and benefits of single-instance multi-tenancy and a critique of several compensatory strategies. The paper then concludes with an explanation on how cloud middleware can solve these architectural problems thereby achieving the benefits of building your own multi-tenant stack without the onerous upfront R&D costs and long time-to-market or the poor customer management and lock-in deficiencies normally associated with leveraging Platform as a Service (PaaS) offerings.

Here’s the link again to access the full white paper.

Should you have any questions or feedback on the whitepaper, please let us know.  We hope you find it to be a useful and informative read!

- Jesse

For those of you that couldn’t make it, Abe recently wrote a great article for Datamation that included much of what was presented.  You can check it out here.

Alternatively, if you’re already pretty competent in failing as a SaaS company, we have just what you need to become a bonafide SaaS superstar. :-)

- Jesse

Everyone wants users to tell them how great their product is and what could improve. But what if rather than just going to market with a slightly better product, you could also go to market with a keen awareness of how your target market will be evaluating your offering? This isn’t the easiest thing to do, and in order to do it, your private beta needs to be structured with this objective in mind. It can’t just be “use it and tell us what you think”. You should have a set timeline for the private beta, with well defined milestones and feedback loops, just like any other project.

Here are 3 major things to consider that should help you on your way:

1) You want to understand what the private beta users expectations are going in, before you provide them with access. You want to understand what they hope your product will do for them, what they think it will do for them (based on your website, the information you’ve given them in the past, etc), and why they are interested.

2) Next, you want to understand their immediate first impression. When they initially are provided access, what did they think? What questions did they have immediately? What impressed them right away.

3) Further on, you want to understand the reasons that these users find value in the offering.

Capture this information, document it, analyze it…etc.

Ultimately, you want to understand what you can do to keep your future customers engaged and extremely successful at every point of their relationship with you. When they initially contact you, when they are evaluating your solution, when they sign on and begin using your product, AND hopefully when they are evangelizing your product to others.

BONUS: Here’s an example of a first step and email to kick things off:

Send a precursor email or call (depending on your participant numbers) that tells them that you are preparing to open up access to them in the coming week, but that first you would like them to tell you why they are interested and what they hope your product will do for them. Ask them to simply respond, so that you have some real data about their personal expectations and hopes for your product.

EXAMPLE EMAIL TO SEND FIRST:

Hello _______, Thank you again for your interest in <INSERT YOUR PRODUCT NAME HERE>. We are excited to inform you that next week we will be providing you access to <INSERT YOUR PRODUCT NAME HERE> in response to your interest in our Private Beta. Before that time we would like you to simply respond to this email and tell us why you are interested in particpating, and what you hope <INSERT YOUR PRODUCT NAME HERE> will do for you. We are collecting this data now, before you see <INSERT YOUR PRODUCT NAME HERE>, so that we have an understanding of what your personal expectations and hopes for our product are. Our goal is to make our customers/users wildly successful. Understanding your expectations prior to your initial impressions will help us to better hone our messaging, so that we can communicate the value of our offering most effectively. We greatly appreciate you taking the time to respond with this information and we look forward to working with you.

Going From SaaS Product Idea to Paying Customers in Under 6 Months (WEBINAR)
When: September 25th, 2009 at 1:00PM EDT
Where: Register Here!

This will be a great event.  You’ll have an opportunity to hear from Nate Rowe, CEO of Appoint IT, who recently launched their product offering, and was able to go from a product idea to paying SaaS customers in under 6 months by leveraging the SaaSGrid SaaS Application Server.

You’ll also get a chance to hear from Luis Aburto, CEO of Scio Consulting, and myself.  It will be a great discussion, and you’ll see why SaaSGrid is quickly becoming the solution of choice for ISVs large and small as they make the move to SaaS.

You can find out more details about the event, and register here.

“How to Fail Miserably as a Cloud Software Provider” (NETWORKING EVENT)
When: September 22th, 2009 at 6:00PM EDT
Where: Public House, New York City

This will also be a great event, and an opportunity to network with some movers and shakers in the SaaS and Cloud Computing space here in New York.  You’ll also have an opportunity to hear from Apprenda CEO Sinclair Schuller, and he’ll be delivering a presentation entitled: How to Fail Miserably as a Cloud Software Provider”.  If you’re in the area or can be, you won’t want to miss it!

You can find out more and let us know you’re coming here. We hope many of you can join us!

- Jesse

We had a great turnout last week for the webinar, and a number of people have asked if they could get access to the recording, so here it is. I’ve also compiled a list of some of the question from the Q&A session here, along with the answers.

Q&A

Q: We have our app completed, but are working on the provisioning/billing parts (hard for us). Can SaaSGrid provide a sandbox for our app such that we can deploy one copy of the app per customer? – our app is .net based and is a web application already. For us, our value is in our s/w, not in building special purpose billing systems

A: Absolutely, you can register for access to the SDK and a Sandbox account here. 

Q: What are the on-going cost advantages of using a PaaS like SaaSGrid?

A: Applications built “from the ground up”  without a PaaS incur massive ongoing R&D and maintenance expense. Your R&D team will have to manage the code base, fix bugs, and maintain the layer. This is expense will generally become disproportionate to the R&D of the actual app on an ongoing basis. Second, a home grown SaaS stack will normally reach a “freeze” point where no new added functionality is added. A PaaS is constantly looking to evolve and inject new value into the applications and business it hosts. A PaaS provider can help drive revenues up and costs down without the participation of the ISVs it works with. Last is flexibility. A PaaS environment is built to be horizontal and support any application. Good PaaS offerings like SaaSGrid also offer commercialization tools, lifecycle management tools, and support tools that become part of an ISVs day to day.

Q: What approximate effort is needed to make existing hosted applications into SAAS. Is the architecture to be re-designed or can be used as it is?

A: It depends on the application, but utilizing SaaSGrid, some existing application can be deployed as a pure multitenant SaaS offering with out any effort.  Others may require modifications before they can be deployed.  SaaSGrid does not require any proprietary work to be done to your application, it simply requires that you’ve adhered to current best practices for architecting your .NET application.

Q: What about ISVs that already have a J2EE application?

A: Currently, SaaSGrid is specifically focused on .NET based applications 

Q: What happens if the PaaS provider goes out of business?

A: Depends on the type of PaaS provider. If it’s a “custom stack PaaS” that has its own programming languages, the scenario is dire because the code can’t work anywhere else. Existing language/runtime PaaS offerings like SaaSGrid allow you to run your code on-premise, which at least lets you recover your application even though it won’t be a SaaS offering. At Apprenda, we’ve focused on a disaster recovery plan where our cloud partners that run SaaSGrid will continue to run the platform for a significant period of time, thereby mitigating any disaster scenarios and giving the ISV the ability to continue business as usual.

Q: What is the typical cost and timeframe for developing a SaaS application?

A: Depending on the complexity of the application, the SaaS aspect of an application can take up anywhere from 30%-70% of upfront development time and account for roughly 30% of ongoing costs and development effort. 

Q: What if my application is running on a different environment – can I still use SaaSGrid to manage my business (subscriptions, etc.)?

A: Currently, no. SaaSGrid exploits the fact that it manages the environment the applications run in to provide much of the business management aspects like metering and subscription based authorization magically, without writing a line of code. A huge amount of value exists in running within SaaSGrid that normally provides rapid ROI on time and money invested to moving to the SaaSGrid environment.

If you’d like to mingle with others in the SaaS space, the SaaSBlogs group on LinkedIn now has 1730+ members and it’s growing every day; make sure you are not missing out and join today.