I recently updated my laptop to a top-of-the-line system with an Intel Core 2 Duo running at 2.5+ GHz. This is technically five times faster than my laptop a few generations back. But while it is certainly zippier, it doesn't feel five times faster. A similar mismatch between raw technical performance and perceived performance can also occur in SaaS. But in SaaS, low perceived performance will mean customer churn.
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I was recently asked an interesting question from a prospective new client. They wanted to know how we could successfully design mission critical software across such a tremendously diverse range of applications - from detecting cancer cells, to completing bond trades to, to generating payroll to notifying college students of emergencies. The answer is deceptively simple - we focus on what we call "high value scenarios" and systematic user validation.
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User experience is voguish to talk about, but the meaning is often poorly defined and consequently undervalued. Many development teams equate it with application ease-of-use or branding/visual design and marginalize it relative to the functionality of the core application - nice to have - but not a key business driver. This perception however, could not be further from the truth. When it comes to differentiating your SaaS, user experience IS the product. The alternative is commoditization.
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Over the past few months,there has been a lot of news stories and articles about hosted services over the internet. The various terms that describes these offerings - SaaS, PaaS, Cloud Computing, On-Demand - are often used interchangeably and the meanings can be confusing. So I thought it might be useful to briefly describe each term from my own perspective of enterprise software application strategy and design.
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Last time I checked, the point of running a software or services business is to make money. But very few companies have done so yet in the SaaS space. Admittedly, SaaS is still at a relatively early stage of market development and acceptance, but the question still remains: for businesses that are providing SaaS solutions to enterprises and SMBs, how can they be profitable? What is the secret sauce?
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I've been arguing for a while now, that creating a Web-based version of a desktop or server-based product is only part of the battle if you plan to deploy SaaS in the enterprise space. This core application is just one component from the array of user experiences that need to be addressed when deploying or selling any enterprise application. Just how important are these other user experiences? While I usually try to write things from the point of view of our enterprise clients, this time I thought I would share some personal anecdotal evidence in the consumer space.
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The iPhone 3G and 2.0 software were released last week. As I perused the new App Store it struck me how the iPhone will impact the strategy and design of web and SaaS applications at the enterprise level. The iPhone is just the very visible beginning to an infinite variety of future form factors for internet-connected devices and applications. What this means for application strategy and design is that you cannot count on the guaranteed luxury of screen real-estate, input devices or processor speed.
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Having worked with a significant number of organizations on SaaS strategy and design, I see a pretty clear picture emerging of factors that define the winners and the losers. So what makes a winning vs losing SaaS when it comes to profitability? The basics are pretty simple: you need a stable cost structure that is below the subscription revenue stream.
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In late spring of this year, I received an email from M.T. Hoogvliet, a student of Interaction Design in the Netherlands. He was writing a thesis on SaaS Interface Design with a goal to develop a set of user interface guidelines for Software-as-Service web applications. His thesis, available here for download, helps fill a gap in the literature that exists for SaaS UI guidelines - user interface design principals that exist in a world between those for the desktop and the web.
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Catalyst, like many companies, has been making an active effort to "go green" - recycling, CLFs, composting, using mass transit, etc. But it was the redesign of our internal web collaboration solution as a SaaS with an RIA interface that had the most significant impact. Our latest green audit tracked a reduction of 21,000 lbs of CO2 per month, while simultaneously reducing expenses and increasing billable activities by nearly 20%.
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RIA are a big deal and arguably the future of application deployment. Indeed, almost all of our enterprise application design and SaaS is deployed using RIA technology such as AJAX (BackBase, YUI, ExtJS, GWT) or Flex. We have even done prototype work in Silverlight 2. Now we are looking at SproutCore. While there is definitely developer wrangling over which "platform" is the best to use, what is clear is that RIAs are a pivotal component in the success of enterprise application deployment.
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We have proposed that to be successful, profitable, and scalable, a SaaS must address most aspects of the customer life cycle in software. In some cases though, it is not practical (technically or politically) to migrate specific components of their existing customer life cycle support services, into the software. This poll asks our readers to describe and comment on which features are the most challenging for them to migrate.
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The online channel is a growing priority for financial services firms as they try to compete for customer loyalty, retention and profitability. Rich Internet Applications and SaaS can provide the superior service and visibility that keeps customers and increases growth. The key to success is not so much what the new services do, but how they do it.
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Banks are in a unique position to offer their corporate, small and medium business (SMB) customer a range of integrated business services using SaaS and RIAs. Customers may not perceive their bank as an innovative and cost saving software provider but Internet banking already has good market penetration and banks have the potential to be a SaaS provider of choice for other business services. The key to success will be to develop reusable UI components and to address the full customer life cycle in software.
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Twice last week I went out to dinner. At one place the food was exceptional and at the other it was merely good. Can you guess to which restaurant I plan to go back? A good restaurant knows that their company's "product" is the food, the pre-, during- and post - service, and the ambience of everything from the foyer to the bathroom - in other words, they developed their product to address the full customer life cycle around the dining experience.
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I was invited to participate in a roundtable on "Enterprise software - The Online Revolution" at the Red Herring North America conference a few weeks ago. I took some brief notes I wanted to share on how other other CEOs/CIOs are viewing the changes being mandated by the inexorable migration to SaaS.
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For most on-premise applications, the software is a black hole when it comes to information about user adoption and feature usage. But a SaaS application can continually monitor when and how the software is being used, or perhaps more importantly, when and where the customer stops using it. A profitable SaaS should be designed to monitor of all phases in the customer life cycle and to use this information to correct drop out points, and ultimately increase sales.
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In traditional enterprise applications, most phases in the customer life cycle are managed by people and services outside of the "core" application. In SaaS these phases are all handled as part of the application.
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Catalyst Resources & Backbase to Present Webinar on Fast Tracking AJAX Rich Internet Applications
Aug 11, 2008
Catalyst Resources uses RIAs and SaaS to shrink carbon footprint by 21,000 lbs of CO2 per month
Jun 26, 2008
Catalyst Resources and Backbase Announce Business Alliance
Apr 23, 2008
AJAX Toolkits Wiki Helps Developers Evaluate UI Components for Building RIA User Experiences
Mar 20, 2008
Catalyst Resources to Present Webinar on the 9 Key Elements of a Successful SaaS Strategy
Mar 17, 2008
Xythos Enlists Catalyst Resources for “On Demand” SaaS Application Design and AJAX UI Strategy
Mar 06, 2008
Catalyst Resource’s Paul Giurata to Speak on Software-as-a-Service at Red Herring North America
Feb 14, 2008
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