The key takeaways are:

1) Identify, test and plan for each step in the customer life cycle where “fallout” is most likely to occur.
2) Define a strategy that keeps operational costs steady at each point in the life cycle, even as customer subscription numbers grow.

This does not necessarily mean developing each piece of the solution in-house or requiring a large upfront investment. What it does mean is that before you begin development, you plan how your core application will be able to efficiently manage, automate or provide self-service capabilities for each activity in the life cycle. This capability is not an afterthought, and needs to be in place well before you have that million user subscription base!

If you only have the resources to focus on development of the core application, a good option is to use third-party turnkey services to handle the billing, provisioning, monitoring, analytics etc..  That is the beauty of a well designed SaaS - it can consume and integrate the services of other applications.  For example, Zuora recently announced a scalable, subscription billing service that can be integrated into a SaaS solution.  Your strategic mandate would be to ensure that from the customer point of view, the integration with your own solution is smooth and intuitive.  I’ll describe this more in future blog posts as I talk about each point in the life cycle.

By Paul Giurata on 2008-05-21