I’ve been thinking a bit about the trends going in the SaaS world and I can’t help thinking that we are all missing a trick or two.

Firstly let’s get the rough trends out of the way;

1) SaaS is becoming more mainstream and is being adopted all along the company sire continuum.
2) platforms and PaaS are increasingly important.
3) Big players in software and Telco are moving into this space.
4) SOA isn’t separate but intrinsic to SaaS
5) market consolidation


My problem is that all of this activity is focused on the application or platform. The picture above is from Force.com and is a great example, Apprenda another. This focus doesn’t actually take into account the end user experience. It also doesn’t give the user any service level guarantee’s.

In this second diagram I’ve painted a simple picture of all of the elements involved in the end user experience (and by proxy their satisfaction with SaaS). You will notice a whole lotta real-estate between the platform and the end user which is unmanaged. What is the point of a five 9’s datacentre and platform if the net is down, the router on the fritz or there’s an issue with the end device.


To my mind a good SaaS provider should be interested in this additional real-estate. It represents a space that If MANAGED could be a point of differentiation. A way to get the mass of the adoption curve past their current hurdles and a way to provide businesses (who are putting up mission critical information into the cloud) some sort of SLA (and by association reassurance). It also represents the next evolution of maturity in the SaaS model, SLA’s. Its because of this that I think the increasing involvement of ICT businesses (typically Telco’s who are playing in IT ) in SaaS is of massive importance. It seems to me that they alone can put all these bits together and hence provide the SLA’s that must eventuate.


  • Can ya give me a succint definition of SAAS and the difference between “Enterprise 2.0” and/or “Web 2.0”

  • Hi Mike,

    You ask a fairly challenging question, particularly as Web 2 and enterprise 2 are many things to many different people.

    I’ll have a go, but this is just my opinion and others, particularly Ben may have a different view.

    SaaS = software hosted outside of your business (normally referred to as in the cloud or internet) that is developed, managed and delivered by the software vendor. Normally you access it on some sort of subscription basis. One of the key tenants of SaaS is that nothing (or not much) is downloaded onto your computer. It all resides in the cloud, so all management and updates and releases are the providers issue not yours. On premises software is just that, on premise, installed and managed by you or your provider. You have to do the version control and updates etc.

    Web 2.0 is more of a phenomenon (to me). It is the result of technologies and social trends coming together. For example the ability to blog, have comments (like you did) be alerted via RSS of those comments, create a widget to co-populate my own blog and generally create free, easy application mashups is all kinda web 2.0. It is the sometimes summarised as the movement of power to the users (ie we create content) whereas web 1.0 was static, where content was pushed to you and thats all you got.

    Enterprise 2.0 is the same as above but INSIDE a company, rather than on the web. In an enterprise 1.0 world we had intranets, in a 2.0 world we have blogs and wiki’s, free forming of communities of interest around a topic, people using RSS internally to be updated, people putting up their own content, ideas being submitted and voted on in real time that sort of thing.

    Hope that helps. Like i said just my view

  • Mike – UM puts it so well I have very little to add.

    2.0, as stated, is a mindset. SaaS is a delivery modality – there is obviously an intersect between the two but they are different beasts.

    You’d be more than welcome to write a guest piece on SaaS as you see it – let me know if you’re keen…

  • The UM – good defintions.
    And so the difference is that Web/E2.0 has integral openess, sharing, connectivity (and all that data on a massive scale, corwd power …) where as SaaS may have that but not necessarily and it might be (as an example) just a version of MYOB on the web (Xero anyone).

    Sweet my defintion of E2.0 still stands, *phew* 🙂

    Thanks for that, I think I’m clear now …

  • Not bad, not sure it’s quite succinct enough (certainly wouldn’t show it to “real” people 🙂 but a great attempt. Then again, attempting to define a marketing term is never easy 😉

  • Mike — you’re right in many ways. There is a lot of unserviced/unmanaged space between the SaaS app and the end user’s day-to-day experience. We’ve seen it with some of our customers (SaaS small biz CRM) in that they can get frustrated when something breaks in that un-managed space. We won’t be offering a desktop version of our app, and we’re certainly not interested in becoming an ISP and/or Geek Squad, but I could see SaaS providers partnering with other organizations to bridge the gap.
    Good post & responses so far.

  • Paas provides the foundation and SaaS the delivery method. But there is still a whole lot of leeway between the two and more between the user and the services. This is where added value can really segregate the companies into hosters and true PaaS and SaaS providers.
    aPlatform vendor example
    I also believe that users will ultimately drive SaaS adoption once the market becomes saturated and features become common and more similar.


  • @Friarminor,

    I believe you are completely correct. When the market matures PaaS will become the profit pool as SaaS vendors strive for cost reductions and efficiencies. Scale based infrastructure plays done well drive huge profit pools.

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