Posted by:Srini Bhopal June 11th, 2010

The success of SaaS (Software as a Service) offerings such as SalesForce is creating a groundswell of change and enthusiasm in the software industry and transforming the entire value chain of conception, design, development, testing, delivery and support.Genesis:

The increasing and reliable availability of internet bandwidth across the globe started people thinking about providing software solutions on the internet and thereby enable customers to reduce their hardware and software acquisition costs. The initial applications such as Hotmail, Yahoo Mail established the concept and the wide adoption and acceptance by customers laid the ground for more ambitious solutions. The launch of Salesforce and the subsequent embrace of this solution by Fortune 100 clients and rapid growth of the company was the event that completely transformed the industry and the nay-sayers and pundits alike had to start changing their negative views and analyses.

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Today, more and more software companies are developing active plans to re-jigger their software products and offer them as a SaaS variant.

Boston Technology Corporation:

We have been working in this space since the early days including helping build solutions in the era of pre-cursor to SaaS – known as  ASP (Application Service Provider) solutions.

This experience has helped us learn and gather excellent credentials to provide comprehensive thought and delivery services to our customers who are planning on Product to Service transformation.

Our OTID framework helps companies do a detailed analysis of the issues surrounding a transformation plan and lead to a successful end result.

OTID (Organization, Technology, Integration, Deployment):

The issues involved in a typical product to service transformation can be categorized into the following:

Organization Related: There are significant changes in the way business is generated and managed when moving from a product to a service centric approach.

Revenue flows move from a peak-trough cycle to a steady state but the predictability of the flow (given the easier churn) is lower.

The type of sales and marketing personnel and their compensation plans need to be revisited to keep in line with the change in the revenue flow.

The overall operation intensity increases given that customers can be spread across the globe and demand instantaneous support and constant upgrades to meet their needs.

Technology Related: The technology platforms chosen to develop the product may need to be revisited given the faster release cycles and significant issues involved in scaling, security and deployment of the solution.

We have experiences ranging from a complete re-architecting to incremental changes to the product.

Integration Related: In the new paradigm, customers demand easy ability to move data and processes across applications and are not willing to accept siloed solutions which call for repeated re-entry and re-validation of data.

This means a careful thought and investment in developing easy to use APIs which are well documented.

Deployment Related: Most software product companies have little or no in-house expertise in choosing hardware, defining bandwidth, architecting redundant storage systems as they had left these issues to their customers! In the services paradigm, the entire deployment responsibility has moved to the software providers.

This would mean having on staff or engaging with a partner organization which can evaluate the various options such as Amazon, Microsoft, Google(to name a few) that could host the applications and provide true 24×7, 99.999 availability.

Furthermore, a well defined disaster notification and recovery plan needs to be put in place to ensure prompt and well thorough response in case of outages.

Conclusion: The end users of software are realizing significant cost (studies show 20-50% benefits) and operational efficiencies by moving to a SaaS model and are putting back pressure on software product companies to move to this paradigm.

The issues listed, admittedly, are broad brush strokes of issues that an organization needs to pay attention to while making the exciting and sometimes perilous transformation from a Product to a Services centric business.

We at Boston Technology Corporation stand ready to share our thoughts, experience, successes and challenges to help with this journey.

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