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  1. #1
    Join Date
    Mar 2004
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    550

    Is anyone else in the SaaS business?

    I'm wondering if there is a benefit in adding a forum to this site just for people in the SaaS (Software as a Service) business. Is anyone else in this line of business?

    Our customers choose us primarily based on the features of our software. Our hosting capabilities are secondary and often they don't ask about them at all. They just assume the software will respond quickly and always be available. So, some of the hosting issues we face can be a bit different. We're not competing on bandwidth, hosting plans, etc., but rather on product.

  2. #2
    Join Date
    Jul 2006
    Location
    Detroit, MI
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    1,955
    Yes - we have been into it heavily the past 10 months, though prior to that we were doing SaaS and didn't even know it! Our website will show that info in 08.

  3. #3
    Join Date
    Oct 2001
    Posts
    114
    I'm doing digital casting services out in LA, and we're SaaS. The web hosting is secondary - it just enables the software to work.

    Take it easy,

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  4. #4
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    Mar 2004
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    550
    Glad to hear there are others out there. We developed our own specialized software product (it helps universities manage their research) and offer that via the SaaS model, as it makes it easier for everyone. Our customers aren't technical and never really ask about the servers we use, bandwidth, etc. They just care about product features, and that things work 24/7.

    Have any of you attended HostingCong? There is SaaSCon coming up, but the past topics there haven't seemed too interesting so I may go to HostingCon instead.

    Were any of you in the "plain" hosting business before going SaaS? How did profit margins change? Our numbers aren't all in for 2007, but it looks like we really hit an economy of scale this year, and operating profit margins will be very high.

  5. #5
    Join Date
    May 2002
    Location
    Raleigh, NC
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    I think most of the buzz around SaaS now is for "plain" hosting providers taking the next step by selling packaged software service such as Exchange, other groupware and niche vertical apps.

    In your case you are selling use of your in-house developed software, I think you are closer to an ASP (application service provider) but of course the definitions are all blurry anyway.
    Tranquil Hosting

  6. #6
    Join Date
    Mar 2004
    Location
    Seattle, WA
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    490
    Quote Originally Posted by TQ Mark View Post
    In your case you are selling use of your in-house developed software, I think you are closer to an ASP (application service provider) but of course the definitions are all blurry anyway.
    Traditionally, an ASP hosts third-party software which you licensed. Before, it was common that they also web enabled a piece of software which was not designed for the web through a wrapper. An ASP will usually not fix problems in the software itself, but only provides hosting.

    A SaaS provider usually sells a more custom solution in a "pay as you go" licensing model. A SaaS provider usually has more control of the product and will the party responsible for both the hosting and the application itself. Someone selling an in-house developed software as a hosted product rather than selling licenses is indeed following the SaaS model.

    It is true, however, that the lines are increasingly blurred. Especially with open source packages, ASP's are going beyond what traditional ASP's could in terms of tailoring third-party software to produce an overall solution.

  7. #7
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    May 2002
    Location
    Raleigh, NC
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    Quote Originally Posted by mkc View Post
    A SaaS provider usually sells a more custom solution in a "pay as you go" licensing model. A SaaS provider usually has more control of the product and will the party responsible for both the hosting and the application itself. Someone selling an in-house developed software as a hosted product rather than selling licenses is indeed following the SaaS model.
    Interesting - I considered the SaaS term to be used more for selling pre-packaged software because of the widespread Exchange hosting service recently has been labeled (incorrectly?) as SaaS.
    Tranquil Hosting

  8. #8
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    Jan 2004
    Location
    Pennsylvania
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    939
    The definitions I've seen have been reversed. When I worked at an ASP in 2001 we hosted our own software only. SaaS is meant for ISV's to develop software and then for multiple hosting providers to sell/host it. If someone is developing+hosting they are an ASP.
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  9. #9
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    Quote Originally Posted by TheWiseOne View Post
    The definitions I've seen have been reversed. When I worked at an ASP in 2001 we hosted our own software only. SaaS is meant for ISV's to develop software and then for multiple hosting providers to sell/host it. If someone is developing+hosting they are an ASP.

    Agreed. SaaS by definition is providing software as a service instead of a fixed-cost. Hosted exchange is SaaS. Sharepoint is SaaS. Though SaaS usually implies business processes to accompany the actual product.

  10. #10
    Join Date
    Jun 2005
    Posts
    2,574
    We are in the SaaS business for many years by now. IMO it is a natural route if you are a software development company serving corporations. I have been working professionally in software development since 1977 and the advantages of providing functionality via the Internet/intranet are fair superior than running software locally. The Internet is a great opportunity to sell SaaS. Interestingly many programmers don't invest in the Internet and still develop traditional programs using traditional languages. I think applications like hotmail and gmail are educating the people for a new way to use software. Linux is not a real treat to Microsoft. Google is.
    Last edited by dotHostel; 01-02-2008 at 04:47 PM.
    You will only find out how good a provider is when the going gets tough

  11. #11
    Join Date
    Jan 2008
    Location
    Landskrona, Sweden
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    Based in Sweden, we're a small company that are (in a simple way) SaaS providers of an application developed by our business partner. The app is a control magamenent system for companies that are ISO certified (quality and environment, ISO9000/ISO14000) or that are not certified but yet wants to work by those guidelines. We are hosting this app for our partner but there's no automation at all. The app is pretty large and we always do manual hands-on for the installation procedure.

    However, we're also an ISV developing some small webbased apps for specialized use by small companies here in Sweden. Now we're going to host these within a couple of months by the SaaS concept. To begin with we just wants to build our server architecture based on one server only, since our apps is pretty small and not resource heavy - and since we're starting up this as a small company without big investment budgets.

    Until now I've been looking into Microsofts LitwareHR project and I think that solution could be enough for us if we can apply it properly to our server and apps. The important thing is to get the automatic procedure called provisioning so our potential customers can register online and have an account created immediately for XX days of free use. Next step is ofcourse a built-in payment control system for creating invoices (most common in Sweden, here we don't use credit cards that much).

    Right now, my plan as responsible for setting this hardware/software solution up for our apps, is to go by the LitwareHR concept if I can sort it out and apply it to our business. Also, I'm planning to do this running the SaaS hosting on (Microsofts) virtual server system, one VS per application. This way we can have a "ready-to-go", but still pretty empty of application, ".VHD"-file that could be deplyoyed easily and fast on existing or new server hardware when we develop new apps. The future plan is to develope several small apps, should be said.

    So - I'm very interesting in sharing ideas and discuss SaaS with others. If anyone already now have any tips, ideas, suggestions, warnings to me - please feel free to inform me. It would be very appreciated since I'm just in the planning and experimenting stage right nog of which way to go as a new in-house ISV/SaaS provider.

  12. #12
    Join Date
    Mar 2004
    Posts
    550
    Quote Originally Posted by MickeP View Post
    The important thing is to get the automatic procedure called provisioning so our potential customers can register online and have an account created immediately for XX days of free use. Next step is ofcourse a built-in payment control system for creating invoices (most common in Sweden, here we don't use credit cards that much).
    This is an interesting point. What have others found in terms of provisioning? In our case, our application is not something a potential customer would buy on a whim. We sell our product (as a service) with a minimum of a 1-year subscription, and encourage them to try a free demo first.

    So for provisioning, it's done manually on our side. The potential customer fills out a form about their processes, and we configure the software appropriately. We always have the demo site ready for them in less than 1 business day, and it takes around 10 minutes of tech-person time to set up the site, and 10-20 minutes of non-tech-person time to configure the site (which is done through our application). We only set up a few demo sites per week, so this seems to be OK.

    Invoicing is also done somewhat manually. Invoices are generated by a human, though only once per year per customer. Those are then emailed and the customer is given payment options (check, credit card, wire transfer).

    It just so happens our application is not one a customer would use for only a few months, since it manages a process (in universities) that generally lasts many months.

    What are others doing? Have you found provisioning and invoicing speed is a big issue? Maybe it depends on customer volume and customer turnover (retention)? Our application is very specialized so there's not much competition, and in 5 years, we have lost less than 0.5% of our customer base.

  13. #13
    We started out with a more traditional ASP model but we now focus on partnering with ISVs to allow them to deliver their Software as a Service.
    Last edited by bwiedner; 01-30-2008 at 04:12 PM. Reason: better wording

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