Robert Michon - The Complete Guide to Software as a Service: Everything You Need to Know about Saas

In 2003, I left a successful career in consulting tojoin a four-year old software company, building a recruiting and Human CapitalManagement (HCM) solution and delivering it over the Internet. Our company wasabout the same age as an upstart tech company in San Francisco calledSalesforce who was calling for the end of software.

At that time, my company was aggressively signing newclients (acquiring logos as it were) to gain relevant market share. I wasrunning IT operations and was faced with several challenges as the businessgrew 100% every year.

The first challenge was scalability. We hosted oursolution in an off-site colocation facility and had to plan all expansions toour hardware. Install too little hardware and you miss a sale. Install too muchand you have the CFO heading down to your office. In addition to technicalscalability (our databases were doubling in size every 160 days), we also hadto find a way to scale operationally. If we doubled the number of clients, wecould not expect to double the number of operations staff. Process optimizationand automation were imperative.

The second challenge was retaining our existing clients.Most clients signed a three-year contract and many of our larger clients werecoming up for renewal just as I was coming onboard. Even though managementsfocus was sell, sell, sell; our renewing clients were demanding service,service, service. After three years, our clients had become much moreknowledgeable about SaaS, what demands to make of their SaaS provider and whatlanguage they expected in their contracts.

So, my team had to rapidly come up with credibleanswers to questions on network security, data segregation, disaster recovery,uptime guarantees, maintenance windows, etc.

There were many other challenges about data sovereigntyand the choice of data center locations, contracts with hardware suppliers,follow-the-sun support models, zero downtime software maintenance, etc. Thelist goes on and on.

After leaving this SaaS provider around the time oftheir IPO, I went on to help other companies on the same journey. I haveencountered SaaS providers that were basically running their business on Excelspreadsheets and were about to implode. Others were transitioning from an on-premiselicensing model to SaaS, where I heard Support staff asking their SaaS clientsto send in a dump so that they could reproduce the problem. Others hadcustomized their software extensively for each client such that they wererunning over two dozen code versions in production with no hope to achieve anysignificant scalability or automation.

In my mind, the basic tenants of a successful SaaScompany were clear. Yet, I realized that what I considered obvious was notalways what was being implemented in the real world. The elements of success ofa SaaS company had not been compiled in a single work. There were someexcellent blogs that discuss particular elements of the equation, but nothingtied it all together. That is why I wrote this book.

This book is a must read for entrepreneurs who are launchinga SaaS company. It will also guide any software company who is transitioningfrom an on-premise license model to SaaS. It also provides useful informationand insight to different functional managers within a SaaS company. My hope isthat users of SaaS software will also find the contents interesting as theybecome more knowledgeable clients of their SaaS providers.

The contents of this book cover the definition and theorigins of SaaS. It then goes on to describe the functional, operational,technical and financial aspects of SaaS. The final chapters discuss security,sales and contracting.

I wrote this book to fill a void, as it exists today,in the world of SaaS. Yet, software paradigms continue to evolve as we move tomicro-services and an API-driven software economy. So, the definitions andpremises of this book may evolve to something new in the future. I am glad tohave taken one step of that journey with you, through this book.