Definition of SaaS is not too obvious

Posted on Jul 23, 2020

Can desktop application be a SaaS product? Those who have been more than 10 years in SaaS business might say instantly no. For old-school masters SaaS is defined as a multi-tenant web application available over internet. But with mobile first and other modern delivery and technology strategies any SaaS company must rethink carefully what SaaS actually means to them.

SaaS is a combination of different business models and architectural choices, but apart from subscription sales and cloud architectures there's no simple way to define it. This often misleads enterprises and teams to produce something that is not as scalable, achievable or evolvable as a good SaaS product should be.

In basic principle any SaaS product should be applicable with following:

  • Provides access to the content, process, tool or other online service​
  • Can be scaled without adding extra resources to production or delivery
  • Is owned by vendor. Client can subscribe to gain access, but client never owns the software.

Typical SaaS companies are aiming to enable exponential growth with multi-tenant architectures and self-service approaches. That's why the goal is always to be able to scale with as little resources as possible. Although there are two ends of this:

  • High touch products: Serve large customers with highly customized approaches
  • Low touch products: Serve small customers with highly automated approaches

Also with high touch customers the goal is to automate as much as reasonably possible, but the question of cost vs. benefit is more visible when thinking what can be automated. For smaller clients there's no question: Everything must be automated, otherwise cost becomes too high.

Technically SaaS can be defined slightly easier:

  • Centralized: Data stored into cloud or shared resources utilized
  • Self-service: For example automatic desktop app installation or web application
  • Access anytime & anywhere: Online service, mobile app etc.
  • One-to-many: Single-tenant or multi-tenant - as long as it's scalable
  • Subscription-based: Client can only have access, but rarely more.

Although these are all characteristics of SaaS, every SaaS product is different. That's why it's also crucial to share mutual understanding within your company what kind of SaaS business are you developing - otherwise it might become messy and aimless.

Leading a SaaS business or development team?

Would you like to boost your team's productivity with process improvements, new tools or agile management? You can hire me online for interim management and coaching. I provide remote consulting to companies mainly from US East Coast, UK, Central Europe and Nordics having outsourced teams across the world.

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I'm the Founder of Growhold - a customer data platform that drives conversions for product teams. I'm also providing consulting services as an Interim Manager and Agile Coach. With 20 years of work experience I help global software businesses and distributed teams to perform better.

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