How ‘SaaSification’ Is Taking The Tech World By Storm
The greatest value the cloud offers is the ability to use technology to scale business processes quickly and make them more consumable. It enables them to run as a service, giving developers and operators more flexibility to stand up a service, sort out what works and what doesn’t, and ultimately improve the user experience. As they say in Silicon Valley, it allows developers to “fail fast” and repeat.
The cloud is a big enabling piece of this cycle, helping facilitate the speed and scale at which organizations create and refine their offerings with Software as a Service (SaaS) underpinning this process. The so-called “SaaSification” of business is driving innovation and smart organizations get this—they are seizing the moment, creating dynamic services on a platform, consumable by large groups of users at any time. According to some recent industry analyst estimates, 34 percent of enterprises will have 60 percent or more of their applications on a cloud platform within two years.
An important component of SaaSification is the dramatically changing economic models within which companies are no longer hindered by hardware and software procurement, but enabled by on-demand services. Further—and leading-edge companies know this—they’re buying an outcome and looking well beyond their hardware and software to achieve it. In this value-based, outcome-driven model, companies pay for what they use, upending the entire technology ecosystem.
Taking the next logical step, they’re leveraging SaaSification to allow faster time to market and consumption per transaction. Not just pay-as-you-go, but pay-for-what-you-consume, measured by business outcome. Whether it’s with insurance claims, live streams or pizzas ordered, creative business outcome models are now becoming de rigueur.
SaaSification also allows companies to use their new found IT “assets” in ways they haven’t before, which is an important element in today’s always-on, constantly shifting, user-driven world. For example, SaaSification enabled a large operator to launch a premium, broadband-based TV channel available on a wide range of devices—from set top boxes to smartphones. The offering saved the company from having to buy any additional infrastructure or expensive platforms. Instead, they were able to scale up and down cost-effectively to offer an additional, value-added product that enhanced customers’ viewing experience.
This has turned much of technology’s conventional wisdom upside-down. Today’s enterprises want to emulate cloud-native companies like Facebook that are pushing straight through to production and actually letting a product fail there, testing live in production.
Under the SaaSification model, automation functions are in place to allow agile delivery. Things get fixed very quickly or rolled back. There’s rapid development to push code when ready, leaving testing and improvement in the hands of developers creating a continuous loop of improvement. No waiting allowed. However, for this to work, governance, skills and comprehensive monitoring needs to be in place and a mentality akin to running a 24×7 live service operation is required.
SaaSification is also characterized by a much higher degree of user involvement than in the past. To differentiate themselves, today’s businesses must stay focused on the Holy Grail—the user experience. Uber is an excellent case in point. The company saw a need and an opportunity. Rather than having to acquire assets or build networks from scratch, Uber instead built a layer of capabilities on top of underlying assets that already existed: GPS, mobile devices, cellular networks and payment systems. User data, workflows and user experience become their differentiated—and disruptive—intellectual property.
While Uber is a poster child for the cloud native crowd, other enterprises are stuck with legacy specialized applications and vendors—far from anything even remotely cloud-like. These vendors are dressing up legacy apps as cloud apps, affectionately referred to as putting “lipstick on a pig.”
Lacking the wherewithal, know-how and investment to port fully over to the cloud, these solutions are only skin-deep. They often struggle to move at the speed of true multi-tenant solutions; some have cumbersome “connection charges” and lack the community that feeds their roadmaps. Pundits refer to them as “false clouds.” Ultimately, it gets to the question that successful SaaS services need to be architected for the cloud. In other words, SaaSification isn’t trivial and it certainly isn’t easy, and any buyer needs to beware.
The businesses of today and tomorrow are going to continue to emulate cloud-native models like Uber and Facebook, using SaaSification as a key to build and operate quickly and efficiently, and partnering with companies of substance, both technical and economic, to package business outcomes at scale. They will continue integrating different parts to create fluid business processes and offer a whole, end-to-end model. It’s a fairly frictionless process. How you put it together is the magic.
By Michael Liebow, Global Managing Director, Accenture Cloud Platform