SaaS platform

A SaaS Platform is a computer program or collection of more than one computer program that acts as a host to applications that reside on it. The platform manages underlying computer hardware and software resources and uses those resources to endow its hosted applications with multi-tenant, on-demand capabilities that are found in Software as a service applications. Generally, hosted applications are written to target the platform and support a single user. The platform absorbs the responsibility of distributing the application as a service to multiple users over the Internet. The SaaS Platform can be considered a layer of abstraction above the traditional application server, creating a computing platform that parallels the value offered by the traditional operating system, only in a web-centric fashion. The SaaS platform is rooted in the need to reduce the time and difficulty associated with developing highly available, enterprise grade business applications that are to be delivered on-demand. [http://itmanagement.earthweb.com/article.php/3663266 Repealing the SaaS Tax]

Online or Offline platforms

SaaS can be delivered either on an Online or an Offline platform. Some applications have the ability to work on both platforms.

Responsibilities

Aside from enhancing a hosted application with one-to-many capabilities, SaaS platforms generally take on a larger set of responsibilities. The list below highlights some of these.

Tenancy Partitioning

One of the major responsibilities of any SaaS platform is offering tenancy partitioning services. Applications written in a single tenant fashion generally have little or no concept of serving multiple customers. For example, the application database schema may be geared for catering to a single tenant (customer), preventing multiple customers from storing data in the same database. Furthermore, execution may not be partitioned so situations may arise where inadvertent state sharing occurs between tenants that otherwise should have been isolated from one another. SaaS platforms are responsible for providing multi-tenancy aspects when needed.

caling

SaaS applications purposefully aggregate demand for all customers and users to one physical or virtual location. Being able to support this aggregation is therefore a requirement of any SaaS application. To achieve this sort of scaling, the application must be designed in a fashion conducive to scaling as well as having the support required of any auxiliary pieces. SaaS platforms attempt to remove the work associated with scaling by commoditizing the scaling portion

Monitoring & Metering

A SaaS application is required to meter and monitor usage from both data and execution standpoints. This is generally closely tied to both scaling and monetization models. Much of this is extracted into a platform layer, where the platform becomes responsible for metering tenant and user usage, as well as monitoring for system events.

SaaS providers achieve their revenue acceleration, revenue assurance and improved operational efficiency goals by using a SaaS metering solution. The monetization platform should be built a set of integrated software modules which meter usage of on-demand applications without the need for custom coding.

aaS Monitoring & Metering Benefits

SaaS providers benefit because the monetization platform will:

* Ensure revenue stream by developing a deeper understanding of customers' needs and expectations

* Recognize efficiencies and reduce costs by focusing on their core competency

* Expand market presence and increase revenue by creating service bundles for a variety of budgets

A good platform will directly address the SaaS providers' pain points such as insufficient service usage data, distraction of R&D focus from core service development initiatives, inability to support flexible pricing and billing models, difficulty servicing customers, higher costs for manual contract management, and therefore, inability to attract new customers to grow market share.

The foundation of a good platform offering is an Operations Service Manager (OSM) delivered as SaaS. The foundation provides the underlying security, scalability, data storage and visual rendering capabilities. The OSM aggregates customer, business service and service usage data for business processes. The Price Catalog, Usage Tracking, Contract Management and Billing Mediation are the business modules which run on the OSM to provide the necessary functionality.

Pricing Catalog: Publish Business Services

SaaS providers need to advertise services like an auto parts company does in a catalog or a restaurant does in its menu. Their marketing and sales teams need the ability to bundle features, create specials, provide custom orders and clearly communicate this information to their customers. From purely a pricing prospective, providers should consider de-constructing their products into a list of features, associate a price to each feature and then re-construct the product into bundles of features or packages and define how the package is priced. Good monetization software provides an easy to use yet powerful Business Service Catalog that gives providers the flexibility they need to create and position bundled products.

Usage Tracking: Understand Service Utilization

SaaS providers need to measure service usage for pricing consideration, billing purposes and improving revenue generating features. Providers have a big advantage when their customers use systems managed by them. However this benefit can only be realized if they effectively track customers' usage. SaaS Providers can make informed product enhancement decisions, empower the Sales team and ensure contract compliance using easy-to-understand, detailed service usage data. Knowing customer habits is vital for success.

A good monetization platform must have a Usage Tracking module that allows SaaS providers on heterogeneous platforms to collect service usage data and visualize it in a manner most useful to their business. Good technology allows for seamless integration with a provider's usage repository and aggregates the information on an easy to use dashboard. It gives providers the ability to view how customers are utilizing the business service – not page hits or similar high level web statistics, but a detailed view of how specific customers are using the most important features.

Contract Management: Automate Contract Generation and Compliance

SaaS providers need to generate contracts for cataloged services and ensure compliance. SaaS is all about providing business value to customers based on their needs. To do this, SaaS providers need to provide a-la-carte pricing and bundle features into sellable packages. There are many benefits to usage based pricing, however, it also brings complexity to contract creation, tracking and enforcement. A good monetization platform delivers the ability to simplify the creation, metering and compliance of contracts and allows SaaS providers to reap the benefits of not having to deal with the contract complexities. A Contract Management module will allow SaaS providers to create and track unique customer contracts based on packages or custom pricing.

Billing Mediation Simplify the Billing Process

SaaS providers need to generate invoices in accordance with contracts. Generating usage based invoices manually is time consuming and error prone. Therefore, a good SaaS monetization software will have a Billing Mediation module that can automate this process and create invoices based on customer order and billing cycles. It then optionally sends invoice data to a payment processing system through an integration infrastructure to any major accounting system..

Distributed Services

Traditional, on-premise software relies on a variety of services to accomplish the task of executing business logic. These on-premise services, such as logging or job scheduling, tend to become overly complex if used in a distributed system that generally backs most SaaS applications. SaaS platforms provide distributed equivalents of many such services, giving similar or even augmented capability when comparing to on-premise counterparts.

SaaS platform companies are currently introducing themselves to the market. Generally, their platforms can be categorized based on focus: either vertically aligned, horizontally aligned, product-centric, or general purpose. [http://www.saasblogs.com/2006/12/27/taxonomy-of-saas-platforms/ Taxonomy of SaaS Platforms] Although each is categorically different, the platforms generally adhere to most of the basic principals outlined above.

Lock-in

One topic that frequently surfaces within SaaS and SaaS platform circles is the topic of lock-in. Much like other technologies, SaaS platforms offer varying degrees of openness. On the proprietary side, an example is the upcoming Salesforce.com's AppExchange and it's underlying Apex platform, which requires the use of a proprietary programming language and technology stack. Generally, this is considered a lock-in approach to the platform concept. [http://www.saasblogs.com/2006/10/10/salesforcecoms-apex-benioffs-handcuffs-for-on-demand/ Salesforce.com’s Apex: Benioff’s Handcuffs for On Demand] [http://www.internetnews.com/bus-news/article.php/3604316 SaaS Players Jostle for Position] Lock-in through new programming languages and frameworks tends to increase adoption risk and require that any existing technology (such as open source components) be ignored or integrated in through adapter mechanisms if possible. Arguments supporting lock-in style platforms tend to originate from the claim that a new language and framework is needed to support SaaS applications.

Conversely, SaaS platform newcomers such as Apprenda and SaaSWizard, have announced intentions to introduce platforms to the market that present little to no technological lock-in. The goal is to allow the use of existing technologies to provide implementation logic, while attaching SaaS functionality to the software through the platform. Criticisms tend to focus on the fact that providing SaaS functionality in an easy-to-implement fashion is difficult to do using existing technologies, and could prove burdensome for providers.

See also

* Cloud computing
* Infrastructure as a Service
* Office suite
** Online office suite
* Online accounting
* Paperless office
* SaaS
* Software appliance
* Telecommuting
* Web 2.0
* Web desktop
* Utility computing

References