The golden age of SaaS
Published (updated: ) in Cloud, Startups.
There’s no longer any good reason to run your own software. Everything you need to run your business is available as a service.
Even core software components like databases and queues are now available through IaaS like Amazon’s RDS and Google’s pub/sub.
When you buy something as a service, it will be more regularly updated and more secure than anything you can build or run yourself. There only remains FUD from legacy vendors, luddites and regulatory bodies preventing some use cases from going to SaaS. The latter will eventually change.
But that wasn’t always the case…
7 years ago…
In 2009 I started Server Density, a monitoring as a service product. It came out of my frustrations around trying to find an easy way to get graphs and alerts without having to do everything myself.
These were the early days of SaaS and most of the things I needed to start a company, I had to build myself. It’s interesting to look back and what I built and the wealth of services available now.
- Payment processing. The US lead the market but over here in the UK, I had to go to a bank to get a merchant account and then to a payment processor to get an API to hook it up to. Nowadays, I can just go with Stripe or Braintree.
- Hosting. I started off at Slicehost, then upgraded to dedicated servers at Rackspace, which required annual commitments and pricing negotiations. Today I’d just go with AWS or Google Cloud, and I might even prototype the MVP on App Engine or AWS Lambda and simply skip the servers.
- Accounting. This was one of the few areas I didn’t have much pain with because Xero was available. It is still an amazing product and handles all our accounting, invoicing, expenses, balance sheet, tax, currency reporting needs.
- Customer management. Connecting Xero and our payment processing for subscriptions was not easy. I had to build a custom system to tie them together but today I would probably use Zuora.
- SaaS metrics. There was no established standard around reporting for SaaS, it was too new a business model. I reported to our investors our revenue each month but things like churn, LTV, CAC, ARPA, etc were very unusual and difficult to calculate. Today I’d use Chartmogul or Baremetrics. The community around SaaS has also grown significantly, with helpful posts from Christoph Janz (one of my investors), A16Z and of course everything from Jason M. Lemkin at SaaStr.
- Customer Success. This wasn’t even a thing and discussion was around “customer support”. Zendesk was very early and I built a custom system to handle tasks, remembering to check in with customers and get basic usage metrics. Today I would use Totango, Gainsight or Amity.
- Team communication. Skype was the main tool for talking within our team. We then switched to Hipchat and more recently have moved to Slack. Just think of all the data and integrations Slack gives you right in a single app. That was all hidden across multiple systems in the past.
- Code builds. Running a buildbot server was a pain but now we simply connect Github to TravisCI and it all happens with minimal hassle.
- Push notifications. A tutorial I wrote for creating your own push notification server is still one of the most popular posts on our devops blogbut nowadays you can use services like Urban Airship or AWS SNS.
- Office & Storage. Dropbox has been around since 2007 but it wasn’t so good for business use in the early days. It’s only recently that Google Apps is a full suite of email, calendar, conference calls (Hangouts, launched 2013) and storage (Google Drive, launched 2012). Microsoft have upped their game recently and now Office365 is actually very good. AWS have an email and file sharing product and there are other places to run your mail like Fastmail. There is absolutely no excuse for running your own email as a business these days. I’ve not had to deal with spam since I started using GMail.
- Security. DDoS protection and firewall services like Cloudflare, and even VPN like Cloak are relatively new. The old way of doing this involved a lot of hardware, appliances, expensive bandwidth and trying to configure something like OpenVPN on a server you then had to secure yourself.
- CRM. Of course SalesForce created SaaS but there are no end of alternatives that are much more lightweight and better designed. I’m on the board of one, SalesSeek.
Running a business from anywhere
SaaS means there is no single point of failure. Server Density is a distributed team accessing various SaaS products to run our business. Failure of one does not stop business.
Being productive just requires a) a computer, b) the internet, c) your access credentials.
From any major city and even smaller towns around the world, you can buy a ready-to-go laptop from Apple, log in and have your 1Password database sync within seconds. Launch a browser and you’re ready to go. It’s even easier on an iPad and outside the Apple ecosystem, similar tools exist as well.
Starting a business is just as easy
With all these services, you no longer have to build your own business infrastructure. You can focus purely on what your product is, with all the tools you need to sell it, provided by expert SaaS vendors, on a monthly fee basis.
That’s not to say that creating a successful business is any easier, but starting and running the back office certainly is.
Modern businesses shouldn’t ever have to run software themselves, except for what they write as part of their product and even then they don’t need to create that infrastructure from scratch. And older businesses who know what they’re doing are moving in the same direction, it’s just the luddites left with their on-premise data centres, appliances, servers…
Today is the golden age of SaaS.