SaaS market dynamics
The graphic below provides a summary of the dynamics of the SaaS marketplace. Naturally since SaaS have a lot of buzz right now everyone wants a bit of the pie and Gianpaolo Carraro provides a great description (and the image) on his blog of the different players and the most natural strategies that they can take to take advantage of the this growing market.
Whilst I don’t personally have a lot of involvement with active SaaS projects I recently took a look at a few areas where I have seen SaaS proving popular with customers that I work with and I saw an interesting trend.
Lots of interest in SaaS during the early phases of the lifecycle, however once a products value was accepted in the enterprise and its usage grew substantially most of the SaaS services were brought back into the enterprise. I am sure that won’t always be the case but it was surprising consistent.
I guess such a lifecycle is not very surprising, however it does make me think that SaaS will be most successful where:
- the SaaS supplier can deliver some value – beyond simply scale – from hosting multiple customers on the same Internet facing infrastructure
- the service is by its nature shared, with no single enterprise having ownership
- an individual enterprises demand for the service fluctuates considerably
- the SaaS application provides capabilities that are not available in enterprise products
- the integration with other SaaS or enterprise systems is either not required or is simple
