What does “Quality” mean for SaaS products?

As anything sold, quality is the first and most important factor for its success on the market (price is the second most important thing, but we will not deal with it, in this post). During my engagement with the Software as a Service business I have found out that Quality is an issue that needs to be redefined in that context. I started thinking about this, driven by the fact that “traditional” software “virtues” are not enough to build a sustainable SaaS income. By the term “traditional” I mean all the usual quality elements or performance indicators that the buyer expects from any kind of software (SaaS or not-SaaS):

• To be error-free
• To be fast and reliable
• To be user-friendly
• To be adequately supported by its vendor
• To provide insight to the data that it keeps (and not just to… keep them)

 My point in this post is that SaaS is a space where additional “quality elements” must be in place. I will enumerate what I have come across (and what my customers are usually challenge me on) and explain why they are considered so much more important than traditional in-premise offerings.

Extensive parameterization: A SaaS product must offer extensive parameterization options since it is by definition a piece of software that the end-customer cannot be endlessly customizing and at the same time not respecting physical or logical constraints that its creator has set. Consider one of my favorite silly examples: In a customized in-premise software, if accounting dept wishes, it can revert the debits and credits on the General Ledger module so that the debits are on the right and the credits on the left hand side (!). Imagine this requirement being served by a generic SaaS Accounting software. Either the software vendor will say “not possible, sorry” or they will create a new customer setting like this: “debits on the right: [YES]/[NO]”. The point is that in order to serve diverse customer requirements from a unique codebase (and database) the logical architecture of the system must be extensively based on parameters and user-defined settings.

User support: By definition, any SaaS business shows meaningful profit margin for the supplier only if the number of customers is high. A large number of customers increases the workload of the Support department (call center, web support, telephone hot-line etc.). The vendor needs to build mechanisms that are capable of supporting multiple users, simultaneously. This is not necessarily the case with traditional in-premise software where an on-site technician visit is probably the best (or only?) way to identify and resolve the issue. In such cases, there is a mechanism to pipeline, schedule and execute the visit. And no one expect the visit to take place instantly!

Frequency of new releases: All software vendors offer frequent upgrades and new releases for their software. In-premise software suppliers do so only if the customer has bought a Maintenance Contract, but in the SaaS business new releases are not something that could be charged for an extra fee; it is simply expected to be included in the monthly (or whatever) recurring fee. To put in different words, there is no SaaS product without a release upgrade “package” attached to it. But that’s not the main point here. The main point is that in order to be constantly on the edge, to be ahead of the competition (remember: SaaS is the tool that enables users to easily switch from one product to another, since they never “bought” anything) and to follow frequent technology curves and trends (new HTML, JAVAScript, new web browser versions, mobile environments etc.) a SaaS “factory” must constantly produce new and better releases of the software. The urgency of new releases in in-premise software is not that big, since what “used to work a few years ago” will still work unless a major PC switch is done (not a frequent case!)

Performance issues: The workload of an in-premise software & database is generally stable with slow rate of increase. Performance bottlenecks or degradation manifest themselves slowly, gradually and always give enough time to IT dept. to react. This is not the case in SaaS where the hunt for new customers (=users) in that existing infrastructure in endless. Sure, modern architectures provide all the necessary tools for scalability, high availability and fast upgrades. But in any case this means that the SaaS vendors must have the mechanism to be on top of these issues; and they are rated by their customers on this area, too.

Security: Much has been said about the security of SaaS. We shall not go into details here, but just remind the usual concern of the customers: “my data is in the cloud and therefore out of my physical reach and protection”. SaaS vendors must demonstrate impeccable positive records in terms of security. As simple as that.

Customer engagement: Because SaaS does not require any capital investment, it is a perfect tool for customers to test and adopt, if they finally get convinced that it suits their purpose. On the opposite case, they are free to abandon the service and search elsewhere. This creates a high velocity of customer transfer in and out of the service, or “churn”. In order to minimize the rate of customer movement out of your service you must be in constant contact with them. Listening to criticism, to their problems, trying to find work-arounds for problems that they see as system inefficiencies, keeping them up to speed with new releases and versions (that must come very frequently, as stated before), etc. Therefore, there is a quantity of customer engagement work that did not exist with traditional in-premise software sales. Back in the day – and for large accounts only – it was enough for the account manager to visit the customer every once in a while, discuss issues and find solutions to new problems. In SaaS it is not enough. Most SaaS vendors are employing social media and other techniques to keep a high degree of customer engagement.

A successful SaaS business implies the existence of additional (new to the market) product virtues. Ultimately, these will separate the “men from the boys” of the SaaS space, because as competition rises, buyers become more aware of these additional virtues and start demanding them instead of just seeking them. The pressure in SaaS suppliers is building up and each vendor will select some (or all?) fields to build expertise and trust.