Shifts in the SaaS Industry

May 2, 2017

Cloud technology has changed the way most companies do business today. Where that is most apparent is in the Software-as-a-Service sector. The Application Service Provider model preceded Software as Service before cloud technology became prevalent. Having worked at an ASP in the early 2000s, it was apparent we were pushing the limit on features but the technology just wasn’t there to keep up with demand and provide a good client experience. But as technology caught up, businesses saw a way to leverage cloud and other emerging technologies to meet client demand.

Just one problem: most didn’t know what they were getting into.

Moving to the cloud is a no-brainer for most companies, but if you’re a SaaS provider you have an extra set of challenges you need to address before you move into the cloud. Unfortunately, there was no handbook for moving to the cloud and most went in feet first without understanding what business problems they were trying to solve for.

Even in 2017, this industry faces the same challenges today it faced back in the ASP days.

Architectural Redesign

Most companies took their on-premise delivered software and simply virtualized it and stuck it in some cloud. While from a technical perspective this worked, it really didn’t take advantage of any cloud capabilities. First, these installs were still single-tenant – this required a manual build of all servers needed for an install along with manual configuration for each client. This may have saved some travel cost but it didn’t address the time to provision problem. What was blatantly obvious is that most of these applications needed to be redesigned and architected to be multi-tenant (if possible) with an application and front-end stack designed to take on load based on time of day and seasonality. This required a lot of development time which most companies didn’t anticipate.


Along with not taking advantage of native cloud technologies, we see another trend in that SaaS providers are not taking Dev/Ops seriously. This is a philosophy which should be adopted in the early stages of cloud migrations which, when implemented correctly, could solve for a lot of challenges businesses face. The ability to have developers update and enhance applications more efficiently without the need for all of operations to get involved is a serious time saver. Employing a Dev/Ops methodology would also give SaaS providers the ability to scale or retract their application and add additional resources and capacity, all based on load.

Client Satisfaction

More and more, there is a push to add features and functionality to a SaaS product when the client experience isn’t factored in, and in most cases is suffering. This is apparent when giants like Apple change anything in their IOS or Facebook changes its layout. Humans are a creature of habit, so changing the location of anything on your website could have major ramifications if there isn’t proper quality assurance. Client satisfaction should be the driving force for any SaaS provider; competition is too stiff and users will go elsewhere quickly.


Security should go without saying but it’s still an area of trouble for SaaS providers. Designing software with a mass user base, often involving personal information, should not be taken lightly. The end-user expects that their information will be kept private and will not be sold to another firm, and that they will be notified immediately in case of a breach. Hackers know a central repository of this information is a gold mine – and mine they do, especially if the data contains financial or healthcare information. If your SaaS isn’t designed with security as the focal point, then it’s only a matter of time before you are left behind.

Bhu Virdi, Flexential

Bhu Virdi

Director, Solutions Architecture

Bhu is director of solutions architecture at Flexential. He architects tailored Hybrid IT Solutions for strategic clients. Bhu has been with Flexential for five years and has over 15 years of experience in IT infrastructure technology.