What it takes to make a successful SaaS product

What makes a successful data protection as a service (DPaaS) product? I watched another vendor announce a “SaaS” product that I suppose technically meets the definition – but looks like it will fall short in both metrics of success: customer satisfaction and overall revenue. It’s not going to offer an actual SaaS experience, and it’s going to compete with the company’s other products and therefore not be as successful as it could have been.

Fake SaaS is Vegan Sausage

I mean no disrespect to my vegan or vegetarian friends. I actually was a vegetarian for a time and I respect the choice.  But when I was a vegetarian, I was happiest when eating vegetables cooked as vegetables.  I did not need my vegetables to taste like meat.  There is nothing wrong with vegan sausage per se. If you eat it and like it, more power to you.  And if you’ve never had actual sausage, you might think you are eating something that tastes like sausage.  Trust me, you’re not.

That’s my point with these SaaS-like products that are popping up – they say they’re SaaS, but are they?  It starts with an on premises offering that doesn’t have a recurring revenue model outside of their support contracts.   They could refactor their existing solution to be cloud-friendly and truly SaaS, but that is a very expensive proposition for a company that still has an existing product to maintain. So they lift-and-shift the on premises solution into VMs in the cloud, put a SaaS interface in front of it and call it a day.

It’s vegan sausage.  It may look and feel like SaaS, but anyone who has truly experienced SaaS will tell you not so fast.  SaaS is more than a user interface. It’s a way of doing things that includes pay-as-you-go pricing, dynamic allocation of resources, and not having to ever worry about paying for something and not using it. It’s also about being less expensive than the alternatives. If you lift-and-shift and don’t refactor for the cloud, you’re going to have something that looks like SaaS, but will fall short in every one of those areas when compared with actual SaaS products.

Competing with your own products

I spoke today with three fellow industry people, each of which worked on cloud versions of three different hardware products.  Three different companies and three different products – and yet one story.  The products all started as lift-and-shift versions of an existing product. Salespeople have a bigger incentive to sell the on premises version of the product. The sales conversation uses the cloud version as a bargaining chip, but the ultimate goal is to sell the on premises version.  The result is no one ends up selling the cloud version of the product.  The ROI is smaller upfront and bigger over the long term.  But salespeople think short term – and they’re incentivized to do so.

The result in each story was that none of the three cloud versions of the three storage products were successful.  Salespeople killed it because it didn’t pay them as much. You could address this problem with sales incentives, but then you kill the bread and butter of the company for the new, experimental product.  Public companies – or companies trying to be public companies – can’t tolerate the dip in revenue this would create, and so they end up cannibalizing their own product. 

Judge for yourself

If you’re looking for a DPaaS product, ask questions to help you identify if the product is a true SaaS product or not. What does scaling the solution look like, both up and down?  Is it possible to pay for something you don’t use?  The product I saw today charged for front-end terabytes, meaning the size of the datacenter being backed up.  What happens if I buy a 100 TB license, but only deploy it 10 TB at a time?  I won’t actually be 100 TB until later in the year.  Does that create credits that rollover, or did I just buy 100 TB for a year?  What happens if we buy too much, such as what happens if you kill off a major project or sell off a portion of your company? What happens as I scale?  Do I need to warn the vendor so they can scale the back end for me, or does it scale automatically?

In the end, the only thing that really matters is what you get for your money. Fake SaaS solutions will cost more for less functionality. So make sure to take a look at the overall TCO of the solution before you buy it. 

I’ve had real SaaS, and I’ve now seen how it’s made.  (Sticking with my analogy to the bigger end.) Trust me, it’s better than fake SaaS any day, and anyone whose actually experienced a real SaaS product will agree.  Don’t settle for less.

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Written by W. Curtis Preston (@wcpreston). For those of you unfamiliar with my work, I've specialized in backup & recovery since 1993. I've written the O'Reilly books on backup and have worked with a number of native and commercial tools. I am now Chief Technical Evangelist at Druva, the leading provider of cloud-based data protection and data management tools for endpoints, infrastructure, and cloud applications. These posts reflect my own opinion and are not necessarily the opinion of my employer.