This is the fourth article in a series with excerpts from this year’s workshop titled, “How to Eat an Elephant – Developing a Real-World Product SaaS Product Roadmap.” Each of these articles will cover one part of core subjects in our Cloud Product Roadmap.  If you are just joining us – you can return to the first article in the series and find out more about the workshop background and other articles in the series.

Excerpt: How to Eat an Elephant Workshop by Scio Consulting

Planning and developing a Cloud product can be a daunting prospect, especially if using cloud-based infrastructure and services requires a departure from your “comfort zone” in more traditional installed and server-based products. One of the biggest concerns is developing the architecture for the project. For an implementation on something like Amazon Web Services how do you decide on the break-down of the application between the various services Amazon provides? Can you model the utilization scenarios and understand your costs in different situations?

Before you begin that consideration – let’s first make it clear that straightforward server virtualization is not the key feature of Cloud technology. Where Cloud implementations really shine in their value is in the ability to provide highly elastic capacity for specific application elements. This means the architecture can to break out client service elements that are based on utilizing elastic storage, moving large amounts of content, or have bursty characteristics.  Simple server virtualization schemes are limited reaching these scenarios economically because they are based on replicating a the server footprint rather than extending individual application  components.

On the other side of the coin, the “client side” of the application is not the only thing we’re concerned about. We also need to consider an operational side of the application that will support our product strategy and business model.  Hobbling operations by relying on manual processes to onboard customers and handle operations is not a sustainable way of dealing with the “back office details” of the service.  Generally, the operational side of an application will scale in a linear fashion. These components will scale in relation to the number of clients rather the usage patterns of application features by clients. That means utilizing different scaling strategies for various parts of the application. It also means cost modeling needs to be split between dynamic services that are consumed directly by client use and the more linear use patterns of components that are required to operate the service.

To understand the issues, let’s go back to one of the basic problems of a SaaS or Cloud product. There are several elements of these applications that are critical to operations but take considerable effort to plan, develop and implement:

• Multi-Tenancy – For most SaaS and Cloud Services, multi-tenancy is the core approach to application management, generating new instances, and structuring client data. Multi-tenancy is implemented in the database of the application itself.
• Application Management and Availability – Regardless of whether they are designed for the Cloud or not, modern applications are not monolithic. As we have discussed, they are actually a group of components that may have different use patterns and performance characteristics. Managing performance and scaling for the entire application is a basic requirement, but in a component model, you may need to manage performance and response at the component level to leverage the opportunities that true Cloud architecture offers.
• Product Management – Configuration, metering and billing are necessary to manage service packages that can be offered to clients. It is likely your packages will change over time, so your management system needs to be flexible and accept a wide range of scenarios. If you plan to leverage reporting to determine feature acceptance and value, you also need to be able to monitor feature-level usage over time.
• Usage Metering & Billing – If your service has usage-based billing, no matter how it works, you need some way to translate usage into billing. What seems simple can be come complicated quickly when you are faced with various combinations of partial months, changing user counts, differential pricing by user role, promotions, and other unexpected complications. Being able to respond to a changing elastic deployment. It requires much more effort to maintain reliability over changes to the core and operational sides of the application. In the best case, the basic architecture of the application platform supports the kind of load-balancing and instance version control that makes this possible.
• Subscription Management – A subscription is the package of services that a client has subscribed to and pays for in regular periods.  Although they are utility-based, very few Cloud Services can adopt a totally unpackaged, spot use model.  Granular spot use models are hard for the client to plan for because they can represent a risky “uncapped expense.”  And – unless they are based in regular use by a very large client base, they can result in a cash flow that is impossible to plan on. Because of this, regardless of how the service works, most SaaS and Cloud Services will have subscription-based packages and require on-going subscription management and the ability for clients to change subscriptions based on the current feature pricing schema.
• Access Control – Users must be able to access the features related to their role within their company subscription and if the service includes a suite of applications – their access needs to reflect their participation in the suite.
• Customer On-Boarding and Provisioning – When a customer signs up and is accepted, the application should be able to use the information provided at signup to provision a client instance and provide the necessary credentials, roles and access needed to the customer without any manual intervention or coding.
• Service Management and Configuration – When web services are used to provide the different components of an application, each service needs to be managed, versions need to be tracked and dependancies need to be respected. Without a management tool, this work needs to be done manually and can greatly complicate the job of managing new component rollouts.
• Contextual Logging – All servers and applications provide some level of logging – but if there is no mechanism to tie log information to users, clients and features, it can require a lot of effort to track down issues. Some sort of contextual information attached to logs speeds support efforts and improves overall customer support and reliability.

Taken together, these features require considerable planning and development effort to implement. They are not part of the core product value a SaaS or Cloud Service delivers, but they make the difference between a business model that operates and scales successfully and one that becomes burdened by too much overhead to scale repeatedly and successfully across enough customers to reach profitability. As you can see, these components will technically scale in relation to the number of clients the service has, not the features in use by clients and users.

SaaSGrid is one of a relatively small number of middleware servers or platforms that vendors can build on to provide these operational features and it will run either directly on servers or as virtualized servers on a service like Amazon Webservices. In either a virtualized or “bare metal” installation, a tool like SaaSGrid can lower the effort required to develop and implement a SaaS or Cloud product by as much as 60%.

So, when we get down to it – fully leveraging the capabilities of the Cloud for an application means understanding component-based architecture, the expected scaling characteristics and use patterns of each component, and finally the “orchestration” or web services messaging that allows all the components to act transparently across many clients as one application. On the business side, all of these elements have to be packaged and modeled to develop client offerings that have prices aligned to value and use. And – building a SaaS or Cloud product means planning for both client and operational functionality.

<Read the previous article in the series<

Do you need to know more about developing SaaS and Cloud Services to develop your application and business model? You should consider joining us at:

How To Eat An Elephant

Developing a Real-World 
SaaS Product Roadmap

28th April 2011

from 8:30 am to 1:30 pm
  (including breaks)

The Venue

Embassy Suites – Southeast

7525 East Hampden Avenue

Denver, Colorado

Prices

• How to Eat an Elephant Workshop – Standard price – $499
• Register NOW for our Denver Workshop and take advantage of our Apprenda-SaaSGrid Special Price
  

Agenda

• The Business Case for the Cloud - Assess if the Cloud is for you by identifying the business opportunity, investment needs, risks, etc.
• SaaS/Cloud Product Strategy – Define the competitive and positioning strategy for your product within your context and your market.
• Your Cloud Business Model - Define how your product will make money and what is needed to make it happen.
Developing your SaaS/Cloud Product Roadmap – Develop a tactical roadmap to align funding, development and marketing objectives.
• Key Technical & Functional Requirements of a SaaS/Cloud Product – Understand the architecture and functional elements required to deliver your service smoothly and profitably
• Cloud Readiness Checklist – Identify key requirements of SaaS and Cloud operations, customer support, legal, financial considerations, sales and marketing that you will need to prepare for to make your product successful.

You can take the workshop by itself or in conjunction with

SaaS University

THE Industry’s Most Comprehensive Cloud Application Conference

At the Embassy Suites, Southeast – Denver, Colorado – April 26th to 28th 2011

Prices

• SaaS University Package – Regular Admission – $999
• SaaS University Early Birds – $799 (Early Bird Registrations On April 15, 2011)

Get an additional discount from Scio – Regardless of when you register

• Because we are participating in this event, you can get an additional $150 off your registration.
• Just enter the Scio’s Discount Code: SCIOsave150 when registering for SaaS University.

Go to SaaS University Denver Registration Page

This is the third article in a series with excerpts from this year’s workshop titled, “How to Eat an Elephant – Developing a Real-World Product SaaS Product Roadmap.” Each of these articles will cover one part of core subjects in our Cloud Product Roadmap.  If you are just joining us – you can return to the first article in the series and find out more about the workshop background and other articles in the series.

Cloud Product Roadmap – Technical Architecture

Excerpt: Reviewing the Roadmap Template for Technical Architecture

In this installment, we going to look briefly at what needs to be in your Technical Architecture plan rather than review a part of the presentation from the workshop.    We provide MS Word templates for each element of the Cloud Product Roadmap, which can be modified and brought together to document your plan.

So just for the sake of understanding the outline – let’s review the major points of a Technical Architecture plan as for SaaS and Cloud products we see it:

• Technical Architecture Design Model
• Technical Architecture Design Process
• Architecture Design Elements
  • High-Level Architecture Requirements
  • Application Architecture Design
  • Tenancy Approach
  • Scalability Approach
  • Metering Approach
  • Security Authorization & Authentication Approach
  • Audits & Compliance Approach
  • Provisioning & Implementation Approach
• Gap Analysis & Third-Party Solutions
• Cost Estimation & Optimization

It is important to note at this point that this is not the complete technical plan. The roadmap also needs to include Development and Maintenance Processes, Operations and the Support Approach. You will also notice something it doesn’t include: Long, detailed descriptions of end-user functionality. This is because we recommend companies with SaaS and Cloud products use Agile development processes. Using an Agile approach means that the application is planned up front at a high-level using “user stories” that describe the main points of functionality needed by users. These descriptions will be broken down in more detail during the development process, but within the context of the evolving application. This allows the product manager to consider what the application needs to do, but spend less time on about how the functionality is implemented. Today developers leverage a wide range of tools and frameworks to deliver rich functionality more quickly and with better quality than in previous years. But each set of tools has its own implementation pattern. A product manager that spends too much time specifying HOW things need to be done, rather than focusing the outcomes, is likely to be wasting time on specifications that don’t leverage the frameworks properly or creating work-arounds with increased risk and development effort.

Another aspect of this plan are the elements included specifically for Cloud and SaaS applications. Tenancy, Scalability, Metering, Provisioning and Implementation are all architectural issues that concern online applications. In our experience, it is common for product management to focus on end-user functionality and leave the specifications for operational purposes until a later time. In many cases, this means the development team either ends up “back-porting” critical functionality into the application or tacking it on the side somehow. This usually means that important opportunities to do it right the first time are lost and in many cases issues like metering never have the flexibility they need. The point of our templates is to help our clients to consider these and other critical elements at the right time in the planning process – before choices are made and effort is expended that is hard to back away from.

The Design Process

If you have an existing product or assets in the form of technical assets (libraries, web services, algorithms, etc.) you can migrate, the first thought is of course leverage them to build the new Cloud or SaaS product. Using them provides a level of comfort and could lower the total cost of development. However, depending on what the assets are and what technologies are involved, they may also become a constraint that will prevent you from optimizing costs, performance, processes and the user interface. ISVs with existing products quite often consider ways to leverage their existing assets – even going so far as to just host instances of their application for clients ASP style to get something in the market quickly. Their basic thought is that the value of SaaS or Cloud all based in the delivery model. Typically startups design their applications from the ground up because they rarely have technical assets to consider.

Existing assets that are not already setup for the Cloud can also suffer from a lack of operational features to automate customer on-boarding and implementation, feature packaging and pricing, and usage metrics. Conversely, building from the ground up doesn’t mean you have to build everything. Using the Cloud model, you can leverage best of breed components to fill the operational gaps and allow you to focus on developing your core value.

You can also leverage specific SaaS and Cloud platforms that provide a many of the operational elements of Cloud products and usually enforce a level of code consistency. These can greatly lower the effort required and can offer capabilities that you can use immediately but would rarely put in your first product version. The build or buy decision in this case is usually a product of business priorities for budget, effort and the time required to bring a product to release.

So, in essence, the design process is a series of choices and compromises that finally arrive at the approach for the final product. The choices can be difficult but are usually made easier by making a series of strategic business and product decisions before you begin to consider the technical architecture. Making decisions on the technical architecture before key business and product decisions are made can lead to wasted development effort and increased risk that the development process will take longer than planned.

Special Attributes of Cloud Products

Current Cloud products, particularly those that take advantage of services like Windows Azure, can scale compute, storage, and delivery in direct response to needs in a specific dimension. That means if the application needs more storage, but doesn’t need more compute power, storage capability can be scaled up (or down) by itself. Conversely, if the application needs to process a great deal of data, it can add compute until it reaches a satisfactory performance for the job at hand. This ability to scale elements of the application separately provides opportunities to approach design problems in new ways. Where before we scaled simply by adding more servers, which included all elements whether we needed them or not, we can now scale just what we need to meet demand. This changes the design process to include considerations for issues like:

• What processes can be handled by a compute role, possibly from a queue, and processed in the background to reduce front end pressure?
• What degree of scalability will be required by each process?
• How will the application scale up and down? What will be monitored and how will it trigger change?
• What types of data will the application use and what resource can be used to store it?
• Are there content distribution needs that could take significant bandwidth?
• Does our scaling model fit within our pricing, packaging and overhead model? Are there better ways to accomplish same end with a lower overhead? What are the trade-offs?

Each cloud platform has its own capabilities and design patterns so there is a learning curve in deciding which applies to a specific product and project. But once basic decision is made for the platform, the next level is to consider how to design the application so that it can scale and leverage the platform transparently and make the best use of its strengths. It is best not to duck the decision and just go for a simple virtual machine approach because, with the exception of a few special cases, most of the value leveraging a cloud platform will be lost in the process.

If working with the interplay of decisions between your product strategy, technical architecture and business model is something you are struggling with – you should consider joining us for our workshop!  It will help you parse your priorities and bring together a roadmap for product development that meets your needs.

<Read the previous article in the series – Next article>

This series will be covering more in the days leading up to the event. But reading these excerpts will not give you all the material and is no substitute for attending and joining in the discussion.

How To Eat An Elephant

Developing a Real-World 
SaaS Product Roadmap

28th April 2011

from 8:30 am to 1:30 pm
  (including breaks)

The Venue

Embassy Suites – Southeast

7525 East Hampden Avenue

Denver, Colorado

Prices

• How to Eat an Elephant Workshop – Standard price – $499
• Register by April 1st for our Denver Workshop and take advantage of our Early Bird Pricing

Agenda

• The Business Case for the Cloud - Assess if the Cloud is for you by identifying the business opportunity, investment needs, risks, etc.
• SaaS/Cloud Product Strategy – Define the competitive and positioning strategy for your product within your context and your market.
• Your Cloud Business Model - Define how your product will make money and what is needed to make it happen.
Developing your SaaS/Cloud Product Roadmap – Develop a tactical roadmap to align funding, development and marketing objectives.
• Key Technical & Functional Requirements of a SaaS/Cloud Product – Understand the architecture and functional elements required to deliver your service smoothly and profitably
• Cloud Readiness Checklist – Identify key requirements of SaaS and Cloud operations, customer support, legal, financial considerations, sales and marketing that you will need to prepare for to make your product successful.

You can take the workshop by itself or in conjunction with

SaaS University

THE Industry’s Most Comprehensive Cloud Application Conference

At the Embassy Suites, Southeast – Denver, Colorado – April 26th to 28th 2011

Prices

• SaaS University Package – Regular Admission – $999
• SaaS University Early Birds – $799 (Registrations By April 1st, 2011)

Get an additional discount from Scio – Regardless of when you register

• Because we are participating in this event, you can get an additional $100 off your registration.
• Just enter the Scio’s Discount Code: SCIOsave100 when registering for SaaS University.

Go to SaaS University Denver Registration Page

Installment 2: Our 2011 Workshop Series

This is the second article in a series with excerpts from this year’s workshop titled, “How to Eat an Elephant – Developing a Real-World Product SaaS Product Roadmap.” Each of these articles will cover one part of core subjects in our Cloud Product Roadmap. If you are just joining us – you can return to the first article in the series and find out more about the workshop background and other articles in the series.

Cloud Product Roadmap – Product Strategy

Excerpt: Lean Product Development and the Customer Development Process

The Product Strategy section of our Workshop covers the Lean Product Development approach and how it leverages the Customer Development Process. One of the opening slides mentions this quote, “Product strategy is like a roadmap, and like a roadmap it’s only useful when you know where you are and where you want to go.” (McGrath 2001)

This is the core idea behind our Product Strategy presentation and our Cloud Product Roadmap – helping companies considering SaaS and Cloud products to find where they want and need to go.

Lean Product Development rests on a basic premise: The product features that customers will value are unknowns. In the case of a software, regardless of how it is delivered, that means the features and services the application will offer are simply a hypothesis until they have been actually evaluated by users in their own context and use. By using Agile development and practices and evaluation by key customers, product management seeks a minimum feature set that will provide the greatest value while reaching the widest customer coverage. The Agile development approach provides a system of relatively short development cycles or iterations that produce features that users can evaluate immediately.

The Customer Development Process provides the basis for customer involvement, particularly during early product development. The founding team seeks clients who can understand the product vision. These clients will become early adopters and customer development partners during application development. The Agile development iterations are used to test the feature hypotheses with the customer development partners to validate that the features developed provide real value and will drive sales. The point is to find a product that reliably produces value for enough customers to sustain a business model that can be scaled.

Based on Customer Validation, the process continues into creating market demand and scaling sales to reach positive cash flow. The product development doesn’t end however, it continues throughout the lifecycle of the application as the customer pool grows, continually feeding discovery and learning. At the same time, the company itself manages a process of transition from being a product development organization to an operational machine that can continue to execute and serve customers as sales scale.

The key starting point for this process of product and company building is finding the Minimum Viable Product (MVP). This is a product version with the minimum features needed to solve the core problem of the target market. In most cases, it is a lot less product than is necessary for a market release. This is an important difference from the traditional product development process where the aim is to bring together as robust and complete a feature set as possible that will fend off possible competitors and produce an apparently over-whelming feature advantage. This is possible because traditional product development processes depend on the assumption that the market is known and the needs of users are fully understood. It works well when the product line has a solid history of success and the product management team has been participating in the market for some time.

Internet-based applications and services, however, have the possibility of reaching new markets and customer segments that were out of reach in the locally-installed, licensed model – even for ISVs in the market with products. While a SaaS or Cloud product developed with traditional product development methodology could capture its existing customers, it could easily miss newly available market segments with unexplored problems.

To address this gap, Lean Product Development and the MVP approach are aimed at testing the value hypothesis and allowing the visionary early adopters to “fill in the gaps” when it is validated that the MVP is solving a real problem. If the MVP isn’t solving the core problem, the cost of re-evaluating and approaching the opportunity from a different direction is small and early adopters can aid in defining the issues contextually. In this approach, the risk of wasted effort and time are minimized, and the opportunity for clarity in solving the real problem is greatly improved. Once the MVP is proven, the vision can continue to be achieved in small increments without the waste of producing a laundry list of features that in the end no one will pay enough for to realize a profit.

The advantages of Lean Product Development:

• Reduces the risk in bringing a new product to market
• Reduces investment prior to positive cash flow
• Accelerates time to market with a viable product
• Aligns product features with proven customer needs
• Provides a rapid, dynamic feedback loop from the customer that drives product design, product packaging, price structure, and competitive positioning

The competitive positioning issue is one that is worth a few extra words. The Customer Development Process engages customers and creates a shared sense of product destiny. In turn this increases customer satisfaction, loyalty and retention. These are critical to success for online services like SaaS and Cloud Products. It produces a product that fits a client base tightly and is a barrier to competition. It has been shown that products with a Replace Strategy need to be perceived to be nine times better than the product they replace to gain market traction. The longer a customer is retained in a Lean Product Development model, the greater the barrier the competition will have to overcome.

<Read the previous article in the series – Third Article in the Series>

This is just one of many critical subjects we cover in our workshop.

This series will be covering more in the days leading up to the event. But reading these excerpts will not give you all the material and is no substitute for attending and joining in the discussion.

How To Eat An Elephant

Developing a Real-World 
SaaS Product Roadmap

28th April 2011

from 8:30 am to 1:30 pm
  (including breaks)

The Venue

Embassy Suites – Southeast

7525 East Hampden Avenue

Denver, Colorado

Prices

• How to Eat an Elephant Workshop – Standard price – $499
• Register By April 1st for our Denver Workshop and take advantage of our Early Bird Pricing

Agenda

• The Business Case for the Cloud - Assess if the Cloud is for you by identifying the business opportunity, investment needs, risks, etc.
• SaaS/Cloud Product Strategy – Define the competitive and positioning strategy for your product within your context and your market.
• Your Cloud Business Model - Define how your product will make money and what is needed to make it happen.
Developing your SaaS/Cloud Product Roadmap – Develop a tactical roadmap to align funding, development and marketing objectives.
• Key Technical & Functional Requirements of a SaaS/Cloud Product – Understand the architecture and functional elements required to deliver your service smoothly and profitably
• Cloud Readiness Checklist – Identify key requirements of SaaS and Cloud operations, customer support, legal, financial considerations, sales and marketing that you will need to prepare for to make your product successful.

You can take the workshop by itself or in conjunction with

SaaS University

THE Industry’s Most Comprehensive Cloud Application Conference

At the Embassy Suites, Southeast – Denver, Colorado – April 26th to 28th 2011

Prices

• SaaS University Package – Regular Admission – $999
• SaaS University Early Birds – $799 (Registrations by April 1st, 2011)

Get an additional discount from Scio – Regardless of when you register

• Because we are participating in this event, you can get an additional $100 off your registration.
• Just enter the Scio’s Discount Code: SCIOsave100 when registering for SaaS University.

Go to SaaS University Denver Registration Page

Introduction to Our 2011 Workshop Series

This is the first article in a series I will be writing over the next several weeks with excerpts of this year’s workshop titled, “How to Eat an Elephant – Developing a Real-World Product SaaS Product Roadmap.” Each of these articles will cover one part of core subjects in our Cloud Product Roadmap.

Background

First, some background on our workshop. The concept behind the workshops comes from our consulting experience at Scio. We provide Nearshore Product Development for SaaS and Cloud products from our Development Center in Morelia, Mexico. Our clients come from a wide range of industries and cover the range from single entrepreneur startups to multi-national corporations. We focus primarily on the Americas because that is where we can leverage our collaborative Nearshore model best, but we also provide services for companies in Europe and Australia where our background with SaaS applications is particularly important to the projects. Our services center around software development for SaaS and Cloud applications, but in the course of developing apps for our clients we also realize it is critical we contribute what we can to their success.

Over the years we have been providing our services we have found that clients repeatedly hitting the same “bumps” in the road to releasing a service. Some of the issues are business and some are technical. In response, we began to develop consulting services that could help our clients avoid those problems and have a clearer picture of the way forward. These services are strong and well-received, but basically focused on the needs of a single client prior to development by our team. They don’t scale in a way that we could easily provide them in a more generic setting to multiple companies. So – to fill that gap – we developed a more formal approach to what we began to call the Cloud Product Roadmap.

The idea of a Product Roadmap is not new and we’re certainly not the only ones to use the idea. Our particular focus however brings a concentration on the factors that are critical to success in the field of SaaS and Cloud Services. Broadly, our roadmap leverages the concepts of Agile Software Development, Lean Product Development, Customer-Driven Product Management, and the collaborative environment they require at all levels of the project. From our experience and a growing number of practitioners in the field, this is the secret sauce behind a growing number of successful SaaS and Cloud products. The elements of this roadmap are increasingly seen as the standard for product development and management in the field.

The workshop itself is an intensive, interactive discussion of the critical issues and decisions that need to be made to launch, manage and maintain a successful SaaS or Cloud application. It covers both the business and technical aspects involved as well as the iterative cycle of decisions that have to be navigated to arrive at a complete roadmap. The events are intentionally small to provide more opportunities for discussion and adjustment to the needs of the attendees.

So – what do we talk about in our workshop? Here is an except from two slides in our Business Model presentation:

Cloud Product Roadmap – Business Model

Excerpt: The Democratization of Entrepreneurship

A successful business model in SaaS and Cloud Products evolves from a series of iterations between the concepts for the product and the business that supports it while deriving income from the value it provides clients. The process has been best conceptualized in the writings of Steve Blank and Eric Ries and identified as the “Lean Startup.”

The key point is that the ideas behind business model development and the process of developing a successful software product have changed in the last few years. Experience and technology have come together in a way that makes it much easier for individual entrepreneurs to enter the field.

Consider the traditional barriers that confronted entrepreneurs:

• Long, technically-driven development cycles – A lot of the basic functionality required didn’t exist. There where no models or platforms to build on. Development required research and highly-skilled, technically creative development teams. Development cycles were long, feature lists were exhaustive, and the risks were high. Imagine a development cycle of more than a year for a platform that has a regular renewal cycle of three years. Add to that an implementation environment that varies from client to client because they are all isolated. There is a lot of risk to absorb in taking on a project like that and most individual entrepreneurs don’t have that kind of resources.
• The high cost of the first customer – In this environment, the first customer implementation carries tremendous cost and risk. If there is a failure in the implementation or the product fails to meet expectations, it becomes very difficult to recover. Is the product wrong or the customer a unique case? It is hard to know. If you go forward assuming this case is unique, you continue to carry the risk that you have spent a lot of money going down the wrong road. If you assume this is a clear indication that your product is at fault, you could increase your total cost and risk even more by spending the effort to fix the perceived problems. This is exactly the risk that high license fees had to address. The entrepreneur fronting the development of a complex product is taking a lot of risk in an installed environment.
• Limited financing options – The high capital needs and limited options available for a pool of thousands of new businesses created a focus on funding rather than the product itself. This was the era of the one-page business model and the endless cycles of meetings with venture firms in Silicon Valley.
• Expertise in entrepreneurship and product development concentrated in a few places – The skills and resources needed to form a successful team concentrated in parallel with the financial firms that could handle the risk and investment. Outside of Silicon Valley and a few other areas, it was very hard to find resources.
• High failure rate – Entrepreneurism is a process of failure. If you are averse to risk and failure, your upside is badly constrained. With the high investment required, only a few could stand the risk of a new project.
• Slow adoption of new technology – By its nature, the success of a software product depends on the adoption of the basic unit of implementation – the computer or platform that runs the software. If the initial cost is high, skilled resources are limited, and the knowledge of the value that can be derived is low – adoption is limited to the few brave souls with the vision and resources to take the plunge. When communication itself was slower and less driven by the individual, it was very hard to build acceptance of new technology.

What has changed?

• Compression of the product development cycle – Instead of trying to cover every possible aspect of a founder’s vision, current product development processes focus on the minimum number of features required to deliver value. Using Agile development techniques, a functional application can be evaluated much sooner and put in front of customers at a much earlier point. Add this to the ubiquitous delivery medium of the Internet and you have the capability to reach a wide range of prospective customers in a very short period of time. This allows you to leverage customer much sooner in the development cycle and correct your course while your risk is still manageable.
• Lower funding requirements – Over time the number of tools and services that lower the effort required to build and implement a product, especially in current cloud configurations, has increased geometrically. This lowers the time-to-market and investment needed, which creates an environment where investment can be forestalled until a ramp up is justified by market acceptance, positive cash flow and real customers.
• Funding tuned to encourage and manage the search for a sustainable and scalable business model – Smaller steps in the development cycle, success-based funding, with a focus on waiting for key investment until a repeatable and sustainable business model is found. In fact, in many business to business models, venture funding is not needed at all. Positive cash flow and traditional business instruments can carry the load.
• Entrepreneurship recognized as a management science - The overarching process and philosophy is well understood. A successful business model is not luck. It is achieved with a roadmap approach that can be repeated over and over.
• The consumer Internet paves the way – The acceptance of the Internet by consumers and the change in their perceptions of technology is becoming part of business DNA.

The Second Installment in this Series is now Available >

So – Are you considering or developing a SaaS or Cloud Product? Are you operating a Service that isn’t reaching it’s potential? Do you want to know more about how you can leverage the success others are having in the field?

• How are you going about the process of business model and product development? Is it serving you?
• What do you know about current techniques and experience in the field? Can you evaluate which ideas could work for you?
• Do you have a product roadmap?  Do you know how to put one together and use it?
• Do you know how to navigate your product to a successful launch while minimizing your cost and risk?
• Do you know what it takes to operate and maintain your service while continuing to respond to your customers needs?

…This workshop answers these questions and many more. It leverages our field experience across many projects and many situations

How To Eat An Elephant

Developing a Real-World 
SaaS Product Roadmap

28th April 2011

from 8:30 am to 1:30 pm
  (including breaks)

The Venue

Embassy Suites – Southeast

7525 East Hampden Avenue

Denver, Colorado

Prices

• How to Eat an Elephant Workshop – Standard price – $499
• Register By April 1st for our Denver Workshop and take advantage of our Early Bird Pricing

Agenda

• The Business Case for the Cloud - Assess if the Cloud is for you by identifying the business opportunity, investment needs, risks, etc.
• SaaS/Cloud Product Strategy – Define the competitive and positioning strategy for your product within your context and your market.
• Your Cloud Business Model - Define how your product will make money and what is needed to make it happen.
Developing your SaaS/Cloud Product Roadmap – Develop a tactical roadmap to align funding, development and marketing objectives.
• Key Technical & Functional Requirements of a SaaS/Cloud Product – Understand the architecture and functional elements required to deliver your service smoothly and profitably
• Cloud Readiness Checklist – Identify key requirements of SaaS and Cloud operations, customer support, legal, financial considerations, sales and marketing that you will need to prepare for to make your product successful.

You can take the workshop by itself or in conjunction with

SaaS University

THE Industry’s Most Comprehensive Cloud Application Conference

At the Embassy Suites, Southeast – Denver, Colorado – April 26th to 28th 2011

Prices

• SaaS University Package – Regular Admission – $999
• SaaS University Early Birds – $799 (Registrations By April 1st, 2011)

Get an additional discount from Scio – Regardless of when you register

• Because we are participating in this event, you can get an additional $100 off your registration.
• Just enter the Scio’s Discount Code: SCIOsave100 when registering for SaaS University.

Go to SaaS University Denver Registration Page

The relentless change brought to us by the consistent doubling of computing power that Moore’s Law describes continues and is now likely to change at least some SaaS applications in the near term.  What do I mean? Consider – we now have a very competitive mobile application market and thanks to Google Chrome and now Apple Safari, it has crossed to the desktop on browsers.

Meet the New Paradigm

The event that brought this to mind was the announcements of the release of Safari 5.o.  Leaving out the typical “improved performance” claims – two things were apparent – it is now a platform and it is designed for use in a cross-platform, mobile environment. On the platform side, Safari has joined Chrome in providing an extension system that allows developers to in effect, build secure and stable, rich clients into the browser. We’ve seen this for a while in the form of the “app stores” that are proliferating for mobile devices like smart phones and the “iPad” category (however you define it).  On the mobile, cross-platform aspect, the browser is now tuned for mobile users.  It is very noticeable if you try the new Reader function of Safari. It is quite usable on a desktop or laptop, but it really shines in the limited real estate of mobile devices. Multiple page articles merge seamlessly into one. Space wasting banners, sidebars and menus disappear. The browser becomes a credible, focused article reader for all devices.

What does this mean for SaaS? Take this evolving “browser as a platform” trend together with the announcement of iOS 4 (the artist formally known as the iPhone OS) and the growth of the Google Android and Chrome OS and you have a quickly changing landscape of operating systems tuned for a rich mobile environment and a browser-centric application implementation system. These advancements mean the expansion and adoption of HTML 5.0 is moving even faster than many of us thought. They will make the often tricky environment of JavaScript and Ajax less of an issue and the user experience of properly-tuned SaaS applications much more fluid and “desktop like.”  It means that locally-installed, OS dependent applications are becoming ever less relevant and cross-platform, network-delivered services are becoming increasingly rich and useful.

Frankly, as interesting as this news is, it also points out that SaaS is a very fluid environment. Keeping ahead of it is increasingly difficult. Knowing how to manage a SaaS product and chart a plan to navigate development is critical. Knowing what you need to support scalable SaaS operations and what you should embed in the application is critical. Understanding your user environment and what is expected in your market is critical. The list goes on and there has to be a way to understand the landscape and to make the choices easier. And the point of this article is – there is – it is SaaS University.

As a company, Scio has stayed involved with SaaS University because it answers the need our clients and the SaaS community has to have current knowledge about our industry and important issues. Because Softletter produces regional events quarterly, you can plan to attend when and where it makes sense and take advantage of the evolving content as you need to. The tracks and workshops are well attended, but generally sized so the sessions can be interactive and remain relevant. If you’ve been to the larger, vendor-led conferences – SaaS University offers content that is focused on providing valuable insight to SaaS entrepenuers.

The next SaaS University event is in Washington DC, July 20-22, 2010. There is a full two-day agenda of sessions in two tracks covering a wide range of subjects and a third day that offers a choice of four in-depth workshops. On that point in particular, I want to highlight our own workshop, Charting Your Course to SaaS.

Charting Your Course to SaaS – SaaS University, Washington DC, May 22

This is the third time we’ve offered this comprehensive workshop on SaaS and it continues to evolve as we respond to the needs of our participants. Following our joint workshop with Jim Geisman of Software Pricing Partners, we’ve continued to tighten the content and for SaaS University, will offer a more interactive format for this workshop, especially during the afternoon. The aim is to keep it small enough to allow everyone a chance to move the discussion toward the issues that interest them most.  It remains however, the only workshop that covers the business, operational and development issues that are critical to success in SaaS.

Companies that can benefit by attending this workshop:

• A new venture or as an ISV with on-premise products considering developing a SaaS offering
• A service company with significant vertical expertise than could be delivered and monetized in a SaaS model.
• An existing SaaS provider who made choices opportunistically that now constrain growth and cash flow.
• A SaaS entrepreneur with limited funding that needs to achieve positive cash flow early with products that evolve with the market.

Company challenges this workshop can help overcome:

• Building out a suite of products but are unsure of the strategies, metrics, and operational models needed to grow.
• Developing a framework for sorting out technical and strategic choices required to move to the SaaS business model.
• Facing significant operational problems including efficiency while keeping churn under control in an existing SaaS product.
• Developing a product roadmap and unsure of what can be accomplished and timeframes

Topics to be Covered:

• How is a SaaS Product and Business Different?
• Reference Framework for Creating Your Roadmap
• Making Strategic Development Choices
• Operating A SaaS Business by the Metrics
• 10 Ways to Fail at SaaS
• Applying Lessons Learned to Your Issues

Who Should Attend?

This workshop and seminar is important for anyone considering a SaaS product, in the process of developing a product or offering a product that hasn’t reached its potential, including: Entrepreneurs, CXO’s, product managers and key executives in startups, vendors moving to SaaS or existing SaaS companies.

About Your “Professor”

Mike Dunham, Vice President, Service Engineering for Scio Consulting, has over 25 years background in the development and introduction of new technology working with startups, government and the largest enterprise software companies. He has worked with Scio for five years, regularly authors articles on SaaS and the software industry and hosts a series of podcasts on SaaS best practices. Mike leads Scio’s professional services helping companies develop and bring to market new SaaS offerings.

The workshop costs $695, but you can get an Early Bird Price of $495 when you combine it with your SaaS University registration - total package price of $1290. As a way to bring together a great amount of information in a short period of time, the combined package is a great opportunity. As we get closer to the event, I’ll expand on the agenda, but this is a great time to start planning and get your team together to attend SaaS University in Washington, DC!  I hope to see you there…

Our workshop with Software Pricing Partners following the SaaS Summit: All About the Cloud is now finalized! Seating is limited so please check the details below and sign up NOW:

SaaS Offerings: How to Develop, Price, Operate, and Succeed

• One Day SaaS Executive Workshop Covering Technical and Business Topics
• May 13, 2010 at the Donatello Hotel (near Union Square) San Francisco

Executives responsible for succeeding in the SaaS market need to make a series of critical choices in developing, packaging and selling their offerings. This one-day workshop provides the insights and tools needed to make the right choices.

Many of the challenges SaaS companies face can be met by balancing and integrating technical considerations with the business aspects of SaaS. Companies that can do this can bring their products to market rapidly and become cash-flow positive quickly.

This workshop is the first to integrate pricing and business models with development and deployment. The workshop will be held on May 13th, the day after the OpSource and SIIA event SaaS Summit: All About the Cloud at the Westin St Francis Hotel on Union Square in San Francisco. The workshop venue is conveniently located one half-block from the St Francis, at the Donatello Hotel on Post Street.

Which companies can benefit by attending this workshop:

• A new venture or as an ISV with on-premise products considering developing a SaaS offering
• A service company with significant vertical expertise than could be delivered and monetized in a SaaS model.
• An existing SaaS provider who made choices opportunistically that now constrain growth and cash flow.
• A SaaS entrepreneur with limited funding that needs to achieve positive cash flow early with products that evolve with the market.

Company challenges this workshop can help overcome:

• Building out a suite of products but are unsure of the pricing and operational models needed to grow.
• Developing a framework for sorting out technical and strategic choices required to move to the SaaS business model.
• Facing significant operational problems including efficiency while keeping churn under control in an existing SaaS product.
• Ensuring the pricing model, development framework and operational plan will work in complex, highly competitive markets.

Topics to be covered:

• What Makes the SaaS Model Different and Difficult?
• Making Development Choices Strategically
• How to Choose an Effective Pricing Metric
• Creating a Lean Product Development Roadmap
• Using Packaging and Licensing to Increase Success
• Finding the Right Price Levels and Discounts
• Operating a SaaS Business
• Auditing Your Plans with a SaaS Reference Framework

Because of the value of this workshop, the importance of the SIIA/OpSource conference for SaaS providers and the convenience of the venue, this is an excellent opportunity to “put it all together.” The workshop content makes it well suited to a mixed group of business and technical members of your team because it joins the issues of both sides into a single view.

Per Person Pricing

Group Promo Codes

Three or more members of the same team:

• On or before May 3rd – 57KA5G
• After May 3rd – 7GNGBH

All attendees will receive copies of the workshop materials. The workshop fee also includes a “working lunch” and refreshments during the day.

Secure Registration with Acteva.

Hotel

The Donatello Hotel has a limited number of rooms available for workshop attendees at $139 during the period of May 9-14. This is an excellent opportunity to save with a very convenient location if you are also attending SaaS Summit/All About the Cloud Event.

• To receive this discounted rate, you must the contact the hotel directly at 415-441-7100 – and ask for In-House Sales and  the “SCIO Pricing” discount.

About the Speakers

Michael Dunham, VP of Service Engineering – Scio Consulting
Mike Dunham has more than 20 years of hands-on experience helping major corporations and government agencies succeed in an increasingly technical environment. As Scio’s principal consultant, Dunham provides clients insight into trends that affect business and technology planning so the processes Scio uses can bring clients’ ideas to life. As the VP of Service Engineering, Michael defines Scio’s service products and operational processes. A native of Sacramento, CA, he holds a bachelor’s degree in business administration from the University of California at Davis.

Jim Geisman, Principal and Founder – Software Pricing Partners
Jim is an acknowledged expert in software pricing and, since founding the firm in 1982, has helped several hundred companies develop effective pricing models and strategies. His consulting spans established and emerging software companies delivering B2B solution via desktop, enterprise-class and, more recently Software-as-a-Service / on demand software. Jim has been a board member or advisor to several early stage technology companies. He holds degrees in Electrical Engineering from Tufts University and an MBA from Harvard Business School.

A quick introduction on our podcast:

SaaS is not a “one-size-fits-all” business. There are many options now for platforms and services you can use and the number is increasing every day. A lot of the information available is laden with marketing hype. How do you make the right decisions?

We’ve been helping companies transition to SaaS as startups and from traditional licensed software for several years and we’ve build up a practice we use repeatedly to navigate the choices. We’re bringing our practice to the Dallas SaaS University event as a workshop to help SaaS executives and entrepreneurs make the right choices for their business. We’re passionate about helping companies succeed in SaaS and we’d like to pass some of our knowledge on to you.

You can take this workshop combined with your signup to the University event or separately, but I encourage you to take advantage of the combined pricing that is available. This is not a “technical” workshop – we will be covering how the technical and business decisions SaaS requires impact your business and product strategy. We’ll be using interactive exercises to help you put the concepts into your context and build something you can take back to your team. It is a full day with a catered lunch and will be a limited group so you will have plenty of opportunity to ask questions and be involved.

UpDate! – Use Discount Code: SCIO100

Here’s the outline:

Charting Your Course to SaaS

Making the Right Decisions for Your SaaS Product

Overview – How is a SaaS Product and Business “Different”?

• Leaving 30 years of industry history behind
• Transitioning to a service-led model
• 10 ways to fail

Your Service is Different

• What does making the right choices mean?
• Understanding your market, product strategy, roadmap, supporting technologies, and skills needed.
• Knowing flexibility is key in SaaS

Sell the Right Product

• Map your core product and customer assumptions
• Consider test marketing plans
• Developing a go-to-market feature set

Make Strategic Development Choices

• Selecting services and platforms
• Selecting a technical architecture
• Making development and deployment choices

Operating a SaaS Business

• Understanding service-led business requirements
• Leveraging operational metrics
• Understanding end-user interaction in SaaS and product management

Who Should Attend?

This workshop and seminar is important for anyone considering a SaaS product, in the process of developing a product or offering a product that hasn’t reached its potential, including: Entrepreneurs, CXO’s, product managers and key executives in startups, vendors moving to SaaS or existing SaaS companies.

About Your “Professors”
Luis Aburto, CEO of Scio Consulting, is a veteran of international technology and engineering consulting for corporate and government clients in the U.S. and Latin America. Mr. Aburto is the founder of Scio Consulting, and in 2006 was responsible for focusing the direction of the company on SaaS enablement services. Luis has worked with a multitude of software companies of all sizes and across many industries, helping them make the transition to SaaS.

Mike Dunham, Principal Consultant of Scio Consulting, has over 25 years background in the development and introduction of new technology working with startups, government and the largest enterprise software companies. He has worked with Scio for five years, regularly authors articles on SaaS and the software industry and hosts a series of podcasts on SaaS best practices. Mike leads Scio’s professional services helping companies develop and bring to market new SaaS offerings.

As I mentioned – there are several ways you can join us in this workshop and I very happy we have the opportunity to bring it to SaaS University. I’m looking forward to meeting many of my friends at SaaS University for the event. If you would like to know more about what we’re going to be doing or some help building the case so you can get company support to go, just let me know. See you there!

I came across a good paper by Joel York of Chaotic Flow over the weekend that started a flow of thoughts about ISVs. The article is titled, “The Top Ten Do’s and Don’ts of SaaS” and it made me wonder – where can someone considering developing a SaaS application go for the “ins and outs” of the field? It is fairly difficult to do without sifting through a lot of vendor-led material that, while good, is clearly biased or paying out some cash to go to a series of conferences – where again, you will surf through a wealth of vendor-led discussions regardless of the venue.

After some looking – I determined it isn’t all that easy. There are some good resources, but a simple Google search isn’t going to yield a lot of good resources without some digging. Outside of the listings on our blogroll (right sidebar of the index page), we (the Scio Team) are planning to develop some over a period of time, but for now I would like this post to be a starting point for a list of resources that we can build on to. Eventually it will migrate over to our new “knowledge center” but for now, we’ll add resources as we run across them (or you, our readers suggest them) to this post.

Key: NC= Free = No cost resource, R=Registration Required, $=Costs for attending or using

Conferences

• Saas University ($ – however you can join the Softletter SaaS University site by registration for free. Select the Welcome to SaaS U tab for information)
• SaaSCon ($) Computerworld’s Annual Industry Event
• SIIA (Software Information Industry Association) Events
• OpSource SaaS Summit ($ – Also provides links to upcoming webinars which are free for registration)
• IDC Software as a Service Summit – ($) Market research and field case studies from leading ISVs
• Cloud Slam ’09 Cloud Computing Virtual Conference (R, $ – but the price is low)
• Agile 2009 Conference - If you’re not using Agile principles in your development and product management practices – you probably should be. Of special interest is the Agile Product Management track
• Glue Conference - “The web is the platform” – explores the integration issues we’re facing as we move to web apps. ($)
• Upcoming Cloud Computing-Related Events – Giva Perry’s list (updated regularly).

Resources on the Web

• Wikipedia’s definition of SaaS, along with general facts about the area and references. (Free)
• SIIA, (Software Information Industry Association) – Software as a Service Resources. A wide ranging archive of webcasts and papers from the last four years from this association. (Some require membership, some free) – a good example you will find widely copied on the web: “Software as A Service: A Comprehensive Look at the Total Cost of Ownership if Software Applications“
• OpSource – Resources (Free). From their position as a leading SaaS hosting provider, this resource center remains one of the best available.
• SaaS resource listings from O’Reilly – (Mostly Free – some conferences are listed as well) The well-known industry resource has a lot to offer, both technical and business-led perspectives.
• IBM SaaS Resources – IBM is a vendor of managed hosting in the SaaS space and has offerings to facilitate ISVs moving to SaaS. This link leads to a number of resources (whitepapers, podcasts and webcasts) prepared for their community that are worth review.
• THINKstrategies Publications, Columns, Webcasts and Quotes – Research from one of the leading consultancies in the On-Demand space. (Free – some may require registration with vendors)
• SaaS Showplace – also from THINKstrategies
• Managed Services Showplace® – THINKstrategies MSP Directory
• SoftLetter – from Rick Chapman of SaaS University ($) Respected source for current data from inside the SaaS industry. (Softgram newsletter is free for registration)
• Chaotic Flow’s five-part series, “Transform your SaaS into a Web 2.0 Business” (Free)
• SaaS Scorecard from Joel York of Chaotic Flow. Also see – SaaS Model Economics and SaaS Success – Top Ten Dos and Don’ts (Free)
• IP Application’s Resource Center (R) – good resource and their blog is worth some time as well.
• Saugatuck Technology’s Research Library - (R & $ – Market research papers, some that are free with registration, some for a fee)
• Resource List from the Cloud Computing Group on LinkedIn – Cloud Computing Blogs & Resources
• Innovation Games – A very smart tool for Agile development and Agile development is key for SaaS products.
• Body of Work: Community and Social Network Research – Jeremiah Owyang of Forrester Research on Social Media. This is a key area all Internet-based businesses need to include in their business plans.

Alltop – Alltop is blog and news aggregator that has several groupings of sources of interest to ISV’s and start-ups in the On-Demand world.

• Virtualization
• Rich Internet Apps
• Cloud Computing (Includes SaaS)
• Project Management
• Enterprise (Includes SaaS and a broad range of “enterprise level” subjects)
• Product Management
• Startups
• Small to Medium Business (SMB)