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I find much of what I read in the media about the “issues” involved in developing SaaS products as silly – and sometimes just plain misinformed. Is it just me or are there just too many analysts with nothing else to write about?

When you develop products in a repeatable, production fashion, you have to step back occasionally and take the long view so you can properly discuss the process with clients. We’ve been involved in that exercise recently and I thought it might be useful to share the what and why of our approach to software development for online products.

When I wrote the recent article “SaaS: 10 Trends for 2010″ I used the phrase “Best Case SaaS.” I realized from feedback and some thinking afterward though that many people don’t share my vision of what it is.

We recently started a project with a new client from the UK to develop a SaaS application for them using Innovation Games and found them to be very useful in developing and prioritizing product features and development plans.

I’ve noticed there are broadly two camps when it comes to developing new services for the Internet: Those entrepreneurs that feel they must do everything themselves regardless of the hurdles they face and those that want to focus on their core expertise and leverage outside services where possible.

In this article, “Nearshore” refers to outsourcing software development to providers that are located in foreign countries in the same or adjacent time zones or that are geographically close to a client’s home country. For U.S. companies, this term describes outsourcing to providers located in Canada, Mexico and Central and South America. For companies in Western Europe, nearshore providers are logically located in Eastern Europe, the Middle East or North Africa. At Scio, we work primarily with customers in the U.S. using a combination of U.S.-based and nearshore resources from our Delivery Center in Morelia, Mexico.

The other day something happened that brought back a lot of memories. I have been an enterprise systems consultant for many years and in that time have been involved in a lot of interviews – both as a subject and an interviewer. One of the most difficult interview types is the “team interview” where a client team interviews the consultant team. With the economy pressing tough choices on everyone – team interviews on conference calls are a necessary evil – but after my latest experience I realized there is a whole generation of people who have never had to do it.

In part one of this series, we proposed two situations that are occurring in this tough economy:

* Startups with experienced founders and a strong product idea but limited funds and time to build a team.
* ISVs with existing products who are faced with dwindling sales, lowered product development budgets and increased pressure to roll out new versions and extensions for their product line.

We posed outsourced product development (OPD) as one possible solution, but also exposed a few of significant risks involved. So what issues do you have to consider when judging OPD vendors?

This is a tough time to be starting a business, but many people in technology or with deep industry experience who have been recently laid off are doing just that. Companies with existing product lines are facing tough choices too. Can you afford to sit on your hands while your sales dwindle? So let’s imagine you’re one of those folks…