5 Keys Challenges to Building a Profitable SaaS Product

With the growing trend of on-demand consumption, SaaS has now become the de facto standard for delivering software products. Many of the biggest software IPOs in recent times too have been SaaS-related. According to Gartner, the SaaS market was expected to experience 20.3 % year-on-year growth in 2016.

But, despite the positive outlook of the industry, there are many failed examples too. Since the boom of SaaS, several companies have come and gone.  It is shocking that the bulk of worldwide revenues is still being generated by just about ten top players in the industry.
The fact of the matter is many developers are grappling with the engineering and architecture complexities involved in building robust, scalable and profitable applications for the cloud.

This article is based on the lessons learned from developing our product, Techcello, a cloud-ready, multi-tenant Saas development framework. It highlights the key challenges that you need to address when you migrate your existing product to SaaS or build a new one.

Key Challenges & How to Overcome Them

1. Riding the Data Security Mammoth

Every CIO takes data security very seriously. With mounting risks of security breaches and hacking, it is safe to say that the right security credibility can act as a key differentiator in your product.

To build an “enterprise ready” SaaS application, security needs to be consolidated as a unified engine that connects subscription, tenant level security, data and usage restrictions, encryptions and user as well as role based privileges.

The architecture needs to have enforcements built right at the design level to ensure robust security of customer-specific data. Since enterprise structure varies drastically from one customer to another, it is necessary to provide the ability to change the business rules, workflow and data model at each customer level. Only then will you be able to ensure the manageability of the system and also facilitate changes in a systematic manner.

2. Conquering the Configurability Beast

SaaS model of delivery inherently brings with it the complexity of addressing multiple, and more often than not, conflicting requirements, which forces architects on a path of custom code development. Given the revenue model of SaaS, there is certainly no luxury in customizing the application for each customer. Many SaaS applications continue to remain in a single tenant/hosted model due to this reason. 

This is where a configurable architecture comes into play. Building each layer of the SaaS application with sufficient configurable options helps meet customer specific requirements through configurability rather than hardcoding.

The standard layers that need to be considered for configurability include UI, Subscription, Branding, Authentication, Role/Privileges, business rules, business processes, data fields and data storage.

3. Scalability, and how to tame the nimble-footed Leopard

SaaS is a volume game. The very nature of SaaS applications being delivered over cloud enforces a natural requirement for them to be scalable. But, one of the most widely held myths about SaaS is that cloud will automatically facilitate elasticity and the application architecture, therefore, need not address this aspect. Many SaaS providers realize this when their applications cannot stand a true scalability test – which spans across all the layers of your application.

The truth is: just because your cloud is scalable, it doesn’t mean your application is. Each layer of your application has to scale independently in a seamless manner in order to leverage the cloud model and take advantage of the on-demand resource consumption model. A strong architecture is thus needed at all levels of the software-presentation, application, database, back-end processes and so on.

4. Riding the Performance Horse

Technological innovation has resulted in users expecting lighting fast response from SaaS applications, irrespective of the volume of processing that happens behind the screens. For your SaaS product to remain the preferred choice among users, you have to make sure it performs according to their expectations.

Hence, architects need to take into consideration potential performance bottlenecks and build designs that can help leverage concepts like asynchronous processing, micro services architecture, multi-data availability, etc.

5. Integration, and how to tackle the Elephant in the room

More often than not, integration is the ugly step-child of a SaaS product roadmap, it is the elephant in the room that no one wants to work on. It’s no small challenge either, given ever increasing data sets, shrinking screen sizes, and shorter attention spans, which is why it can also become a huge competitive advantage in a SaaS product.

It is natural for enterprises to expect that a SaaS application would have the capability to seamlessly sync with a disparate set of internal and external systems, which form a part of the existing setup at the customer’s end.

Architects thus need to design the application as an open system with sufficient hooks to make sure that integration is feasible. A standard set of APIs should be made available so that integration with other SaaS and/or on-premise applications can be completed with minimal effort.

To build robust, secure and “enterprise ready” applications, SaaS providers must precisely address the above aspects. That’s the winning strategy for today, and most likely tomorrow.