Snake in the Sandpit – A History of SaaS

Most of us have heard of the term SaaS referring to ‘Software as a Service’. The idea of using software as a service first popped up in the late 1990s in order to allow sharing end user licenses in a way that reduced cost, and also shifted infrastructure demands from the company to the software provider. The term SaaS came into the mainstream language of IT when it is believed to have first appeared in an article called “Strategic Backgrounder: Software As A Service”, internally published in February 2001 by the Software & Information Industry’s eBusiness Division. It was quickly picked up as a model by most software development companies. In time this term has been morphed into a more general term which people now tend to use: ‘cloud based applications’.

So let’s take a brief history lesson in how SaaS came to be. In the 1960s, IBM and other mainframe providers conducted time-sharing or utility computing services, offering computer power and databases to banks and large organisations. Then in the 1990s with the expansion of the Internet, Application Service Providers (ASP) appeared. They provided small businesses with the service of hosting and managing specialized business applications. Starting from 2003, true SaaS became popular due to the increased speed of internet connections.

The point of this blog is not to provide a history lesson on SaaS, however I was prompted to put pen to paper when a customer kindly complimented our team at Enterprise Study on the service we provide, which has made me think about the term SaaS. One of the dangers of the term is that many developers of software focus on the first ‘S’ and not the last ‘S’. The success of a company is predominantly down to the people employed, the vision they share and the passion for what they do. Service is a key word that is directly linked to success. Service is not only what we give to our customers but is about how we treat each other within the company; respecting each other, supporting each other, encouraging each other and together, succeeding. As a leader it is by your example that all these aspects of service come together to create the values and ethos of the company.

As a software company, and in particular with the advent of cloud based applications aka SaaS, then it must be the last ‘S’ that differentiates how we support the users of the software that has been developed. It is important to make the software as easy to use, intuitive and safe for the users. However, all too often when something does not work as it is expected, we end up having to contact a nameless person via email or chat, or hold onto a support line for ages. This is not service and hence my point the later ‘S’ should not just be about how the technology is provided and paid for, but importantly how the user is looked after through their interaction with it.

In the last 10 years the advances in technology have made the access to a whole range of tools that help us go about our daily life much more accelerated. If you go on public transport everyone is either using a tablet, on their phone, or reading an electronic book. As a result do we now live a very reactionary life, and with this our expectations are that the software we use will work first time every time? It is thus even more important that companies that develop software remember that we, the users, still like the human touch, the reassurance that all is well, someone is on the case, it will be fixed and we can continue with our life again. It is really unacceptable to have to hold for 20 minutes on the telephone and then following a number of selections to get to technical support relieved that success is nigh to then be told to go to the website and check out the FAQ section – aargh! If you can’t find a fix there then you have to email. From this you may get a response 24hrs later or not at all. So back to SaaS, yes it has offered a great way to deliver software in a cost effective way but the message I believe in passionately is that developers of software must not forget the importance of the ‘Service’ word. If they do it is at their peril.

The challenge is always around scalability and often with success, software companies choose to invest in expanding sales but not the teams that support the customers in proportion as this erodes the margin. I think there is a readjustment happening whereby those software companies that have invested in first class support are being valued, and thus will deliver sustainable growth and stable strong businesses. The reputation of the software company is more enhanced, or eroded, depending on how their staff support the users. So let’s not ignore the last S in SaaS.

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