I was recently reading Phil Wainewright's excellent blog on SaaS Applications on demand where he wrote that SaaS vendors like VCSonline.com need to use scalable SaaS services and architecture themselves, or die.  

Well, I am here to attest that when it comes to infrastructure, we are eating our own dog food, and loving it!  As for Phil's second point of building SaaS software on SaaS software, we see that as a medium to longer term trend but the more immediate need is a hybrid deployment model between open source and on-demand.

I believe SaaS is going to see dramatic growth based on our many CIO contacts and the over 300% increase in SaaS customers we have seen in the last 6 months.  That said there is still significant resistance and we have not yet hit the tipping point.

I would submit my top two SaaS needs from our perspective.  The resistance we see is two fold:

1) Demonstrating a secure, world class infrastructure and disaster recovery

2) Reluctance to go on-demand with no contingency should that fail to meet SLAs or security

The first point Phil covered well in his blog.  VCSonline.com has always had a leading SaaS project management solution but we struggled to provide adequate data center performance, security, and business continuity SaaS customers demand.

On top of the production challenges, managing the development environment (and all the developer laptops) with various patches and updates was more then a rapidly growing small company could handle.

VCSonline.com turned to a team of CoSentry in Omaha and PowerDNN to provide premier data center, server, and backup services that would simultaneously save time, money, and dramatically improved performance.  We now lease a combination of Dell Servers, CoSentry data center operations, and SWSoft virtualization, backup, and site management in one integrated package.  

We now have a high performance, cost effective, redundant, and scalable environment that is the envy of other SaaS companies.  We know we are doing something right as our immediate neighbors are PayPal.com and BankofAmerica.com.

As for my second point, the largest immediate barrier to SaaS is still the enterprise “on-site” vs. “on-demand” argument. 

I think SaaS vendors like us would be wise to consider a hybrid deployment approach.  We have an on-site source code option and a hosting option that allows companies to own the source code and deploy either on our datacenters or locally on their own.  They can also move the application when and if it makes sense. 

This allows companies to open up a pilot account with 1 user, scale to many users online, and bring the source code in house if necessary.
 
I suspect with the economy stalling and budgets tightening, more and more CIOs will take a long look at SaaS for their mid-office needs and have the precedence of doing so with the explosion of SalesForce.com and other SaaS tools.  Companies with a world class infrastructure and a hybrid deployment model will immediately benefit.
 
Ironically some day our children will ask "Dad, do you remember when people would install software on their own computers using disks?"  I will think back on days like today and say, "Yes, but barely son.  Those were dark times in IT best soon forgotten."

Virtually yours,
Nick Matteucci, MBA

About the Author: Nick Matteucci is a co-founder of VCSonline.com a web 2.0 project management software company headquartered in St. Louis Missouri. Mr. Matteucci is also an active board member and the Chief Technology Officer for the PMI ISSIG. When not obsessing over virtual project management best practices Mr. Matteucci enjoys spending time with his wife and three small children. He also enjoys travel, running, and all things automotive.

Bookmark this post: