Everyone’s heard the buzz about SaaS or On-demand, as it is popularly known, for quite a while now. Thankfully, SaaS has gone beyond being just a buzzword, and its benefits are perceived as real now. Although SaaS may not be for every Independent Software Vendor, an ISV can afford to ignore the SaaS model of delivery only at its own peril.
Before considering transitioning to SaaS however, ISVs should accept the fact that making the move to on-demand will have a profound impact on every aspect of the business: including pricing, delivery, sales channels, product architecture, support and infrastructure.
The architectural changes involved in getting your product SaaS-ready can be quite complex, hence the engineering aspects of building a SaaS product should not be overlooked. On-demand products need to have user customization designed-in and remote development capabilities. Also, as SaaS allows for instant upgrades to be done across the customer base, it would typically follow agile or iterative methodologies.
Adopting agile or iterative methodologies in turn ensures that your product will not be over-engineered and will have just enough features for you to go live with just enough technology. The most important aspect of any SaaS architecture will be allowing for reusability, extensibility, availability, and a service oriented approach.
One limitation of on-demand software is that it is configurable by end-users for their individual needs, but there is a single code base for all customers (or tenants) which is not customizable for any one customer. Because of this, competitive advantage or differentiation based on the software itself becomes negligible.
However, SaaS vendors have woken up to this and have developed platforms that can accommodate customizations. This rich customization allows SaaS vendors to serve larger corporations, in addition to their typical customer base of small and mid-sized companies. All of this and a few other things promise to change the SaaS landscape soon – the next wave of SaaS is coming!
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"Online communities, iterative methodologies and software scalability" with Andres Camacho - Vice President of Engineering at Vinfolio 
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