A webinar to look at the multi-tenancy alternatives and the impact on SaaS multi-tenancy on software business and product management

1. Business
Implication of SaaS
Multi-Tenancy
July 16 2009

2. Agenda
 Speaker Introductions
» Mike Dunham
» Lincoln Ventures
» Rick Chapman
 Scio Consulting - Presenter: Mike Dunham
» Software as a Service - What is it?
» SaaS & Multi-tenancy
• Why is multi-tenancy important for SaaS?
» Multi-tenancy Approaches
 16 Ventures - Presenter: Lincoln Murphy
» Business implications of the tenancy models for a SaaS provider
 Softletter - Presenter: Rick Chapman
» Impact of Communities and Business Intelligence in SaaS
 Q&A
2 Scio Consulting International, LLC. All rights reserved.

3. Speakers
 Mike Dunham –
» Principal Consultant at Scio Consulting
» mdunham@sciodev.com
» http://www.sciodev.com
 Lincoln Murphy –
» Managing Director of Sixteen Ventures
» lincoln@sixteenventures.com
» http://www.sixteenventures.com
 Rick Chapman
» Managing Director of Softletter & SaaS University
» rickchapman@softletter.com
» http://www.softletter.com
3 Scio Consulting International, LLC. All rights reserved.

4. Q&A
 Your input and feedback makes this a
much better forum!
4 Scio Consulting International, LLC. All rights reserved.

5. What is Software as
a Service (SaaS)?
July 2009

6. What is Software-as-a-Service?
 Software as a Service (SaaS) is a model of software
delivery that allows applications to be provided as a
service to customers across the Internet.
 It is a Deployment/Delivery model
» Hosted and Managed by vendor
» Delivered across the Internet
 It is a Service Model
» End-User support and service moves to the vendor
 Usage-based pricing (vs. perpetual license model of on-
premise software)
» Per user per month
» Per transaction
» Per GB of storage per month
2 Scio Consulting International, LLC. All rights reserved.

7. SaaS Evolution
3 Scio Consulting International, LLC. All rights reserved.

8. Business View – Traditional Model
4 Scio Consulting International, LLC. All rights reserved.

9. Business View – SaaS Model
5 Scio Consulting International, LLC. All rights reserved.

10. SaaS vs ASP
 ASP: Application Service Provider
» Single-tenant architecture (one customer
per instance)
» Multiple instances running (as many as
there are clients), typically hosted by
third parties
 Disadvantages
» Significant management overhead
» Difficult maintenance
» No economies of scale
6 Scio Consulting International, LLC. All rights reserved.

11. Multi-Tenancy
 Naïve
» Single Database & Code Structure – Serving Multiple
Customers
 Split
» Single Application Database & Code Structure
• Unique DB per Tenant
• Unique Schema per Tenant
 Virtualized
» Hardware and Network Abstraction
 Rational
» Scalable Instances, Virtualized Infrastructure, Tuned
for Reliability Maturity
7 Scio Consulting International, LLC. All rights reserved.

12. Existing Product - Levels of “SaaSification”
“SaaSification” Levels
Characteristic Hosted (ASP Application Full SaaS
Model) Virtualization Approach
Approach
Tenancy Model Single Tenant Single Tenant Multi-tenant
with Tenant
Mgmt. Tools
Modification Minimal Minimal Moderate to
Required to Extensive
Existing App
Operations Highest Moderate Lowest
Overhead
Scalability of Lowest Low Highest
the Approach
Initial Lowest Moderate Highest
Investment
Sci 8

13. Key Technical Aspects of SaaS
 Multi-tenancy  Integration
 Scalability  Security
» Load balancing » Identity management
» Routing  Usability
 Availability  Communication
 Performance » e-mail, sms, etc.
 Configuration-driven  Globalization
Customization  Audit and compliance
» look and feel
 Backup and recovery
» Functionality
These factors influence App Architecture
as well as Infrastructure Architecture
Sci 9

14. SaaS Application Stack
10 Scio Consulting International, LLC. All rights reserved.

15. Multi-Tenancy in SaaS:
The Business Case
Presented July 16, 2009 via Webinar
Hosted by Scio (http://sciodev.com)

16. Introduction
Lincoln Murphy, Founder & Managing Director
Sixteen Ventures
15+ Years On- Started and Sold
Demand Product F1000-targeted
Development SaaS Company
I help SaaS
SaaS Business
Vendors make
Architect
more money!
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

17. What SaaS Is Not
Pricing Model Revenue Model
Anything on the
Software
Web, in the
Delivery Method
cloud, etc.
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

18. What SaaS Is
Business Intellectual
Architecture Property
Technology Business Model
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

19. What SaaS Is
Functionality Commercially
delivered via web focused
Inherently Single-Instance,
Social Multi-Tenant
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

20. Decision Time:
Are you a SaaS Vendor or not?
Hybrid is hard; Mindset and
pick one Focus
Revenue Make the
Recognition decision and
Issues stick with it
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

21. Remember!
The further you stray from this
clear definition of SaaS, the harder
it will be for you to truly reap the
benefits of being a pure-play SaaS
Vendor.
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

22. Multi-Tenancy
Considerations
Application Data Layer
Infrastructure
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

23. Multi-Tenancy
Infrastructure
Economies of Resource
Scale Efficiency
Implementation
Virtualization Agnostic
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

24. Multi-Tenancy
Application
Human
Ease of SDLC
Resource
Management
Efficiency
No Customized Business
Versions Scalability
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

25. Multi-Tenancy
Data Layer
Aggregate Data Track Usage
Advanced
Implementation
Monetization
Agnostic Strategies
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

26. Multi-Tenancy
Data Layer Implementation
Unique
Must be Single
Database per
Instance
Tenant
Multi-Tenant Multi-Tenant
Database, Database, Shared
unique Schema Schema
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

27. Remember!
The further you stray from this
clear definition of SaaS, the harder
it will be for you to truly reap the
benefits of being a pure-play SaaS
Vendor.
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

28. ASP Model
Multi-Instance, Non Web-native
Single-Tenant Applications
Customizations No Inbuilt
cause Business Revenue Models
Scalability Issues
Copyright© 2009 Lincoln Murphy / Sixteen Ventures. All Rights Reserved.

29. SaaS Business
Architecture
Consultants
lincoln@sixteenventures.com
http://sixteenventures.com
http://twitter.com/lincolnmurphy
http://linkedin.com/in/lincolnmurphy
lincolnmurphy (972) 200-9317

30. This Changes Everything
Rick Chapman
www.softletter.com
rickchapman@softletter.com

31.  At our SaaS University conference in Atlanta,
Patrick Fetterman, head of marketing of Plexus,
now Plex, said the following:
 “We are managing 100K feature requests per
year without product managers
 Not possible in his space (ERP) with a licensed
product

32. All numbers referenced are from The
2009 Softletter SaaS Report

33. Requirements Integrated
47% Yes
53% No

34. 76%
80%
70% 61%
60%
2006
50% 38% 2007
40% 2008
30%
20%
10%
0%

35. Major Upgrade
Less than once a year
7%
24%
18% Once a year
Twice a year
28% 23%
Three times a year
No set release schedule;
as developed

36. Agile?
33%
Yes
No
67%

37.  Release cycles are going away
 The pace of SaaS development exceeds anything
ever seen in the industry previous
The most successful SaaS companies will structure
their operations in ways previously talked about, but
never executed

38.  The TRUE Apotheosis of the Customer

41.  You are, of course, lying

42.  In a desktop and licensed world, it’s very difficult, if
not impossible
 The tools available simply don’t work very well
 Forums
 E-mail
 Screaming
 Surveys
 Screaming

43.  SaaS is 24/7/52
 SaaS is persistent across the world
 SaaS IS A COMMUNITY
 Inherent in the model

44.  They have transformed their community into an active
marketplace of ideas that manages, in the main, itself
 Requirements management driven by the community
 Implementation driven by community
 Innovation driven by community

45.  Voting
 Polls
 Forums
 Peer to peer communities
 Chat

46.  Combined with extensive data mining of their
customer base
 This combination has never been seen by the
industry before

47.  Product management is fundamentally transformed
 No MRDs
 No “tick list” management
 No acting as a stand in for the “Voice of the Customer”
 No acting as a stand in for the customer in the Agile model

48.  Product management is fundamentally transformed
 Your PM organization flattens out
 No “tick list” management
 No acting as a stand in for the “Voice of the Customer”
 No acting as a stand in for the customer in the Agile model
 No MRDs
 Requirements management goes back to development
 PMs aren’t good at use cases
 They’re not Rational mavens

49.  Product management is fundamentally transformed
 Your traditional PM role disappears
 The PPM becomes the PM
 Customer community advocate/maven
 User of the community management system and wizard of
insights and support
 Refiner of the system
 PMs (and everyone else becomes accountable)
 Business analysts may be needed

50.  Who do you think knows more about your system,
you or your users?

51.  I bet they do (collectively)
 You’re an expert at building your system
 Think you’re smarter?
 Test and measure (and be accountable)

52.  Mult-tennant
 BI
 Community system
 Voting
 Polls
 Councils
 Reputation management
 Maven management
 Peer to peer
 FAQ/Wiki/Blogs

53.  All tightly integrated directly into your system
 I mean “into”
 This approach becomes integral to your marketing,
sales, and development DNA
 Once implemented, traditional PM training programs
become obsolete