We're all too familiar with outages in Google's Gmail, Salesforce.com and the RIM BlackBerry network. Recent failures by Apple MobileMe, Jott and Cuil online-delivered software demonstrate that software-as-a-service -- or Software+Services, as Microsoft would call it -- isn't just a matter of putting your software up on the Internet, gathering users and declaring your Version 1.0 ready so you can start charging for services. The three recent examples of MobileMe, Jott and Cuil clearly demonstrate other major pitfalls in trying to deliver online software. Are all online software services destined to repeat these same mistakes, or will we learn from the mistakes of others? I certainly hope the latter.
How to fail at SaaS Rule 1: Forgetting the fundamental problem you solve
One of my own rules in product development is that all the bells and whistles don't amount to a hill of beans if the product doesn't solve the primary need it's intended to solve extremely well. A crappy word-processor with a great spell-checker won't stay on users' desktops for very long. A cool, feature-laden SmartPhone must first be a great phone, then provide handy applications and whiz-bang features.
Cuil clearly violated this principle by serving up search results in a new, fresher, media-rich format, but search results that were not only inaccurate but flat-out wrong. Users might be dazzled by the new user interface, the lack of advertising or the possibilities the product presents, but you're not going to use the service if the results are consistently wrong, and very wrong at that. In addition to building up a user base and associated revenues, Cuil now has the problem of overcoming a history of serving up inaccurate search results, a fundamental problem not likely present in its original business plan. Think that product-launch false start didn't cost Cuil a lot of money and potential market share? Think again.
Your product's not ready, SaaS or not, if it doesn't solve the core problem (and solve it well).
How to fail at SaaS Rule 2: "Big launch fever" or Overloading your 1.0 coming-out party
As vendors, we all want to make a big splash when launching a new product or SaaS service. Launching a new software version, new feature, new product add-on, and moving from beta to a 1.0 release -- the more, the better, right? Not necessarily, in the world of SaaS. More is better doesn't apply if the service won't survive the launch. Just ask Apple .MAC users who migrated to the MobileMe service only to suffer repeated downtime.
Apple really piled it on, suffering from "big launch fever" by launching the iPhone 3G and iPhone software update (causing a whole host of problems provisioning new phones and downloading the update via iTunes), launching the new MobileMe service and transitioning .MAC users to MobileMe, all in a short span of time. Did MobileMe really need to come out within a week of the iPhone 3G and iPhone software updates? Did .MAC users really need to be cut over immediately? Users suffered repeated outages and were sometimes down for days, while the MobileMe service has experienced repeated downtime, cutting people off from their business lifeline: e-mail.
Maybe we should learn from Apple's debacle (and Jott's, as we'll see in a moment) and not try to do everything all at once. Bottom line, what we really need is a SaaS/S+S Hippocratic Oath:
First, do no harm. The new product release shall do no harm to customers already using the online software and service.
How to fail at SaaS Rule 3: Extended betas do not a ready product make
We've all led ourselves to believe that one of the things you do to get your online SaaS service ready for prime time is to have a long, extended, free beta-test period. Google taught us that (expect its stuff rarely ever comes out of beta). During that time, we gradually build up a user community (sometimes even a quite large one), roll out new product features and software updates, resolve bugs commonly experienced in new software, work out the kinks delivering an online service, and help scale the systems to handle large and possibly unexpected user demand. It's all good, right?
Jott, an online voice-to-text to-do-list service and BlackBerry app that I've used for quite some time, was in beta for more than 2.5 years. Over that time they'd built up thousands and thousands of beta users. Come 1.0 launch day, what happened? Their service couldn't handle it, and they were down for nearly two business days. Like Apple, Jott suffered from "big launch fever" (see Rule 2) by trying to launch the 1.0 product version, a new Outlook plug-in, Express desktop software and premium paid-for services. As a Jott user, that's all great and I'm really happy for Jott that they have this really cool stuff coming out, except for the fact that I couldn't even get to the site for a day and a half to access all the tasks I've been tracking in Jott.
Jott's founder and CEO hit the nail on the head in his apology letter to "early adoptors," a euphemism for "you get our stuff for free so you don't have much right to complain" (which is wrong as well -- see Rule 4):
"While the outage could not have happened at a worse time for us, we're more upset at any effect it may have had on your customer experience."
So, just because you've had a long, extended beta doesn't mean you're ready to launch your product or overload the launch with "big launch fever."
How to fail at SaaS Rule 4: Users will put up with it -- it's free, after all
Like any euphemism, there's probably some truth (or at least there has been up until now) in the belief that users who get something for free will put up with a lot more than would someone paying to use an online service or software. If you were the only free service and the next alternative is a very cost-prohibitive option, that's one thing. But in a world of increasing SaaS alternatives -- and of course the option of returning to what you were doing before (when that exists) -- free doesn't hold users nearly as captive as it once did. The other added factor is that SaaS usually makes it easier for users to switch between services. Suffering from poor software or service quality? C'ya, don't want to be ya. If MySpace tanked today, they'd all be on Facebook by tonight.
But no matter how low the cost, how high the pain threshold to change, or even user loyalty to a brand (like Apple), users will only put up with so much and then they'll switch, oftentimes never to return. For two examples, see my Confessions of a former Apple zealot post and this one from a former Apple .MAC early adopter and MobileMe user casualty. Today, my primary e-mail client is Outlook, not an online service like Gmail or some other online service. Even given ALL the frustrations I have with Outlook, and believe me there are many, I can't and won't tolerate the downtime problems that Gmail and MobileMe users have experienced.
What product people and those in the decision-making chair forget is that user frustration isn't a blemish, it's a callus that builds from experience after experience. Each experience, no matter what the source of frustration, thickens that callus, desensitizing the users from why they like (or liked, rather) using your product. At some point, users can and will move on, applying the "life's too short" principle. Every day the fact that something is free diminishes as a compensating factor.
How to fail at SaaS Rule 5: It may be hosted software, but it's still a product
Just because your software is delivered as SaaS, S+S or on a subscription basis doesn't mean you're immune to all the fundamentals and best practices of delivering products to customers. Matter of fact, those principles can be even more important because it's so much easier to gain and lose customers. And unless you're delivering something truly unique from the user's perspective (not yours), users will just as easily move on to the next option, leaving you on the heap of "been there, done that" virtual shelfware.
Those who forget this, taking shortcuts in the belief that ALL the rules have changed (and many have, btw, but not all) when it comes delivering software online, are destined to learn the hard way, as users vote with their browsers and eyeballs to spend their time with someone else's product that works or solves their problem better.
Releated Links: Product Bistro - Lessons from creating products.
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- Podcast: Only You Can Save The Planet On August 27th
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Mitchell Ashley is principal consultant at Converging Network LLC where he provides product, technology and social media consulting to emerging technology companies. A successful CTO and product innovator, Mitchell has created many successful, award winning products in the networking, security, convergence, Internet and IT industries. In addition to blogging for NetworkWorld, Mitchell regularly blogs at TheConvergingNetwork and co-hosts the widely popular StillSecure After All These Years podcast.
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The opinions expressed in this Weblog are those of the writer and may not represent the opinions of Network World.
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Basic rules
A good reminder - now, it seems like a modern fashion to do all these mistakes? They are like, duh - what are you thinking or are you thinking.
#1, what problems are you trying to solve? It's a while I have seen any company asking a solution but more technology, preferably using this vendor or that? Horror stories last 40+ years, you would think that they learn?
#2, SaaS/S+S "Hippocratic Oath" - almost as old as I am. I'm amazed that users / customers tolerate it when you break this "oath". There were times when my customers would have dropped us like a rotten apple if we broke that but I digress, times change even there are more choices today - go figure? Also, see #1, a not working systems doesn't solve any problems, no matter how modern, enhanced, whatever it is. This is kind of vendor problem - not enough (capacity) planning, does anyone even remember what it means?
#3, this is like DUH - nothing to add!
#4, Free or not - users maybe (for a short (?) while) but corporations, no! Or at least should not - waste of time, money and resources for everyone.
#5, a product is a product if it's offered for use, small or big or local or remote or .. This is really geared for vendors - any company, small or big - doesn't matter, has failed over time when they forgot their target, users, and started thinking they are omnipotent, just seems a common trend today - again?
Services, be they 30 year old COBOL systems running billions of transactions every day or new, "modern" e-mail, web hosting, CRM, hosted security services for gov. institutions, payroll or billing and printing services, conferencing services, blogs and forums, etc have no different requirements than your electrical or water - either it works reliably and has enough capacity for you or it doesn't. I think IT on both side of fence sometimes forget it. Technology is just technology and easy (kind of but you have to learn new every day anyway) - this is almost like back to days when well dressed IBM rep. was able to sell anything to management. A nice presentation doesn't make any service (or product) to work any better.
Are all online software services destined...
Your lead asked the question: "Are all online software services destined to repeat these same five mistakes?"
The short (and long) answer is an emphatic "Yes! - Over and over, but not just these five but in ways that cannot yet even be imagined".
Anyone who entrusts their critical "can't lose/can't be compromised" data to the web should have their head examined. SAAS providers will come and go, systems will crash and be hacked. Your data will be loaded on to some fool's laptop (for God knows what reason) and left at the airport or in cab. I could go on, but what's the point?
I almost would agree
Agreed, they seem to be repeating the mistakes. And yes, there will be even more.
Now - SaaS is NOT new! Let me clarify - the services have been around a long time, SaaS is just a new marketing term. Even back in 70's the same site which was our backup site handled "software as service" for several banks, other financial and marketing institutions, etc - it was just a question of economics, they were able to have more computer and network resources. Security was very tight and good, very good people - I should know being a (very security conscious and demanding) customer and supporting them later.
SaaS is no different than any locally run system in that sense - you have to manage it, know what it is doing, what are the limitations and benefits, etc. The benefit is that you don't have to have all the technical, human or computing, resources yourself. Almost like what is IT for the rest of the business - it is services, it serves your business and no matter how important IT think it is, it's still a service.
Time Sharing
You're right, of course. I came into IT near the end of what was then called "Time Sharing" - multiuser systems accessed remotely via 1200 Baud dialup or dedicated lines (3002 data line?).
Time sharing disappeared with the breakup of AT&T and the commercial release of UNIX on affordable "Micro towers" - (e.g. NCR Towers. Motorola 68000 series CPU's, Winchester drives and 1/2 a meg of memory - we thought we died and went to heaven, I was used to being able to use on a max of 12K per program, tho we could "chain" from one program to another, and pass a few variables from one to the next).
We converted most of our clients to in-house systems and rewrote our software in 'C'. I still support a few of those clients today.
The main difference was/is that we didn't have the 'net and all that entails (good and bad) to deal with.
SaaS isn't a faster, cheaper business model
I'm finding all to often the " uninitiated" view SaaS as a faster and cheaper way to get products to market: get them out sooner into customers hands, let customers debug your products, use "free" as an out for addressing product needs or deficiencies, etc. I'm not speaking about any one company or product, but as a collective this trend is very apparent.
The opposite is actually true. Now instead of building a scalable solution that can handle the needs of your largest target customer, you must engineer for the total customer base size, now and in the future. Also, just because it's free doesn't mean customers will tolerate bad or poorly run software.
I believe the current examples show us that we'll need to change how product features, upgrades, add-ons, conversions, etc, are rolled out. The core service offering (aka the patient) must survive the event (aka the surgery).
The analogs (pun intended) to time sharing and other shared systems of the past are also very relevant.
Mitchell Ashley
Converging Network, LLC
Personal blog: http://theconvergingnetwork.com
Personal podcast: http://www.clickcaster.com/ss
Business mode and time share.. and free?
First, sorry about the kind of long comment but maybe I'm just in bad/good mood today.
You are definitely correct and, as Feign also already said, time share was one format of SaaS, actually not very far from today, you could either use a ready made or build your own system and host it somewhere.
I know, we are talking about technology but it doesn't exist in vacuum. Nothing is "free", someone ends up paying for it. Be it charged by you, on you, whatever but somewhere the cost pops up. It just has to be worked to the business model as well as risks, profits, etc.
We all pay Google one way or other, they are a little like wholesale, charge the goods provider (advertiser) with a "small" profit of the use of their software and the goods providers charge it in their pricing. Or the post office (billing / stamp automation, even dedicated terminals), FedEx or whatever billing systems in which the end-users can (for free?) query the delivery, or maybe use a service to save, format, deliver your documents, send the pictures to Costco for printing, use ATM or Visa - free (or is it?) or really running in the companies own systems - guess again, you might be amazed. Clearing houses, Reuter terminals anyone - a new term, since when? All those are software today (a long time), so? Just an example, consolidated ATM networks were common even before Internet time, you just used SaaS! Not even talking about some global satellite services - just sign in and use it, hot in manufacturing in 80's.
Yes, SaaS and to the extent S+S service providers have to figure the whole picture out otherwise it will not fly. As you say, "operation was successful but the patient died". Technically, honestly, I don't see any other problems except the companies (Apple, etc) didn't do their homework - almost as Compuserve (and maybe AOL) lost their dominance but they kept repeating the mistakes, I hope Apple doesn't.
S+S is interesting because it is more like renting from your tool shop rather than making a contract for a tool or service over the time of a project, a little different model. Maybe more flexible than SaaS but also can be more expensive and you don't always know what you get today - SaaS model seems to have (and should) more guarantees over the life of the project.
I'm not really amazed - technical "know how" lately has gone down (a lot) to how to configure something or how to run canned reports (take a peek on job market, architects to code C# or Java, analysts to configure Cisco routers, developers to write AJAX or Perl scripts to a specification, what spec?, capacity planner(?) to run reports and graphics to people who have no idea what they mean, etc) - but I'm a little amazed of the business community (we are talking about business, not code?), they should know better? Managing risks, benefits, etc is really not depend of what the product is, MS or IBM or HP or maybe free as Linux, it is how reliable it is, how well it fulfills the business needs, how stable it is in perspective of laws, changing technology, security, support, blah, blah - an endless and ever changing list.
So, we all are saying the same thing, a customer, be it a single end-user or a corporation, can not tolerate bad "service" a long time. And a "bad" service is not a good business model, there are limits on human tolerance.
If software sucks...
I'm a guitar player and we've all probably seen the "No Stairway To Heaven" sign in the guitar store scene from the Wayne's World movie. The funniest sign in a guitar store I've seen said "If You Suck, Don't Play".
Users feel the same about software, and specific to this dialogue, the service delivery of SaaS. lol :)
Mitchell Ashley
Converging Network, LLC
Personal blog: http://theconvergingnetwork.com
Personal podcast: http://www.clickcaster.com/ss
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