Money Matters

The potential for more innovation through SaaS

This is the 3rd in our 5-part series on the benefits of Software as a Service (SaaS). Our initial post offered some definitions of cloud and SaaS. Our last post explored the value of SaaS in terms of cost savings. In this post we turn our attention to a different kind of value: innovation.

By way of review: All software as a service (SaaS) is cloud, but not all cloud is SaaS. While there are a lot of benefits in moving to the cloud, SaaS has the potential of delivering much more. More innovation is among the added benefits that are possible, and yet it is often overlooked and undervalued. Why? Because it is not guaranteed. While the potential exists, not all SaaS solution providers are equal in terms of delivering more innovation and making that innovation easier to consume. A lot depends on the approach taken – not only the approach to delivering SaaS, but also the approach to developing and delivering innovation. Don’t settle for just any SaaS solution. Look for one that delivers more… way more than just the benefits of cloud.

SaaS solution providers can potentially deliver more innovation through more frequent and robust upgrades, particularly those maintaining a single line of code through multi-tenant solutions. But investigate this thoroughly because just because they can doesn’t mean they do and some who offer single-tenant or hybrid solutions can match the faster pace.

Non-technical users of business software often don’t know, care or need to know which of today’s available deployment options are actually being used to deliver the application. But deployment method, and in particular the different “flavors” of SaaS, matter when it comes to delivering innovation. And therefore, it is important to understand the difference between single tenant and multi-tenant.

  • Multi-tenant SaaS: Multiple companies use the same instance of hosted software; configuration settings, company and role-based access personalize business processes and protect data security.
  • Single-tenant (or Multi-instance) SaaS: Each company is given its own instance of the (hosted) software, but may share common services, such as an integration platform, and security.

We asked our 2019 survey respondents if they cared about multi-tenancy (Figure 1). While only 13% admitted to not knowing the difference between multi-tenant and single tenant, we suspect that at least some of the 23% that said No (we don’t care) might not have a full understanding. Because if they did, they would care. They would either prefer one over the other or would appreciate having a choice.

This Chart Shows single tenant and multi tenant percentage

Figure 1: Do you care if SaaS is multi-tenant? Source: Mint Jutras 2019 Enterprise Solution Study

Solution providers that deliver on-premise solutions are often forced to maintain multiple versions of the software. Very often the software is offered on a choice of platforms and databases, and the vendor must support multiple release levels determined by their customers’ ability to keep pace with upgrades. For every person-day they spend on innovation, they spend another multiple of that day making sure it works across multiple environments. Those vendors that offer the same solution both as SaaS and on-premise must accommodate these choices and are also gated by their on-premise customers’ ability to accept change. Those offering a SaaS solution exclusively can devote their entire development budget to innovation.

Multi-tenant solutions tend to offer more innovation than single-tenant solutions. And solution providers that offer only a SaaS solution are typically able to deliver more innovation than those that offer the same solution on-premise and SaaS. Those who offer their solutions exclusively as a multi-tenant SaaS solution typically have a distinct advantage of only having to maintain a single line of code.

There is a school of thought that believes whether the solution is delivered multi-tenant or multi-instance matters far more to the vendor than to the end user. It is the solution provider that benefits most directly from offering a multi-tenant solution because this allows them to scale delivery with less cost. Obviously delivering bug fixes and product innovation to a single instance of software, supporting many different customers, is far easier and more efficient for the vendor. However, this can (and should) translate into serious benefits for the user as well.

Both flavors of SaaS have the potential of making more innovation available for general consumption. One reason: Upgrades just get done! Let’s face it; upgrades can be costly in terms of time and effort. And they can be disruptive to your business. There are good kinds of disruption and bad kinds. The good kind of disruption is when something new – a new process or a new technology – forces you to do something in a better way. The bad kind of disruption is the kind that gets in the way of doing business. Unfortunately upgrades of traditional on-premise software tend to produce the bad kind of disruption, which means they are often delayed or even put off indefinitely.

That is not allowed to happen in a SaaS environment. While some still running on-premise solutions might baulk at this, wanting to retain control, there really is no downside to it. You are relieved of much, if not all of the burden involved in an upgrade, and disruption is minimized or even eliminated entirely. The SaaS solution provider does the heavy lifting. You just have to figure out when, if and how you will take advantage of the new innovations, providing of course they are “done right,” i.e. in a way that is easily and optionally consumed.

Don’t Settle – Demand More

As long as your company is living, breathing and growing, your ERP implementation needs to continue to evolve. It too must live, breath and expand. Yet all too often companies resort to the old way of managing an implementation. After a long and painful process of implementation, those involved were anxious to get back to their day jobs. Sure you got some initial benefits, but continuous improvement stalled. Even worse, often the ERP implementation became a convenient excuse for not evolving. But do you really want your ERP solution to be the reason why you can’t take advantage of that new opportunity? Do you want it to be the reason you can’t reinvent your business model to adapt to our changing times?

And times are definitely changing. The vast majority (90%) of the participants in our 2018 Enterprise Solution Study felt they were at some level of risk in their business being disrupted, either through new innovative products, new ways of selling, pricing or packaging existing products, entirely new business models, or some combination of all of the above. This makes innovation critical to growth and profits.

Cloud-based solutions make it easier for software vendors to deliver innovation. Cloud brings some benefits, but SaaS brings far more, relieving you of the burden of the upgrades and removing any excuse for not moving forward. But while more and more vendors are offering SaaS solutions, they don’t all offer the same speed and quality of innovation. The faster they innovate, the easier the innovation is to consume, the speedier business innovation will be. Don’t settle for anything less.

In our next installment in this series we will dive deep into SaaS as an enabler of growth.