Monthly Archives: May 2011 and SaaS Hardware Efficiency

According to Marc Benioff, CEO (in an interview on CNBC), the Salesforce’s cloud consists of 2,500 servers, serving 100,000 customers. A quick math reveals that this is an average of 0.025 servers per customer, or one server for every 40 customers.

Marc Benioff argues that in a traditional on-premises software model, customers would need one server per customer, or 100,000 servers overall. While Marc Benioff knowingly “oversimplifies” the truth (did anyone say virtualization?), the math is not totally off.

Indeed, it’s not unlikely that a “server” is not the same as a (perhaps some ancient Windows) server at an SMB site. And, on-premises software customers also share servers across applications (even before virtualization became so ubiquitous). Yet, there’s something compelling about the figures, and there there’s certainly something to be said about the cost efficiencies of SaaS, even if, as in this case, from a hardware allocation perspective alone.

SaaS, PaaS and IaaS

Here is a nice article summarizing the large players’ approach to infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS).

Nothing earthshaking about this short summary, but it does provide a nice up-to-date summary of the current state-of-affairs when it comes to to cloud infrastructure.

Announcing New Product Features

In a SaaS world, new product features are added frequently and are being pushed to all customers at once. Customers no longer decide when to upgrade. In fact, customers are typically not even aware that a product feature was introduced.

At the same time, it is important for the SaaS vendor to let customers know that a new product feature is available. Hopefully, this new product feature increases the business value of the product. But in most cases customers have to start using the new product feature before the business value is realized.

Nowadays most SaaS products include some notification mechanism letting customers know about new functionality. Here are a few examples I found as to how that’s being done.

Let’s start with some Google examples:

Google Adwords includes a red link titled Announcements at the top of the page. The link opnes up a pull-down menu that show all announcements.

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SaaS Product Planning and System-Related Product Enhancements

Earlier this week I reviewed the short-term product plan with the development team as part of my day-to-day product management role.

One product enhancement on the list was a bit unusual. This enhancement was nothing but installing a standard OS component on our production machines. Why would such a change—operational, operating system related—even appear on the product plan, as tactical as this plan may have been?

It turns out that when we originally added this change request, engineering recommended running a short regression QA cycle to ensure the change would not have an adverse effect. Hence, we figured it should be prioritized vis-à-vis other product enhancement. As such, this change was also bundled into a product release.

While this anecdote may be an exception rather than the norm, we did consciously decide a while back to incorporate product enhancements that are traditionally classified as “system”, “IT” or “operations” into the product plan. This wasn’t obvious, because product plans for on-premises software (where we all grew up) don’t normally deal with these types of product enhancements.

Here’s why this is works well, and why this is part of SaaS product planning:

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Selling SaaS over the Web

Ariel Finkelstein, Kampyle CEO and Sharon Magen, VP of Sales and Business Development at ClickTale spoke today at the 10 Laws of Building a SaaS Company in Israel, Part II: Selling SaaS Online meeting.

Kampyle has seen online sales bounded at a price point of around $350/month. Beyond this point, they’ve seen customers requesting sales assistance, and the sales cycle completing over the phone using Inside Sales.