Software as a Service and Intelligent Reaction

By Steve Murch, Chairman


Software as a Service (SaaS, pronounced "sass") is one of the most important trends in software at present.  As just one indicator, earlier this month, Gartner released a report that estimated 90% of all e-commerce sites will use SaaS to power them in just 5 years. 

What is SaaS?

SaaS is a way of getting software to you. 

As most of you know, rather than distributing CD-ROMs or download-and-install-it-yourself software, we host EscapiaONE software, and you access it via a web browser.  This web-based delivery method is very different from the CD-ROM or downloadable-EXE delivery method. 

Here are some obvious benefits of the SaaS model:

• You don't need an Information Technology team to set up and install the software.  Just set up a PC with access to the Web, and you're set.
• You can connect to your business from anywhere day or night, whether you're on the road at a conference, in a different off-season location, even out of the country.
• Employees can work from home, or remotely, just like JetBlue's Reservation Agents, where 80% of their reservation agents work from home. 
• SaaS makes it much easier to scale your company during seasonal peaks and valleys.
• Ongoing updates are applied for you -- You don't have to apply patches or install drivers on every machine that runs the software.  When we release a new feature, you log in the next morning, and it just works.
• Since the travel ecosystem and larger business and consumer ecosystems are all going web-based, it makes it much, much easier to integrate new web services and delivery channels that enhance your business
• Your data is more secure.  It's hosted in a multi-million dollar datacenter that is designed to withstand an earthquake that measures 8.0 on the richter scale.  It's got 7 different redundant carriers.  Data is physically backed up for you in a secure offsite location on a regular basis.  Biometric devices guard entry.  And more.

The Most Subtle but Powerful Benefit of SaaS:  Intelligent Reaction

The benefits of having a web-hosted application highlighted above are frequently discussed, and further detailed on Escapia.com.  It was primarily for these reasons that we chose the SaaS delivery method eight years ago, launched the first web-based vacation rental reservation system, and remain the web-based software leader in the field.

But I wanted to highlight what I think is the most powerful benefit of SaaS.  To me, the most powerful benefit of SaaS is the dramatic improvement it makes in the method, responsiveness and speed with which we can measure, design and improve our software on an ongoing basis.

Let's step back a moment.  During the 80's and much of the 90's, the general model for creating and delivering software was:

1. Hire as smart a team as you can
2. Put them in an ivory tower, or nice office buildings protected from the outside world (and customers) by lakes and trees
3. Develop requirements or a "five-year" plan
4. Create the features in code and pixels
5. Test it (iterate on the above steps as necessary)
6. Ship it
7. Hope that you got it right
8. Check in with customers when you can
9. Use what little feedback you can gather to work on the next major version

In this legacy method of software delivery, there is a significant disconnect between the people creating the software and those actually using it on a daily basis.  Reports might eventually come in from customers that can be used in "version 2", but these usage environments, scenarios and problems are notoriously hard to replicate. 

With SaaS, if problems arise, we use the exact same environment as you to investigate it, and our engineers also have direct access to all kinds of monitoring tools.  There is no need to spend time replicating the usage environment; our engineers can just log in, and see what you see.

Equally important, the same holds true in new feature planning as well.  We can examine the logs and find out if a particular feature is successfully being used.  For instance, we can log in and see if someone is trying to shoehorn certain data into a notes field, and make a quick determination if there's a more elegant way to do that in the future.

The new model is:

1. Hire intelligent people with domain expertise.
2. Listen to and learn from customers. 
3. Run like mad.  Engineer well-tested solutions. 
4. Then watch how they are being used or not used.  Look for areas of improvement.
5. Release improvements rapidly.
6. Iterate, iterate, iterate.

My good friend Adam Bosworth, former leader of the Microsoft Access team at Microsoft, key innovator on extensible markup language (XML) and other key Web technologies, and until very recently VP of Products at Google, has coined this the migration from the "Intelligent Design" model of software project management to "Intelligent Reaction".  (Watch his presentation on this to Salesforce.com back in 2005 for more of his perspective.) 

To make his point even more memorable, he compares the old "ivory tower" software design and delivery model to something akin to state socialism; one in which planners are largely insulated from the actual users, and which edicts are handed down from on-high.  In the SaaS model, engineers and customers work at the same level, iterate on solutions and do so rapidly.  The chasm between engineering teams and customers is gone in the SaaS delivery model.  The wall no longer exists.

Regardless of the metaphor, one thing is true -- the SaaS model helps connect our developers and quality assurance engineers directly with you, and how it is being used, much more quickly than a "we ship, you deploy" delivery method.

Comments

[Dylan Peterson (Sales Operations, Escapia)]

That's well put. I think it is interesting how "the gap" between a user and a provider in a variety of applications and industries is getting smaller:

- Online booking technology allows customers to book directly with providers.

- User-generated content gives readers control to make improvements (e.g. Wikipedia)

- Open-source code (e.g. php) gives developers control to improve tools

The success of the SaaS model must be partially owed to this same natural trend.