In 2019, it is hard to imagine a global marketplace without the software-as-a-service (SaaS) delivery model. SaaS companies generated $80 billion in revenue in 2018, according to Gartner, and forecasts predict an 18.5 percent increase in 2019, pushing that total to nearly $95 billion.
From start-ups to enterprises, the telecom industry is locked into a massive digital transformation as the majority of on-premises resources move into the cloud. And the advantages of the subscription-based SaaS model are clear: increased financial certainty, improved speed to outcomes, vertical scalability and decreased operational and infrastructure costs, to name a few.
But it wasn’t always cloud this, cloud that. It would take several key technical and strategic breakthroughs for major enterprises to move past their mistrust of the cloud.
With nearly 20 years of frontline experience as an SaaS company providing information management and project deployment solutions for the telecom industry, OneVizion has had a front-row seat for the evolution of SaaS.
The following information details our experiences and lessons learned as they relate to major milestones in the development of SaaS, from its painful birth to the watershed moments that sparked innovation and progress. Then, we move on to the future of SaaS.
Remembering the Bad Ol’ Days
Just before the turn of the century, the burgeoning SaaS model faced two major problems: a lack of trust from established enterprises and technology that trailed behind the rate of innovation.
For executives considering this unproven model, the thought of handing over the keys to their data, security and IP to be managed in the cloud — outside of IT’s protective firewalls — was considered preposterous and taboo. And in the early days, we were told so in more than one boardroom meeting, with IT departments leading the pushback.
Ever so slowly, attitudes began to change as some enterprises began to experiment with application service providers (ASPs), an important precursor to the SaaS model.
These ASPs were typically used for targeted, non-mission-critical tasks on the periphery of a business. But change has to start somewhere. In many ways, the limited use cases for the ASP model helped open the door for more widespread SaaS acceptance.
Customers were more inclined to give ASPs a shot because they still owned and managed their specific database without bringing any other data into the mix.
But this single-tenant, hosted architecture meant that scalability was limited without incurring massive expenses, similar to the limitations of on-premises solutions.
So, although ASPs did much to help remove the stigma on cloud-based service delivery, they didn’t do enough to answer the technical needs of an industry experiencing massive levels of innovation. As the wireless industry exploded, storage space and processing power were at a premium. Emerging applications required more space than ever before, and all of those new cell sites came with terabytes of documentation and photos that needed to be meticulously tracked.
Imagine this: You’re a telecom services provider in the early 2000s, and word comes down from your carrier that you need to add a new task to an application used at 30,000 sites associated with your national build. To do this means opening up several thousand spreadsheets to add two new columns (forecast and actual) to represent the task. The entire rebaselining process could take several weeks (if things were to go smoothly).
In the interest of staying on the safe, tried-but-true path, enterprises accepted the status quo — and the lengthy timelines and financial uncertainty that came with it. It would take some bold thought leadership and some revolutionary technology to ultimately break the mold.
SaaS Hits Its Stride
Attitudes began to shift in the early 2000s with the emergence of cloud-based applications, most notably customer relationship management (CRM) applications. These companies made use of a solid, prescriptive business model, one that was repeatable and that used a shared infrastructure while keeping customers’ data separated (the now-embraced multitenant model).
With a focus on CRM and sales management functions, they managed to survive many of the IT objections by simply being positioned so far in front of that team and their concerns. Their subscription model provided well-understood and acceptable price points, and this perfect storm of factors sparked massive growth.
As these and other applications, such as travel and expense management tools, softened perceptions against the cloud, our country saw an unprecedented surge in mobile capabilities, broadband access, internet security, advanced browsers, robust application programming interfaces (APIs) and other technology breakthroughs that also helped changed the industry’s mindset and drove record sales in the SaaS segment.
At OneVizion, we already had the utmost confidence in the SaaS delivery model from a business and strategy perspective. But projects still needed time to architect the database, computing components and storage components. The missing factors were speed and scalability.
This changed with the maturity of Amazon Web Services (AWS) in 2012 and the development of cloud databases robust enough to run large enterprise applications supporting functions like national program management. This watershed moment allowed us to host our application through Amazon’s technology infrastructure and take full advantage of their processing, storage and security capabilities.
The result? Exponential reductions in the time needed to spin up new instances from days to minutes and the money needed to store terabytes of data created by wireless and broadband deployment projects across the country. Monthly costs per terabyte fell dramatically, as did costs for web and application servers, database servers and similar services.
That same re-baselining issue we described earlier? Now customers can easily scale up database capacity in minutes for as long as necessary before scaling back down — no more costly physical server orders for a temporary need. No more opening thousands of spreadsheets to implement new columns. Just add the task and the application adds the rest.
AWS gave us scalability, flexibility, security and redundancy. Ever had a server crash knock out critical operations for hours, if not days? On the slim chance that a hosting region in AWS goes down, taking one of our client’s instances with it, then we’re back up in 15 minutes in another region.
AWS truly changed the way we do business and how we interact with customers. We can easily stand up a customer in one-tenth of the time it took 10 years ago, providing them with affordable data storage and collaborative, consistent workflows that cut operational and technical costs dramatically.
Looking Toward the Future of SaaS
Despite the great and ongoing leap in the technology supporting the SaaS model, there are still problems and risks associated with it in the here and now.
For companies like OneVizion that are positioned as comprehensive information centers that link together your mission-critical business units, the need for rapid and easy integrations is paramount. Many enterprises now make use of multiple SaaS providers; thus, communications and connections among these providers on behalf of the enterprise must be straightforward and simple.
Ultimately, the biggest problem facing our industry in 2019 is not just a question of technology, but the synthesis of that technology with the expertise and strategic thinking needed to point that tech in the right direction. What good does a powerful tool like AWS do if you are unable to parse through its hundreds of tools and services? With our guidance, clients receive the full benefits of the cloud infrastructure at a fraction of the cost.
We are positioned to handle problems that do not exist today. This is represented by our SaaS model, which is built around one important question “What does done look like?”
For many, hearing “you never know what done looks like” is a hard pill to swallow. We view done as an acceptance of the fact that you don’t know how big, fast and complex things are going to get. It is impossible to know all the parameters until the work begins, so we designed a system that allows you to expand your information architecture to capture emerging parameters and industry shifts.
Everyone can solve the simple problems now. But the complex ones usually devolve into a mess of meetings, emotion and scattered spreadsheets.
OneVizion is helping by not just bringing all of your stranded data into a single, mission-critical information hub — it’s also taking an enterprise’s data and correlating it with other SaaS providers, databases of record, financials, procurement, materials and other critical data sources.
So, as you examine how SaaS can help your organization thrive in the age of digital transformation, it is important to understand two things about a potential vendor: How will their tech stack improve your quality of life, and how deep is the expertise behind it?
Gary D. Williamson is vice president of telecommunications innovation at OneVizion. Visit www.onevizion.com.