The de facto standard for pricing software and hardware on the modern web is “as a service.” For example, software as a service (SaaS) companies like Dropbox, Slack, Oracle, and Salesforce all license their platforms on a subscription basis, while hosting the servers, databases, and code themselves. New “as a service” acronyms are popping up every day, fueled by our innate human desire to categorize things and companies’ love of a good acronym. Let’s canter through some history, discuss the present, and hopefully, preordain some future evolutions from this model.
The vast majority of web 2.0 technologies are sold on a software as a service pricing (SaaS) model. The idea of selling a monolithic, versioned application works in very few cases in the modern web. It prevents rapid innovation and often can render applications obsolete long before the next version is ready for market.
Without monthly billing, the business must also tolerate increased risk. While they may receive a massive tidal wave of money when the newest version of their product is released, between versions — when they have to pay engineers to support existing code or build the next great version — they have comparatively little income. This can constrain future versions to be the minimum viable product, lacking many features to differentiate them from the current version or competitor’s products. This has fueled the push into SaaS by almost every software company, even causing Microsoft to hybridize their licensing model.
With this model comes its own unique set of challenges, like high availability systems and more expensive ongoing architecture costs borne by the software provider. These considerations have led directly to the creation of IaaS (infrastructure as a service). This lesser-known AAS has directly driven the growth of SaaS and traditional application developers for some time. Infrastructure as a service was pioneered by Rackspace and others in the early 2000s to reduce overall cost of launching and supporting networked applications.
Infrastructure as a service allows businesses to vastly reduce their ongoing infrastructure cost by providing on-demand systems in a secure, highly managed environment. Some of the omnipresent players in this space are Amazon, Microsoft, Google, IBM, and HP. It really came into its own with SaaS supporting it; however, too frequently IaaS requires a full team of infrastructure engineers to manage and support the virtual data center. This cost fueled the next expansion of the AAS lexicon: PaaS.
Platform as a service (PaaS) provides many of the tools required to launch an application packaged into a single, cohesive offering. Amazon Web Services (AWS) is becoming the canonical example of a comprehensive PaaS offering; it provides everything from virtual server instances, to multiple data storage structures, to machine learning services, to call center services. Other services provide a less generalized offering that specifically targets app development or web app development.
With all of these amazing AAS acronyms running around the modern enterprise, how do you get your PaaS to work with your existing IaaS and the 20+ SaaS products that you’re likely making use of? Well, you use an iPaaS to help knit them all together. The integration platform as a service (iPAAS) solves the ongoing problem of tying together these underlying systems. It makes these connections reliable, easily supported, and — most crucially — significantly less expensive from a capital and operational cost perspective.
This brings us to the current day, with enterprises ever looking for lower-cost and lower-maintenance ways to receive mission critical support services. Where do I think we go from here? I believe that the iPaaS’s will become the game-changing sales channel that SaaS providers have always dreamed of. We will begin to see iPaaS offerings channel selling a prepackaged, industry-specific support stack. These will become the new “services” that businesses will buy; they will have a low client churn and allow for underlying AAS services to be swapped out with limited impact to the client. It’s going to be a brave new world allowing companies to focus on their service and sell primarily through business development relationships, keeping sales overhead low.
At TUNE, we’re still working on our place in this market, and the future market. Currently we exist as two pure SaaS products, but as we work to be more wall-less, we open up a world of possibility. Do we move so far as to become a PaaS, enabling our clients to build everything they need within a simplified sandbox? Do we knit together a packaged iPaaS offering? How much benefit would the industry see from a packaged play that solves all of their business needs? How do our products evolve to meet this potential future?
These are the questions that drive us to keep building the best AAS we can possibly imagine.
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As the Director of Innovation at TUNE, Alex plays a variety of roles: team manager, product manager, and future-thinking agitator. He spends most of his time learning and turning his learnings into confluence documents. He is a recovering entrepreneur, and occasional Canadian. Alex holds a Computer Science degree from the University of British Columbia.