Reading Time: 2 minutes

Whether transitioning from a traditional license model or building a pure SaaS application, software providers generally encounter three enablement challenges:

Architecture Enablement: Software development is significantly different for SaaS compared to traditional models. On-premise products that run on dedicated servers may not scale well when run with dozens or hundreds of other tenants simultaneously. Latency issues can cause poor performance if proper optimization is not done.

Operational Enablement: Faced with the relentless challenges of developing and marketing core offerings, many software providers question whether it makes sense to build and operate their own cloud platform. The problem with outsourcing though is that most hosting arrangements include only the bare-bones cloud infrastructure. These cloud suppliers take no responsibility for designing the cloud version of the application, for implementing it, or for managing it on an ongoing basis. To justify a partnership, the cloud provider should really bring major operational strengths to the table—ITIL V3 best practices, SaaS design and build services, and enterprise-grade 24/7 monitoring and management.

Business Enablement: Successful (i.e., profitable) SaaS relies on the right partner model. The software provider must be able to resell services purchased from the partner at a discounted rate, which can then be marked up to capture adequate margin. Many software providers implementing SaaS for the first time make the mistake of paying retail prices for cloud hosting, or “retail-like” discounts. This has the adverse effect of either making their SaaS offerings noncompetitive in the marketplace or squeezing margins so severely that their business is no longer viable.

Achieving architecture, operational and business excellence requires a host of battle-tested processes, deep staffing and rigorous organizational discipline, all of which can take years or even decades to attain. But a specialized SaaS platform provider with expertise in helping software providers embrace SaaS can help mitigate the risks associated with all three enablement challenges.

To find out how Logicalis can help your organization better leverage the SaaS model to increase revenues, improve margins and enhance customer experiences, visit