Storage Infrastructure Strategies for Successful SaaS Businesses

Featured article by Josh Epstein, V.P. of Global Marketing at Kaminario

The cloud’s momentum just keeps building, as seen by Amazon’s recent quarterly financial performance, aided by its fast growing Amazon Web Services business – which offers public cloud infrastructure. The company also announced that April was its most profitable quarter since the company started 22 years ago. With all this in mind, offering public cloud infrastructure has become a big business. Not only has it boosted Amazon, but also Microsoft with its Azure business.

Why the growth? Public cloud infrastructure providers are gaining ground because enterprises wanting cloud-based systems can tap their infrastructure instead of building one out. The same can be said for enterprises turning to software-as-a-service (SaaS) offerings as an alternative to traditional, on-premise enterprise software solutions.

According to analyst firm IDC, total spending on cloud IT infrastructure grew by more than 24 percent last year, and is set to grow at a 15 percent compound annual growth rate through 2019. Additionally, IDC figures spending on SaaS and other components of the cloud software market are growing 10 times faster than the non-cloud software delivery market.

Why SaaS?

The reason for this shift is pretty simple. SaaS is a more efficient way to deliver powerful functionality and positive user experiences to business users, as well as radically simplifies deployment. Users of SaaS solutions don’t have to install and maintain servers, databases, or scale data center infrastructure to add more storage or compute power. SaaS vendors handle all that for them. The SaaS model collapses the entire application delivery infrastructure into the software being delivered, which is why SaaS is so appealing to CIOs and line-of-business executives.

Some SaaS providers turn to public cloud vendors, though others may choose to build their own cloud infrastructure to optimize application delivery infrastructure as part of their core competence. Furthermore, providers want to optimize this to ensure seamlessly delivery when it comes to issues around customer experience, real-time analytics or privacy safeguards. For SaaS vendors, solid, flexible infrastructure can be a competitive advantage in delivering mixed workloads.

Key Business Drivers

How do SaaS vendors’ infrastructure strategies differ from enterprise IT, and how do their choices impact the effectiveness of the service – the application “experience” they offer to end users?

As a result, vendors should consider these four SaaS business drivers when it comes to impacting application infrastructure decisions:

1. Customer retention is as important as a new customer acquisition – Because SaaS users aren’t invested in infrastructure and perpetual license outlays, the “switching cost” is low. As a result, SaaS vendors must provide consistently high customer experience in every area, including great uptime, superior application performance and general account management.

2. SaaS vendors most grow to succeed – Vendors’ business models are based on low barriers to start (e.g. free trials) and network effects that deliver more value as user base grows. This means that SaaS companies need infrastructure that scales easily as they add customers, users, devices and data growth.

3. Deliver real time analytics and decision support – SaaS solutions today are doing far more than just transactions—they need to manage real-time analytics. The era when online analytic processing (OLAP) was a batch function performed by specialists with niche data warehouse tools is now giving way to SaaS solutions that embed personalization, intelligence and other analytics as part of the user experience. This requires infrastructure that can deliver consistently high performance and user experience under dynamic workload environments.

4. Ability to scale – The cost of application delivery infrastructure is effectively the cost of goods sold (COGS) for a SaaS company. As a result, the ability to scale infrastructure in a cost efficient way is vital to profitability.

These four key business drivers map back to capabilities needed from cloud infrastructure. Scalability is table stakes – any SaaS vendor that chooses to build out its own infrastructure must ensure it can quickly scale its application and performance needs, even as its application workload profile evolves to include more rapid analytics and personalization.

The infrastructure stack for any vendor building its own cloud has multiple layers – from virtualization to security and disaster recovery capabilities – but at the end of the day, its foundation is storage. As a result, SaaS providers must consider these infrastructure requirements when it comes to choosing a storage technology approach.

Benefits of All Flash Storage

All flash storage is the natural technology selection for powering the high performance needs of the modern SaaS business. However, beyond choosing all flash, SaaS providers need agile storage solutions that can seamlessly manage growth in data and users with a cost model that supports their business. Furthermore, storage solutions must evolve with the constantly shifting requirements of the applications they support.

The ability of a storage platform to handle SaaS solutions with real time analytics is the biggest concern. The platform will need an architecture that performs at the highest level for both transactional and analytics workloads. Not every storage array can deliver consistently high performance under both types of workloads. In order to deliver consistently high user experience in a cost effective manner, it’s essential that the entire infrastructure stack – from the bottom storage layer up – is tuned for real-time analysis, as well as transaction processing.

Looking Ahead

While much has been made of the SaaS business model – subscription-based solutions that offload the infrastructure concerns for users – the future for what will set one SaaS solution ahead of its competitors is likely to be how well it can deliver differentiated functionality like advanced analytics. Most SaaS providers have adopted agile development practices and incorporated DevOps into their thinking to stay responsive to customer needs and maintain a competitive advantage. At the same time, deploying an agile infrastructure strategy that incorporates flexible storage solutions is essential, so that it can evolve with changing demands of the application and market.

SaaS is already eating up the traditional software delivery model, and in order to succeed, vendors must focus on embedding real-time analytics to deliver a strong user experience. At the end of day, this means SaaS infrastructure not only has to scale, it must also handle complex workloads in a way that will support the most competitive end-user experience. The winners in the age of SaaS will make strategic infrastructure choices that best support their fundamental offering and business model.

Josh Epstein is the V.P. of Global Marketing at Kaminario

Josh Epstein has 20 years of experience in technology marketing and strategy roles. At Kaminario, Josh is responsible for developing the company’s brand, driving global marketing programs, and telling the Kaminario story. Prior to Kaminario, he has held a range of marketing, strategy and business development roles at startups including Reddo Mobility, Gizmox, and Advanced Electron Beams as well as global technology companies including EMC, CA Technologies, Acme Packet, and Oracle. Additionally, Josh is an active advisor to several early-stage, Boston-area technology companies. He holds a B.S. in Operations Research from Cornell and an MBA from MIT Sloan.