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01/31/12

Customization in SaaS – Who draws the line?

In a recent article on CRN, I wrote about customization and its utility in SaaS. Different Independent Software Vendors (ISV) look at customization in different ways. Some feel it is too important and go the extra mile, while others make their SaaS product heavily configurable. It is up to the product managers to take a decision as to what is configurable. Configuration versus customization is an old debate and the answer is always situational.

When an existing on-premise or hosted product is “SaaSified,” it creates different challenges to ISV’s. Customization is a service charged at a premium on the “boxed” product and adds to the top line revenue. Of course, it means keeping a customized code based in a different branch in code repository, which is considered to be manageable. Now, that they have a single code base for their SaaS version, there is some un-learning required but they usually can’t say no to customization as their customers have got used to it.

On the other hand, a SaaS startup does not have the old customer baggage and hence starts creating a product from start and works with many assumptions, prepared by its product manager or Subject Matter Expert (SME). They build the product assuming that it will be configured and work with abstractions. They always have one source code branch on which they work till their product is released. After the release, if a customer asks for customization, the response he gets can vary from not possible at this time, wait for next release, it is in product roadmap to it can’t be done, etc! If the customization asked for is important, it can even lead to a customer loss as the product may not be termed as fit.

Product Managers have to think about the core product as well as the extended product. The engineering team needs to provide the solutions and infrastructure to make customization possible in SaaS. Having said that, where does one draw a line? After all, with customization, the maintenance cycle will become complex and costlier, the source code management will be a challenge in itself and the fixes will have to be analyzed across customization to minimize, if not eliminate, regression. However, it does generate premium revenue, adds to the top line revenue and helps to acquire a customer!

So, who takes a decision and caps the customization?

In my opinion, it is the business! The business must be aware of the challenges and complexity of the customization in SaaS products and has to look at different options on customization. I have worked with SaaS products, also sold as on-premise application from the single code base, and that adds another complexity to this already complex situation! It is very important that the entire organization gets accustomed to the concepts and challenges in SaaS. SaaS challenges and success factors outline some of the challenges. Once the organization is aligned to SaaS, a definition of the criteria to accept customization can evolve based on previous experience, complexity and challenges.

What is your experience with customization in SaaS?

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