I have been a late adopter of new technologies most of my life due to circumstances beyond my control. I believe this is true for many people in my part of the world, where economic realities drive a sharp wedge between what is desired and what is feasible. For many of us, the spirit is willing but the wallet is weak.Financial difficulties are an integral part of third-world entrepreneurship. It is easy to dismiss, say, an Indian software company as a “bunch of Indian cowboys” who lack innovation in product development—which, in this case, turned out to be a hilariously wrong assumption—when you don’t factor in the financial context in which they’re operating. When one of us does make it, you can bet there’s an admirable tale of pain and endurance behind that success.We’re not Indian (obligatory Sri Lankan announcement!), but South Asia in general is no Silicon Valley. We produce copious amounts of engineers, of course, but they tend to leave us. India leads the world in the business of exporting scientists, and Sri Lanka has no problem getting rid of its own stock. Product companies are a rare breed among the plethora of BPOs, IT outsourcing companies and call centres where most of our talent is employed.Many macroeconomic and financial factors hinder software entrepreneurship in Sri Lanka, but we have a cultural problem as well. Multiple studies over the past decade have established that Sri Lankan society is actually antipathetic toward business.Let that sink in for a moment: Sri Lankans are actively discouraged from entrepreneurship by their families, friends and society at large.That’s why we love to see young entrepreneurs embarking on their own, against the odds and the so-called good advice from people who “know better.” And at last, a startup ecosystem is slowly emerging in Colombo that just might be able to nurture these “cowboy” ventures into growth and success. It is for them—and those like them elsewhere in the world—that SaaS presents an easily accessible and viable business model.
Rise of Software-as-a-ServiceSoftware-as-a-Service is no longer a new frontier: over the past few years it has grown to be a mature and hugely popular way to deliver software products. Flexibility, ease of adoption, ease of scaling and low costs have made SaaS an attractive option for both small businesses and larger enterprises.In fact, SaaS has become so popular that its rapid adoption reflects a classic “creative destruction” scenario—an instance of old economic models being replaced by new ones. It has facilitated the development of internationally oriented small business entrepreneurship by making it much easier and cost-efficient to release scalable software services to the global market.According to this roundup of cloud computing forecasts, global SaaS revenues are forecasted to reach $106B in 2016, increasing 21% over projected 2015 spending levels. By 2016, there will be an 11% shift of enterprise IT budgets away from traditional in-house IT delivery toward various versions of cloud computing as a new delivery model.But it is not only the enterprise market that is shifting toward SaaS. A significant portion of the global SaaS market is B2C, and there are signs of rapid consumerization of IT. Instead of a centralized IT organization deciding which products to buy, product managers, marketers, engineers and data scientists determine which products they think would serve them best and buy them directly, often using a credit card. Thus, even B2B SaaS sales are becoming more like B2C.We at Vesess are grateful beneficiaries of these developments. Our own forays into SaaS started in 2008 when we launched CurdBee, and we have successfully continued that journey with Hiveage. For us, the cloud has been the great enabler, the humble web browser the great equalizer.
Our SaaS StoryA decade ago, before we started CurdBee and Hiveage, before we were even a web design agency, we tried our hand at developing software products for the Sri Lankan market. Despite having viable products and a handful of potential customers, these efforts didn’t really lead anywhere.So how could Vesess launch a successful software product to the global market a mere three years after these failures?Part of it can be attributed to growing up. The first products out of such a young company—both as an organization and as individuals—tend to be what Paul Graham calls class projects:
What goes wrong with young founders is that they build stuff that looks like class projects. […] There seem to be two big things missing in class projects: (1) an iterative definition of a real problem and (2) intensity.By the time we started work on CurdBee, the team had gained valuable skills and experience in the trenches, and had been strengthened by the addition of three brilliant programmers. However, while these were no doubt important factors, probably the most important change was happening in the software industry itself.Apparently the term “SaaS,” or software-as-a-service, was first mentioned in an internal document called “Software as a Service: Strategic Backgrounder” by the Software & Information Industry Association (SIIA) in 2000. They predicted that:
SaaS is heralded by many as the new wave in application software distribution. Following the maxim that “the Internet changes everything,” many believe that tradition packaged desktop and enterprise applications will soon be swept away by the tide of Web-based, outsourced products and services that remove the responsibility of installation, maintenance and upgrades from over-burdened MIS staff. SIIA believes that the software as a service model is capable of causing a sea change in the software industry.In 2008, when CurdBee was launched, this sea change was well under way. We got lifehacked, and never looked back.