I got involved in a meeting today at which the subject of “What is the definition of SaaS” came up. Duane Jackson of Kashflow had come up with:
- Hosted remotely
- Runs in a web-browser with no additional software required
- Paid for on a monthly subscription or pay-as-you-go model
- Single installation
- Multi-tenanted
Which is a pretty good summary. You can then get nit-picky and go though each of those criteria to see what is meant by:
Browser based – any browser or all browsers? What add-ins are needed – JavaScript (ok), Flash (maybe), Java Applets & ActiveX Components (probably not)
Paid for monthly – so how about having to pay a year in advance (probably); so leasing software is ok? (no!)
Single Installation – so how about SaaS vendors with servers in different cities & countries (that’s ok); one installation per customer (no!)
Multi-Tenanted – tables are shared across customers (ok); tables aren’t shared but everything runs on one instance of the database (ok); each customer runs on a single instance of a database (no!)
The first two points customers are directly concerned about: browser-based delivers easy access anywhere; monthly payments helps the cash flow and reduces risk if things change or don’t work out. The last two most customers don’t care about directly, but they do care about what it means to them: they reduce the cost to the SaaS vendor and therefore to the customer.
So I’ve come up with a simple test to determine what is a “true” SaaS product.
Next time you are on holiday, walk into the hotel lobby and log on to your application using whatever machine and browser they have. If you can access all the data and all the functionality in your SaaS application immediately, without having to download any extra software, it’s a true SaaS product.
I just can’t resist calling this The Touring Test.
Contrary Thinking 
[…] come up with a beautifully simple and equally beautifully named “Touring Test”. He says on his blog: Next time you are on holiday, walk into the hotel lobby and log on to your application using […]
[…] draw the line when it comes to definitions that are of almost no value to their intended audience. John Pearson discusses the Touring Test following a definition of saas offered by Duane Jackson of Kashflow who parses it in a masterpiece […]
Perhaps it’s semantics, but I’d argue that the SaaS model is no more than its acronym: SOFTWARE as a SERVICE. If it involves installing a plugin (be it for your browser or mail client or whatever), so be it. If customer data is kept in isolated databases, so be it. There’s a difference between defining a category, and evaluating the quality and usability of a product/service using the “SaaS” buzzword in its marketing. Not to detract from the wisdom of your comment: your article is a great yardstick.
[…] this sounds completely feasible until you read this definition of SaaS by John Patterson : Next time you are on holiday, walk into the hotel lobby and log on to your application using […]