Reinventing your technology product

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Reinventing your technology product strategy with a SaaS delivery model

G P S T E C 3 0 6

Craig Wicks

Senior Manager – AWS SaaS Factory

Amazon Web Services

Judah Bernstein

Sr Solutions Architect – AWS SaaS Factory

Amazon Web Services

Intro and setup

Craig Wicks

Product manager

Judah Bernstein

Technical architect

AnyCompanyA fictitious on-premise software vendor


Current situation

Current situation at AnyCompany

A publicly-traded, established player in the ERP space with a focus on the

manufacturing industry.

On-premise

deployment model

Annual

cost+

500 enterprise

$300M in ARR

12 Weeks

onsite resources

10 year old

product

AnyCompanyA Fictitious On-Premise Software Vendor


Business opportunity

A new business opportunity emerges

”We are looking to migrate from On-Premise Delivery Model, and Obtain

better margins”, AnyCompany

On-premise

to cloud

Margin &

cost-structure

High growth

mid market

Onboarding and

consumption

New features

and services

AnyCompanyA Fictitious On-Premise Software Vendor

Year 0 Year 1 Year 2 Year 3

Customers 10 54 286 898

Revenue 0 (MVP) $3.6M $22.3M $84.2M

Gross Margin 35% 60% 75%

Operating Profit -69% 11% 45%

Expected customer adoption and $$

054

286

898

0

500

1000

Y0 Y1 Y2 Y3

Customers


Customer expectations

SaaS customer expectations

”I am looking for an ERP solution that is managed for me, with frequent

feature releases, and pay-as-you-go pricing”, ExampleCorp

ExampleCorpA Fictitious Customer of a Product to Deploy..

Highly available

and scalable

Management

& support

Low-cost &

pay-as-you-go

To get started

& obtain value

Regular feature

releases


Product strategy

SaaS platform requirements

Margin

efficiency

Zero downtime

agile deployment

Volume,

& usage tiering

Telemetry

activity

Compliance

segmentation

Consumption-

based pricing

Defining a Consumption-based Billing Model

Use$0.00/unit hr

10 unit/hr cap

Free

Enterprise

Contract

w/ overages

Plan Tiers- 100 unit hr

- 200 unit hr

- Unlimited

Cost Structure

• Compute

• Storage

• Database

Upsell

• Feature

• Pack

• Overage

Standard

Use$1.00/unit hr

Dimensions- Feature 1

- Feature 2

- Feature 3

AWS Marketplace

• 1,400+ ISVs

• Over 5,200 product listings

• 230,000 active customers

• Over 650M hours of EC2 deployed monthly

• Deployed in 18 regions

• Offers 39 categories

• Flexible consumption and contract models

• One consolidated AWS bill

• AWS’s pace of innovation


Minimum viable product (MVP)

Reducing risk with a minimum viable product release

We want to migrate incrementally to multi-tenancy.

Work: ✓ Need a minimally invasive approach to reduce their work effort to introduce a minimum viable product (MVP) of their SaaS offering into market

Timeline: ✓ 6 months

Cost: ✓ Maintain operational and cost efficiency (on the cheap)

Additional Requirements: ✓ Minimal code changes

AnyCompany MVP


Product architecture review

Review of the Existing Product Architecture

Client

Browser

• User Interface

• Accounting

• Products

• Orders

• Inventory

• Shipping

• Delivery

• Billing

App server

(Tomcat)

Web server

(Apache)

Database

(Oracle)


SaaS migration patterns

Common migration models

Lift and shift

Web

App

Web

App

Web

App

Pros

• Time to market

• Minimally invasive

• Simpler isolation story

Cons

• Agility/innovation

• Cost

• Manageability

Layer-by-Layer

Web

App

Web

App

Web

App App

Pros

• Incremental

• Moderately invasive

• Quick successes

Cons

• Time to market

• Scale, availability

• Cost efficiency

Service-by-service

Web

App Service Service

Pros

• Incremental

• Full modernization

• Scale, availability, agility

Cons

• Time to market

• Data model migration

• Complexity (invasive)

Net new services with lift & shift approach

Web

App

Web

App

Web

App

Tenant 1 Tenant 2New tenant

Tenant user authentication

Tenant routing

New, shared

services

Tenant

management

Tenant admin

Identity

Registration /

onboarding

On

bo

ard

ing

, D

evO

ps


Lift and shift migration strategy

Lift and shift to SaaS delivery model

Turn-key migration

Container-based migration into

Amazon EKS with namespaces,

Amazon Aurora Database

Tenant isolation

Multi-tenant pooled file storage,

dedicated database per Tenant

w/Shared cluster.

Data Security

Client-side encryption, JWT w/

tenant context, SAML 2.0

federation + OIDC

Zero Downtime

Rolling updates, canary

deployment,

service discovery, A:B testing.

Tenant Monitoring

Kubernetes metrics, CloudWatch

Container Insights, Prometheus,

Thanos, Grahana, Datadog.

Continuous Delivery

CI & CD with Github, Jfrog (Pipelines,

Artifactory, Xray, Mission Control),

Pulumi for IaC

Selling the SaaS solution based on consumption

Monitor tenant activity

Kubernetes metrics for each

tenant namespace.

Digest customer usage

Real-time analytics to poll

develop composite unit.

Usage cost assessment

Benchmark cost per tenant for

each product use-case.

Mock product listing

Draft a pseudo product pricing

listing for billing models.

Integrate billing provider

Integrate AWS Marketplace SaaS

subscriptions and contracts.

Meter and verify entitlement

Define category, dimensions. post

metering records, get entitlements.

Integrating subscription billing with AWS Marketplace

Customer

Customer

subscribes to

product listing

3

SaaS landing page

Customer

sign-up

or Sign-In

3

Provider

Create seller

account, and

product listing

1

Marketplace

Product

listing In AWS

Marketplace

2

x-amzn-marketplace-token

SaaS backend

Persist

customer ID,

manage

subscription

4

ResolveCustomer

Marketplace

Verify

entitlement &

meter usage

5

Ge

tEn

titl

em

en

ts

ba

tch

Me

terU

sag

e

Cost Explorer

View usage

to charges for

Marketplace product

7

AWS billing

Monthly bill

For AWS

Marketplace product

6Bill customer

Exp

ose

usa

ge

List product


Retrospective

6 months after launch…

OutagesFeature releases result in

production outages.Unknown why a few key

customers left the platform

Churn

Introduce real-time telemetry, and analytics

Telemetry

FeedbackImproved performance,

features, and reduced cost

De-couple the monolith into microservices

Cloud-native Refactor

Introduce spa, dependency injection, and multi-tenancy.

Lessons learned

The 6-month window limited the teams ability to deliver the highest quality product, because of legacy product

constraints

Our MVP approach to lift and shift to a SaaS delivery

model allowed us to test the waters, and fail-fast

but not without risk

Our go-to-market approach was aligned to AWS and accelerated our time to market but we had

to ensure all potential customers could be served

Achieving multi-tenancy at compute layer for initial

savings and efficiency allowed AnyCompany to meet initial

margin requirements

A number of our existing on-premises customers

were looking for turn-key migration paths to the SaaS

deployment model

Some of our cost structure was unaccounted for, and resulted

in an eroded margin for a subset of our contract and

consumption based customers


Related sessions

Related SaaS sessionsBreakouts

• ARC410 – Serverless SaaS deep dive: Building serverless SaaS on AWS

• ARC210 – Microservices decomposition for SaaS environments

• GPSTEC337 – Architecting multi-tenant PaaS offerings with Amazon EKS

Chalk talks

• ARC413 – SaaS metrics deep dive: A look inside multi-tenant analytics

• GPSTEC306 – Reinventing your technology product strategy with a SaaS delivery model

• ARC305 – Migrating single-tenant applications to multi-tenant SaaS

• API308 – Monolith to serverless SaaS: Migrating to multi-tenant architecture

Workshops

• SVS303 – Monolith to serverless SaaS: A hands-on service decomposition

• ARC308 – Hands-on SaaS: Constructing a multi-tenant solution on AWS

Builders sessions

• ARC405 – Building multi-tenant-aware SaaS microservices

Thank you!


Craig Wicks

Senior Manager – AWS SaaS Factory

Judah Bernstein

Sr Solutions Architect – AWS SaaS Factory

[email protected] [email protected]

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Reinventing your technology product

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