Managed Service vs. Self Service Software

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There is a ton of software out there that is SaaS (Software as a Service). ¬†This doesn’t mean at all that it is easy to use. ¬†What it means is that there is no CDs or servers to install. ¬†You go to a website and login.

Example of Managed Service SaaS: Eloqua.
Eloqua was in the marketing automation space for a long time before I worked at Marketo.  They built a SaaS solution that was so difficult to use that you needed a specialized consultant to run it for you. That consultant spent countless hours learning the software and even learning to program if needed.  They then turned around and charged a fee to run the software for you.

Any software that is poorly designed can be turned into a complicated mess that only trained experts could use. ¬†Most software that requires “certification” falls into this camp.

Example of Self Service SaaS: Google Apps.
In the old days, you installed Exchange, SharePoint and MS Office if you wanted email and document management and client applications. ¬†Installing those apps required MCSE training. ¬†Google redesigned the enterprise from the ground up and came up with Google Apps. ¬†It doesn’t do everything that Microsoft does, but it does enough. ¬†It works. ¬†You can login to it and get started right away. No certification required. ¬†Self-service is defined as “Easy enough that you can do it yourself.” ¬†Minimal training and support are often required, but not ongoing management.

Analogy: Managed vs. Self Service
Managed Service is like having a fleet of boats of different shapes and sizes.  They are used to ferry people across a wide river.  The more boats you have, the more people you can ferry.  Half a fleet is still pretty good.

Self-service is like building a bridge. ¬†Half a bridge is useless. ¬†A bridge is a single¬†coherent¬†system. ¬†It needs to have one architecture and you build to scale to a certain number of customers. ¬†When you finish and cars start driving on it, it’s hard to change the details. ¬†People get angry when you change something they are used to and use themselves.

According to this analogy, building a managed service solution does not accrue to a self-service solution. ¬†More boats don’t equal a bridge. ¬†If you want to build a bridge, then build a bridge. ¬†Think about the¬†architecture¬†and do it¬†right. ¬†If you want to build a managed service, then don’t worry about the “ease of use”. ¬†Focus on power and¬†flexibility.

Having clarity of what you are building is important. ¬†There are tons of profit in both camps. ¬†One word of caution: ¬†Be careful building Managed Service solutions…if someone comes along with a self-service version of the same thing, they will eat you alive.


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