I recently read a few articles about what it takes to build your own Private Cloud. It sounds like a good challenge to undertake if you want to prove your credentials as an Enterprise Architect. However, if you are an ISV seriously considering a SaaS strategy to build a recurring revenue stream, lower costs, improve service or open new markets for your business, there may be more important issues to think about before you jump into building Private Clouds.

The most critical one, in my view, is of making the SaaS product profitable. You need to understand who will buy your product and why, what they will pay for it, what the costs of building, marketing, selling and servicing will be, etc. I can tell you, from first-hand experience (Navatar Group is a leading provider for Force.com products for the Financial sector), that it is easier to build a SaaS product, than it is to make money on one.

Why? Because SaaS customers expect more flexibility, adaptability and constant improvement all at a lower price. Simply building a Private Cloud (or for that matter using someone else’s Cloud) and migrating your existing On-Premise product will not solve much. Before investing too much into Cloud development, it may worth spending some time to understand the cost of acquiring and servicing customers for your SaaS product.

For more on this subject, download a free whitepaper that I recently wrote, at http://navatargroup.com/WhitePaper.html

Alok Misra