Category: SaaS

What really matters to small business – PaaS vs SaaS vs IaaS

I was on twitter the other day and someone with a server virtualisation (IaaS if you are talking in a cloud sense) background made the comment that small and medium business will never use PaaS;  IaaS is the only thing that is really relevant to them.

I disagreed with this comment and half forgot about it. Last week I had a friend talking to me about just this scenario;  maybe a little confirmation bias at play here. They went through this journey about six months ago and it was interesting to see the decisions they made and why. I must point out that this is not a Microsoft technology stack story, and they chose some of our competitors for parts of their solutions in order to best meet their business requirements.

Their current situation was:

  • Small business (less than 20 employees) that specialised in art installation systems
  • A lot of repeat customers but also new customers purchasing directly from their website
  • Single server under desk running a common SMB ERP package, website (running on WordPress, file server and Exchange (Windows Small Business Server). To us folk with an Enterprise background this lack of high availability is unimaginable, but the reality is a lot of small businesses run this way
  • Server backup to USB drive every week with 3 on rotation that were taken to the owners house. Better rigor than some small organisations
  • The server was already at end of support on the hardware
  • No dedicated IT staff…as expected in an organisation of this size
  • Ad hoc consultant they used to do their WordPress development work
  • Website interfaced with the ERP application to process online purchases and to manage inventory

So when they started looking at this process, from a perspective of what their business objectives were. Some of the things that became clear were:

  • They didn’t want to manage hardware
  • They didn’t want to manage technology (any more than they had to)
  • They didn’t want to manage applications (at least any more than they had)
  • They wanted Enterprise availability and the ability to scale when the business grew

So where did they end up with their investigation? They chose the below technology options.

 Email and File Storage

Google apps and Google Drive. They didn’t need the additional functions offered in a similar offering, like Microsoft O365, that a lot of Enterprises would require. So this was the most cost effective option for them. Google Drive across the few office workers they had provided more than enough capacity to store, share and protect their files.

Very easy to scale a service like this as they just add more users into it with the added bonus that they could access this from anywhere on any device.

Winner: SaaS

Accounting/ERP Package

At the despair of the rather old school book keeper they had they moved away from their previous accounts package and selected Xero. Xero are an interesting company based out of New Zealand that have built a cloud ERP system from the ground up for small and medium businesses. You can read more information about Xero here.

The company they currently utilised had a SaaS offering as well, but it didn’t provide an easily addressable API stack for their website, so it was out, hence the move to Xero.

So what were their challenges with moving ERP applications? It turns out they were retraining the book keeper and importing their records. Both things they managed to do in the space of a week. Like the previous selection this also allowed them to access their ERP system from any location on any device, something never previously available to them (unless they RDP’d to the server under the desk)

Winner: SaaS

 Website

So they final step was their website. They wanted to make sure it was highly available, low cost and took as little administrative effort as possible.

They looked at some IaaS based services first including AWS, Azure and some smaller Australian IaaS providers. All these solutions could do want they wanted but they wanted to keep their costs and management effort down.

When they spoke to their WordPress consultant recommended Azure Websites as an option. They looked at this option and found it matched their requirements. They provisioned a site up on a 30 day trial and tested the service. Within the space of a few hours (with the help of their WordPress consultant) they had provisioned a website running WordPress, copied over the customised WordPress content, tested and had a fully functional WordPress website.

Their consultant spent a bit more time on interfacing with the Xero API stack and changing some of the website workflows, a step that would have had to be done in any scenario they had chosen due to the change of ERP system. They then moved it to production and have been running it since.

In the view of fairness I also believe AWS offer a PaaS website offering (Elastic Beanstalk), but I’m not sure if the company looked at this option or not.

Winner: PaaS

 Conclusion

So here we see an example of what matters to a small business; their business needs, not technology and most definitely not whether they have a preference for IaaS, PaaS or SaaS. They chose what worked for their requirements, required low touch from an ongoing technology perspective. This is pretty powerful when you consider that 96% of all businesses in Australia and have similar challenges (source here).

There were some further comments on twitter from others with an IaaS focus that it is “all about the application”. As we see from this example this is patently wrong, companies don’t care about the application, they only care about what they need to run their businesses successfully, the applications are just tools they utilise to help achieve this outcome.

What are your thoughts? Disagree or agree would love to hear them