Nice aaS: Computers as a service - the revolution

Nice Aas. Perhaps no other event title has provoked more double-takes in Club Workspace history! But 'aaS' is, of course, an acronym for 'as a service', the term applied to computer services that are sold as a such, rather than as products.

ToMax Talks and Dreamstake brought this cheekily titled event to the Clerkenwell Club Workspace venue. The event explored how computers as a service make life easier for the consumer. Another topic discussed were tech startups who want to sell their software, infrastructure or platform as a service.

There were three speakers on the night. The first wise words came from Dreamstake’s CTO, Ralph Stenzel. The technical whizz behind Dreamstake’s new platform gave a very brief introduction to 'aaS' before the two keynote speakers took to the stage.

Ralph Stenzel’s Introduction to Aas

Ralph kicked us off by explaining different kinds of 'aaS'. He started with SaaS: Software As A Service. Ralph’s example of SaaS was Google Mail. Their mail-delivery system is their software, and end-users use it as a service.

Infrastructure as as service, IaaS, was the second kind of service that Ralph introduced. A current and relevant example of IaaS is Cloud based storage, such as Dropbox. The final type of service was PaaS, platforms as a service. An example of a PaaS is AppEngine from Google. End-users treat Google’s library-like platform as as service.

Charlie Pool of HitMeUp

After Ralph had cleared up some definitional problems, Charlie Pool of HitMeUp took to the stage. HitMeUp, Charlie explained, is a competitor to Groupon that wants to make 'the whole group-buying thing less annoying.' HitMeUp makes group-buying relevant to location. Therefore, instead of getting spammed about offers that are nowhere near you, a HitMeUp user only receives info about deals that are a reasonable distance away.

Also, you’ve guessed it, HitMeUp is a PaaS model. As an entrepreneur in the PaaS field, Charlie found himself in a unique position to chat to the audience about what works and what doesn’t.

Charlie declared that the time is right for startups who want to launch a PaaS, or any kind of aaS, service. Charlie explained that a combination of the banking crisis and the rise of social media have paved the way for aaS services to take off.

The banking crisis has undermined the reservoirs of trust that consumers once had in banks. A knock-on effect of this is that many longstanding brands have seen their brand-equity slide too. This is due to a widespread change in mindset. Without even realising, consumers are asking themselves: if huge banks can fail, what’s stopping huge brands from failing too? Social media is invited to this party as it enables small startups to achieve massive exposure. As big brands drop the ball, small startups can pick it up! And as they’re picking it up, their skillful catches can be monitored and praise by the masses over on social media.

Therefore, if your platform, software or infrastructure (as a service!) does something that these old, slow-moving mega-brands do - and does it better! - then now is the time to push it hard! Charlie’s example: the death of bookshops and DVD outlets, caused by online sharing platforms.

Paul Joyce of GeckoBoard

Paul Joyce was the second keynote speaker to take to the stage. Mr Joyce is the cofounder of GeckoBoard, a SaaS solution that allows users to pull disparate data from a volley of different sources. An interesting point to note is that many of the sources that GeckoBoard collates data from are aaS services! Without the rise of aaS, Paul’s SaaS wouldn’t even exist!

But instead of talking about GeckoBoard, Paul spoke with great insight and intelligence about the upsides and downsides of running a SaaS business.

Paul warned SaaS entrepreneurs that they will have cashflow problems! The reason for these monitory misdemeanours is this: if your software is packaged as a one-off buy that the end-user receives as a CD, then you get a pile of cash up-front that you can use to grow your business. However, as SaaS businesses are usually subscription models, you will receive a smaller amount of money each month. Unless you attract massive volume very quickly, you will encounter slow growth.

After this bad news, Paul threw out another problem! SaaS businesses have to spend their CAC (Cost to Acquire Customer) before they know the customer’s LTV (LifeTime Value). This means that startups take the risk of spending £500 on advertising, for example, only to attract ten customers who end their lifetime-engagement after spending £30 each. If your platform really is the bees knees then this problem won’t arise, but it is a risk that SaaS models take.

After all of this doom and gloom, Paul turned to the positives of being in the Saas scene. The industry is growing, and as the supporting tech grows alongside it, it’s only going to get stronger. Computers aaS is becoming the norm. Is it easier to buy your tunes from iTunes or a CD shop? The easy answer to that question demonstrates the success of aaS, an it’s here to stay.

Thank you

Thank you to Charlie, Paul and Ralph for delivering some expert advice, and thank you to Dreamstake and ToMax Talks for brining the guys into Club Workspace. Thanks also to everyone who came along for the event.