How to Rank DevOps Opportunities in SaaS Startups

Programmers now rely on a growing number of developer-oriented services to accelerate the development of software-as-a-service applications.  

That’s because modern web and mobile applications are now so complex that code reuse is standard practice to keep organizations agile. Why reinvent the wheel when you can save 100 man years with a simple reuse of a few lines of Javascript or by bundling a Ruby gem?

Just as software libraries once offered shorter time to market and efficient code reuse, today developer-oriented services accelerate development in SaaS applications. The proliferation of well-defined API’s and the shift to true services-oriented architectures have created a tremendous opportunity for DevOps companies targeting developers.

Below are some of the characteristics for developer-oriented services to thrive.

1. Address Broad Use Cases

Companies that target functionality required by every SaaS application have a big head start. Content delivery networks are the purest example of broad horizontal functionality that every devops team makes use of. Akamai sports a $10B market cap because no web application can afford to be slow. All applications are designed with the presumption of a global reach that only a content delivery network can provide.

2. Target Common Pain Points

Don’t offer functions too close to what companies themselves might be developing as an extension of their business. Companies are rightly reluctant to outsource functionality which could be a point of strategic differentiation in the future. Entrepreneurs starting a developer-oriented service should be careful to tackle only that part of the product which is clearly common to all applications. Email marketing provides a good case study: companies like ExactTarget started by solving the email delivery problem (which offered no strategic differentiation for enterprises) and expanded their offering on the strength of that beachhead.

3. Solve Mission Critical Problems

Services that are vital to customers enjoy higher annual contract value when it comes to  subscriptions and lower churn. Billing and checkout services (such as Stripe and Recurly, for instance) are required to work flawlessly all the time. Developers love services that mask complexity in such necessary components of their applications. No developer should have to write code to interface with a payments gateway.

4. Create a Clean Abstraction with a Simple API

Offer dead simple functionality right out of the box. Every developer knows the joy of copy and pasting a few lines of Javascript or bundling a Ruby gem and unlocking 100 man years of functionality. Services with a clean abstraction are easy to demo and safe for customers to buy. Monitoring companies like Boundary and Crittercism can be deployed in an hour with instant results.

5. Create Instant Global Scale

Today’s startups face significantly lower barriers to entry. In many cases these barriers were destroyed by a slew of services targeting developers. Amazon Web Services used its ‘compute cannon’ to completely level the infrastructure playing field. The Open Source Software movement forded the moats and tore down the walls of the proprietary software castles. Developer services companies that invest in building a global-scale platform offer genuine value. PubNub has built a global real-time network that delivers 3 million messages every second with 1/4 second latency. Their customers leverage the scale of PubNub’s network when they connect to the service. Global scale can also come in other forms: Twilio has signed peering agreements with telecom companies around the world that enable the service to route voice and message traffic to any device.

6. Focus on the Boring Stuff

Companies that seem boring often have less competition and are highly profitable in the long run. Splunk started by helping developers make sense of log files. In the software world, this is the equivalent of opening up the septic tank to look for problems. Developers would rather be working on a big data meets artificial intelligence project. Few want to work on the mundane plumbing, making it perfect to be outsourced “as a service” provided it meets most of the criteria above.