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SaaS Architecture Maturity Model

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Dharmesh Shah recently wrote about a maturity model of Software as a Service (SaaS) architectures. Drawing on previous thoughts from Gianpaolo Carraro that scalability, multi-tenancy, and customization through configuration are requirements, Dharmesh laid out 5 levels of a SaaS architecture maturity from 'Chaos' to 'Utopia' and provided his thoughts on the economics behind each one.
  • Level 0 (Chaos); Every time you add a new customer, you add a new instance of the software.
  • Level 1 (Managed Chaos): Every customer runs on the same version of the software and any customizations are done via configuration.
  • Level 2 (Multi-Tenant, Highrise): You've got all customers running on a single version of the software, and they're all running essentially on one "instance".
  • Level 3 (Multi-Tenant, Build-Out): This is when you've got multi-tenant, single version of the software model. But, you can scale-out (add buildings at will).
  • Level 4 (Utopia): This is like Level 3, except you've figured out an efficient way to run different versions of the software on different "instances".
Gianpaulo's original maturity model moved from custom version and instance per customer through single versions for all customers but each on their own instances and on to single version with single scalable instance for all customers. Dharmesh added the Utopian level in which you can also effortlessly deploy "sandbox" instances for any given customer.

Dharmesh's main point in discussing the model was:
One of the big advantages for SaaS start ups is the opportunity to be economically efficient along many dimensions through multi-tenancy. But just because the opportunity is there doesn't necessarily mean that every start up is exploiting it equally.

The key behind the economic advantages is an architecture that uses "customization through configuration" and intelligent data partitioning. Without these two elements, you probably won't be able to move past Level 1 (Managed Chaos) and recognize the efficiencies of multi-tenancy.

Noel Huelsenbeck commented that this maturity model might not fit your organization's business model:
Also wouldn't your price point and overall market dictate what level you end up at? There's a small chance an app like Quicken for the Web would make a customization and hence be at level 3/4 but if I'm a Fortune 500 company I would bet will probably go back to Level 0 to get my business.
Commenter 'brk' made the observation that there are some big risks that come along with the big economics of being high on the SaaS maturity model. As you approach the point where all of your customers are sharing code, hardware (virtual or physical), and administration you run the risk of any small problem with a client can impact your entire client base.

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