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Is SAML All You Need to Offer Business Customers SaaS Single Sign-on?

How many customers can you serve with it?


SAML is a protocol, a language. Languages are great for communicating, but a certain language is only useful when communicating with other speakers of the same language.

In business, the value of a language is dependent on how big a share of your current and potential customers speak it. Your choice of language(s) can greatly affect what kind of business you can expect: doing business only in Finnish limits your market to 5 Million people, whereas English lets you address more than a Billion people. You have three options:

  1. Limit your market to only those who speak your language of choice
  2. Learn to speak more languages to address a bigger market
  3. Try to teach more potential customers your language of choice

I have never heard of a successful example of the last alternative in business, have you?

How big a share of your customers "speaks" SAML?
I am not aware of any independent research on SAML adoption, but the largest number of customers I have seen a SAML vendor report is about 800 (written in August 2012), which is a good number for any vendor focused on a very specific area. However, if we presume that the market leader has 800 customers and a market share between 10 and 20 percent, that would lead lead to a conclusion that somewhere around 5000 organizations have invested in SAML solutions. How many of those are in production, and to what extent is another question.

About 5000 organizations, is that much or not? Single sign-on starts having a major impact on the usability of SaaS applications when there are more than a handful of users within an organization. For many common SaaS applications (for instance HR, CRM and document management) that requirement is already met by organizations with 100 employees. According to US Census Bureau (2008), there are more than 100 000 enterprises with 100+ employees in US alone, and the figure for EU is about the same according to Eurostat. Based on these figures, there must be at least 500 000 enterprises of that size in the world. Obviously 5000 organizations is only a fraction of the total number of organizations who would need single sign-on to achieve satisfactory usability for SaaS applications.

For you as a SaaS provider, this means that a very small share of your potential customers currently speak SAML, unless you are focusing on very specific segments where the adoption is higher.

Can you teach your customers to speak SAML?
Your options for teaching customers to speak SAML are:

  1. Reselling some commercial SAML product
  2. Offering a SAML Identity Provider on your own, for example based on some open source software
  3. Reselling or hooking up with some Authentication-as-a-Service offering

When you evaluate these options, the most important criteria are how they affect your business:

  • your value proposal to your customers
  • your revenue and time to recurring revenue
  • your support costs

The core of the SaaS value proposal is simplicity. You tell your customers that you will run and maintain everything for them, and they only have to pay their bills. If you require your customer to get something else from somewhere else in order for your application to really work, then simplicity will suffer, both technically and business-wise.

Recurring revenue and loyalty is what SaaS is about. Your focus should be on engaging as many users as possible within each customer organization as soon as possible. The first hundred days is a well known time span for most people, from a newly elected American president to a new couple. If you or your customer spends that time installing and configuring some on-premise software to improve the usability of your SaaS application, then adoption and usage will suffer, which in the end means less revenue and more churn.

Some of your techies might tell you that they found this great piece of open source software, which they can develop into a SAML Identity Provider that you can give your customers for free. They are probably right. However, what about support? Is your core business to maintain free on-premise software? Do you have the resources and processes for it? Can your customers use your free SAML solution with other SaaS applications as well? Who will support that? Or should customers have one free SAML Identity Provider for each SaaS application?

From a business point of view, it obviously does not make sense for you as a SaaS vendor to try to teach your customers to speak SAML, and it is not very likely to succeed either, because it is usually the one with the money who calls the shots.

How can you offer business customers SaaS single sign-on?
First, let's have a look at what is really required. You need to know who the user is, which typically means information like:

  • name
  • organization
  • business unit
  • access rights
  • email
  • phone

Much of that information can be found in, or derived from, the user directory (AD, LDAP etc) of your customer organization. Your job is to get that information for a user who has authenticated against it, and transfer it to your application in a secure way. None of those steps involve rocket science. The trick is of course to do it in a way that requires as little deployment and maintenance work as possible, both from you and from your customers. That is essential to achieve rollout speed, high adoption and low support costs.

You  need a solution which supports SAML for customers wanting to use that, and a more simple way for the rest. As said before, the core of the SaaS value proposal is simplicity.  We have very good experience from using customers' existing intranet web servers to achieve similar functionality in a less complex way, a solution which practically any customer organization with 100 employees or more can roll out in hours  If you want to read more about such a solution, click here.

More Stories By Kjell Backlund

Kjell Backlund, CEO of Emillion, is a seasoned software business entrepreneur with over 20 years experience in international business. He founded Emillion in 2001, with the vision that automating sign-on and user management would be essential to the success of SaaS and Service Desk applications(www.emillion.biz).

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