Bessemer CEO summit presents 10 laws of SaaS, ignores SLAs?

In his recent blog post, Philippe Botteri from Bessemer Venture Partners lists the “10 Laws of SaaS” from their recent invite-only event for CxOs. I agree with 9 of the 10 laws, but disagree with law 6:

6. One Datacenter. Invest early in backup and disaster recovery, but stick to one data center, at least until well after IPO.

How many data centers you have does not matter. What matters is your SLA, and there is no mention of service level agreements in the “10 Laws of SaaS”.

I think this focus on the number of data centers is wrong. Customers only want to know the terms of your SLA, and whether you can meet those terms when a problem occurs.

Your SLA: What you do when things go wrong

ISVs must answer hard questions on uptime and security from new SaaS customers. B2C ISVs with Web 2.0 sites might be able to avoid these for a while. B2B ISVs cannot.

A tough and fair SLA is vital to your success as an SaaS ISV. You must focus on your SLA from day 1. You will ask customers to trust you, your software and your systems. If your SLA is not credible (or worse, does not even exist), you will not make any sales.

Your SLA is vital to your success in a way your support offer was not with on-premise sales. Any SaaS problem is seen by all your subscribers. You have to react, and you have to react now. You do not have time to stop and think, just act. You have to do your thinking when you write your SLA, not when a problem turns up.

CEOs: Spend less time on golf and more on your SLA

Did you handle the problem well? The answer is up to your subscribers, and not you. What they expect is in your SLA. You might do a great job of fire-fighting, but if you do not do what your subscribers expect then you have a big problem.

Do not spend your time worrying about keeping your hunters and your farmers separate. Instead, make your CEO your SLA champion!

Your SLA is at the heart of your SaaS business. Ignore it and you will not be going to many invite-only events at Golf and Country Clubs in Silicon Valley.