For SaaS providers, faster applications lead to higher adoption rates and improved developer productivity

Contributed by Tammy Everts. 

For software as a service (SaaS) providers, application speed now stands as a huge competitive differentiator. Once focused on gaining advantage through features, vendors are now concentrating on performance, and for good reason: test data consistently shows that faster applications boast significantly higher conversion rates than their sluggish counterparts.

The SaaS market continues to grow

The push to gain a competitive advantage through performance has gained momentum due to consistent growth in the industry. Worldwide SaaS revenue is forecast to reach $14.5 billion in 2012 – up 17.9% from 2011 – with long-term projections topping $22 billion by 2015.

This strong market growth coincides with greater understanding amongst companies as to the true impact of application performance. Companies increasingly realize that performance metrics have huge effects on productivity, employee morale, and customer satisfaction. 

Slow web applications can quickly escalate to a serious productivity loss

As SaaS applications predominantly serve business-related functions such as customer relationship management (CRM), accounting, collaboration, and resource planning – all highly time-sensitive tasks – a slow web application can quickly escalate to a serious productivity loss. A recent survey by Kaminario cited poor application performance as a cause of reduced employee productivity in 25% of respondents. With this in mind, it’s easy to see why poor performance can take a SaaS vendor out of the running early when customers consider their options.

"The function of SaaS applications is to increase efficiency, to streamline inter-departmental functions,” says David Madison of equaTEK, an enterprise web solution developer. “When prospects have a free option, there’s no room for performance drawbacks. Our customers are very sophisticated, and they feel high performance should be inherent to any application they use. As such, applying front-end-optimization to our products became a matter of how, not if."

How does front-end optimization boost application speed?

Front-end optimization (FEO) optimizes HTML to speed up page rendering by using techniques such as rewriting object names, re-ordering when/how objects are rendered, re-ordering when scripts are executed, and optimizing content based on the requesting browser. 

To accelerate their applications, SaaS vendors such as equaTEK have two main options: optimize pages manually in-house, or seek an automated third-party solution. Justifying the latter is difficult for many vendors, as they usually have some of the technical chops needed to optimize in-house. What they don’t have is the time.

equaTEK faced just such a dilemma. After recognizing the importance of front-end optimization, they began hand-coding pages in an effort to do their own optimization. They soon realized that performance tuning was time-consuming, complex, and demanded the skills of their best developers. The company began exploring third-party solutions, eventually settling on a trial of the Strangeloop Site Optimizer.

"You can spend a lot of hourly rates and weeks trying to enhance the performance of software functionality, whereas a matter of installing Site Optimizer accomplishes a milestone leap forward that is just amazing," says Madison. "I’d much rather engage an application that’s going to take me from 0 to 50 right now, guaranteed, than spend a whole lot of time working out how to tweak this line of code versus that line of code in an unknown time period. Not only does this take a lot of an engineer’s time, there’s also the risk that you get very little improvement."

Automating front-end performance leads to six-month ROI

After implementing Site Optimizer, equaTEK's productivity gains had a quick, measurable impact, leading to a six-month return on investment.

"Using our average billing rate, we probably had a rate of return of 250 to 300 man hours," says Madison. "I would say that we probably shaved six months off our internal production work. So our return was six months. That’s part of the reason that, for us, buying Site Optimizer was a no-brainer. It’s not often that you get to see that type of a turnaround."

Developer productivity is one key benefit of automated performance optimization. Increased conversions is another. Internal testing of client SaaS applications accelerated by Strangeloop shows that a 50% increase in response time boosts conversions and page views by 5% and 26% respectively, while decreasing bounce rates by up to 14%.

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