re:Invent Announcements SaaS Providers Should Care About
Recap of re:Invent 2023 SaaS announcements from GenAI, Step Functions, DynamoDB, S3, Markeplace and more based on feedback from community SaaS Advocates.
Another great re:Invent is in the books, looking forward to re:Invent 2024 already! Before I get too far ahead of myself though, I wanted to reflect on the many announcements by AWS at re:Invent 2023, and about which ones are the most relevant for that Software-as-a-Service (SaaS) community (other than the launch of the SaaS on AWS page of course) - one of the fastest growing and thriving communities of builders, developers, founders, product management, and other business and technology roles.
It’s no easy task sorting through dozens of announcements at or around re:Invent, and trying to understand which ones SaaS builders will care about. So, I asked SaaS advocates in the SaaS community which of the re:Invent announcements they were checking out, and why they matter to them. To all SaaS enthusiasts who joined us in person and virtually at AWS re:Invent 2023, Thank you!
Figure 1 - HTTP Endpoint from the sample “Generating Invoices using Stripe”
SaaS Use Cases:
Tenant Onboarding, Configuration, Billing... many more
Why Should SaaS Providers Care?
Because SaaS providers already use AWS Step Functions (Step Functions) to orchestrate a variety of operations. Our own SaaS Serverless Reference Architecture uses Step Functions to orchestrate its tenant onboarding. This helps customer service teams onboard customers rapidly reducing business metrics such as book-to-bill accelerating revenue recognition which finance teams love. Microservices orchestration, Data Processing, and Machine Learning coordination are common activity for SaaS providers already, but now, being able to call external services opens up SaaS use cases involving third party services. These new endpoints also help keep external calls secure by storing secrets in AWS Secrets Manager, and provide error handling and retries.
Figure 2 - OpenSearch Dialog Under Integrations in DynamoDB console
SaaS Use Cases:
Low latency database searching, Metrics and Analytics
Why Should SaaS Providers Care?
Because SaaS is all about data. Storing data, analyzing data, processing data, gathering intelligence from data... you get the picture. Data is always on the move. At SaaS scale, the lift of Extract, Transform, and Load (ETL) can seriously affect Operational Efficiency. So, anything that makes moving data easier is good for SaaS. If data can land in services like Amazon OpenSearch and Amazon Redshift, then it removes undifferentiated heavy lifting of setting up the analytics you need to operate your SaaS solution successfully. Imagine reducing the burden on operations teams who desperately stitch data from various tools such as CRM, customer success platforms, billing, etc to understand the impact and user experience of customers.
I asked AWS Community Builder Jason Wadsworth what SaaS announcements he was excited about, he offered “some of the zero-ETL integrations look really interesting. Especially if I want to look at data across tenants for aggregate analysis. I haven’t looked into this yet, to see what limitations there are, but being able to access data in different places without an extensive process is potentially huge.”
Because many SaaS customers prefer to purchase SaaS solutions on the AWS Marketplace. SaaS providers find Marketplaces' channel partners, free-tier listings, and private offers provide them the most flexibility for setting up their go-to-market motions. Still, for some SaaS providers, listing fees were making it challenging to bring themselves to list early. Well, those fees went down in many areas, but public subscriptions for SaaS being reduced to 3%, private offers 1.5% to 3% is particularly important to SaaS providers. Not only does Marketplace help SaaS providers reach customers globally, but this helps reduce Cost of Acquisitions (CAC) costs which is a large investment for SaaS companies.
Jon Yoo CEO of Suger.io, and AWS Partner and Marketplace Integrator, posted on LinkedIn - “the best news from AWS Reinvent last year was the lowering of the marketplace fees from 7-10% to 1.5-3%.” When I reached out, he was even more effusive, saying ”half my customer success calls now raving about the drop-in marketplace fees and how that allowed them to get buy-in from execs.“ Given the potential impact of listing on Marketplace for SaaS providers, this is pretty exciting (well... as exciting as billing gets!)
Figure 4 - New Directory Bucket Type for S3 Express One Zone
SaaS Use Cases:
Lower cost, lower latency, high throughput object storage
Why Should SaaS Providers Care?
Because for SaaS providers, Amazon S3 has always offered highly resilient, comparatively inexpensive storage, but at the cost of some latency. As AWS has offered more storage classes, SaaS providers have been able to innovate, leveraging S3 for more diverse use cases. Amazon S3 Express One Zone gives SaaS providers a different storage profile, one with up to 10x lower latency. This provides more opportunities for SaaS providers to match storage profiles to specific SaaS use cases. We love this feature especially for industries such as Media and Entertainment companies building SaaS where file processing for global distribution can be expensive and time consuming.
Ryan Worl, co-founder and CTO of WarpStream, recently discussed S3 storage and the new S3 Express One Zone with SaaS Advocate Gwen Shapira on her SaaS Developer Community live stream. Ryan, who described their use of different storage classes as “we can deliver a really good experience for those pure analytics use cases with S3 Standard, but with S3 Express One Zone we think we can hit pretty much the whole spectrum.” Since WarpStream is building Kafka with an S3 backend, they will offer customers more flexibility from a latency and cost perspective. “You can say these topics are low latency topics, and we are going to write those files to S3 Express One Zone, and the data will land with low latency, but the thing that we’ll do immediately after that essentially is we will compact the data out of S3 Express One Zone, into S3 Standard so you get the lower storage price“ offered Ryan - whose CEO Richard Artoul also dropped a must read blog - S3 Express is All You Need on the topic!
Figure 5 - Enabling Zonal Autoshift in the Route 53 Application Recovery Controller
SaaS Use Cases:
Building reliable SaaS solutions
Why Should SaaS Providers Care?
Because reliability matters. The AWS Well Architected Framework has a whole pillar dedicated to it. While it’s not a SaaS-specific topic, SaaS providers need to be especially sensitive to unexpected failures, regardless of their cause. Building truly resilient solutions involves a lot of heavy lifting, so if SaaS providers can shift some of that responsibility to Amazon Route 53, that makes building resilient SaaS more accessible. As SaaS companies shift to acquiring enterprise or mission critical customers, this becomes a fundamental requirement differentiating SaaS companies from other solutions.
Speaking to AWS HeroVlad Ionescu, who has been looking into Zonal Autoshift, he states - “It makes it easier to move away from an impacted availability zone (which is helpful not only for Disaster Recovery scenarios but also for things like upgrading a cell or AZ-wide stack, for example), it comes with built-in regular practice runs, and it eliminates a bunch of undifferentiated feature flags and DNS logic that engineers had to carefully implement, operate, and maintain.” I expect a lot of SaaS providers who are leveraging multi-AZ strategies for disaster recover to check in on Route 53 Application Recovery Controller and its Zonal autoshift before long.
Customers building with GenAI are experimenting and launching new experiences while expanding their technology stacks to solve both customer and operational efficiency and scale with SaaS as a leading business model. AWS Community Builder Yehuda Cohen from AWS SaaS Competency PartnerSela, who has been working with GenAI customers said - “We’re really excited to have a capable language model operationalization capabilities within the AWS ecosystem. We’ve used Claude 2.1 on Bedrock and find it to be a really useful implementation that rivals competitors but allows our customers to remain within the AWS ecosystem.“
Ben Ellerby, AWS Hero and CTO of aleios has been working with Bedrock with his SaaS customers, and offered “Bedrock has made a strong strategic play as a multi-model platform by providing fully Serverless invocation, unlocking experimentation and aligning cost with customer usage. Most importantly, as SaaS companies need to show they can handle tenant data in a secure and compliant fashion, Bedrock allows clear isolation of models and data, and can enable further safeguarding for particular use cases.”
Figure 7 - Werner Vogels very concerned about costs as The Frugal Architect I’m cheating here, but when I reached out to AWS Ambassador and Community Builder Jimmy Dahlqvist asking about his favorite announcements, he went in a different direction: “I have one favorite for sure, not really launch per se, but still very important for SaaS. That is ‘The Frugal Architect’ introduced by Werner. The reason for that is not that you, as a SaaS company, should follow the principals to lower your cost, instead you follow the principals to lower your carbon footprint. The reason for that being important is that companies in Sweden are very environmentally aware and they create sustainability goals and indexes, and everything you buy and produce is included. So, a SaaS service that has a sustainable mindset and a low carbon footprint is important.”
When we say “Frugal Architect”, first thing comes to mind is about cost and how SaaS providers can build/operate SaaS solutions in a cost effectively manner. I’m sure people are getting sick of me talking about FinOps and the importance of understanding your unit costs in SaaS by now. We’ve written blogs on how to Develop a Cost-Aware Culture for Optimized and Efficient SaaS Growth, blogs on Optimizing Cost Per Tenant Visibility in SaaS Solutions, and blogs on Simplifying Tenant Cost Allocation in a SaaS Solution on AWS with CloudZero. Speaking of CloudZero, I reached out to Erik Peterson - AWS Ambassador and Founder & CTO of CloudZero. Erik was thrilled to see cost take front and center in the AWS keynote messaging, and to hear his company’s tagline “Every engineering decision is a purchasing decision” become part of the AWS lexicon. If you’ve got questions on how to get visibility into your unit costs, you should definitely reach out to CloudZero.
Is that all?
In this blog, we’ve covered just a few of the re:Invent announcements that might be relevant for SaaS builders. I’d love to hear from you if there are any other re:Invent announcements that you think you’ll be using to build out your SaaS product.
Here are a few more announcements I’m looking forward to digging into that I couldn’t get to today:
