More on compliance as a driver for economies of scale

I've coverd in a previous post the benefits and attractiveness of economies of scale in the SaaS world; and hinted the need for compliance. Hosters and their SDPs will necessarily need an increased knowledge of the application architecture if they want to optimize and maximize the efficiency of their operations.

Economy of scale is achieved when there's an increased amount of shared resources. In a simplified view, at minimum a hoster can share the space in their building for you to plug your own server (the co-location offering), all the way up to the other more specialized services.



The higher you go on this spectrum, the more contraints the ISV will have on how it does certain things. Again, why compliance is important? Because it enables massive standardization and automation of operational processes and offer a predictable and cost effective platform at a given SLA:



If the Hoster responsability on SLAs is very low, compliance is not as important. As hosters take more responsibility for a given SLA (and I'd argue that's one of the reasons ISV look at hosters for running their apps), compliance becomes an increasignly important cost factor and ISV will have a interesting incentive to "let go": if they don't they might not have access to the infrastructure they need.

Would you agree?  

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