In APMdigest's exclusive interview, Patrick Moran, Vice President of Marketing for New Relic, discusses APM SaaS (Software-as-a-Service), one of the hottest topics in Application Performance Management right now.

APM: Why is SaaS becoming such an important issue in APM this year?

PM: It really boils down to the era that we live in. Companies with a significant online and mobile presence are keeping up with customer demands by building new features and deploying apps faster than ever before. Their relationship with their customers is more immediate and much more interactive. These organizations find that SaaS tools like APM, Network Management, Version Control systems, project management, etc, better support their efforts because they are flexible enough to work at the same pace.

APM: What are the top advantages to using SaaS APM vs. a conventional APM tool?

PM: SaaS APM tools are implemented more quickly, easier to use, and more effective than their on-premise counterparts. Their low cost of acquisition and the short time to value quickly become an attractive proposition when you have a web or mobile project coming up that is expected to support the business by bringing hundreds of thousands of users to your app and guess what -- you have just weeks to deliver it. You can't afford to wait two months or more for price negotiations and procurement, consulting services, custom implementation, training for admins, etc. With SaaS management tools, we're talking about being up and running and seeing actionable performance data in minutes, not months.

APM: New Relic was one of the first vendors to provide a full APM SaaS solution. Why?

PM: Our founder and CEO Lew Cirne has been on both sides of this issue. He pioneered on-premise production app monitoring for enterprise Java applications. That tool quickly came to the front of the pack and became a standard implementation for monitoring mission critical apps. And just as we have described, the cost of the tools was high because they had to compensate for a very expensive sales process that involved flying people people back and forth all around the world for weeks at a time to prove the value of the product, install it and teach how to use it. Hardly a customer friendly experience. And that's what was always nagging Lew - the value they were getting out of the tool was not proportional to the cost of the software (and hardware).

So, from the very beginning, his vision and strategy was to put the customer first, provide tremendous customer value at a reasonable cost, measure customer success in real time, and iterate constantly with new features and improvements to ensure you're always meeting customer needs. Not just signing a deal, sicking the consultants on the customer and moving on to the next sale. SaaS APM then became the obvious for delivery.

APM: What is the secret to delivering an APM SaaS solution?

PM: Many traditional on-premise vendors have tried to build SaaS versions of their toolsets and they quickly and inevitably run into issues.

First of all, building a tool and an accompanying architecture/environment that operates 24x7x52, and which can handle millions of metrics a day for thousands of customers is not a walk in the park. Then you'll have to contend with your enterprise sales force. How is a SaaS version of your tool going to be sold alongside a slower, heavier, much more expensive version that has the same functionality?

To answer your question, the secret sauce in my opinion is this: build your tool from the ground up, build it for customers (all your customers, not just the ones with deep pockets), and stick to your vision.

APM: Even though more and more vendors are providing APM SaaS options, the technology is still relatively new. What major challenges are still faced with SaaS technology?

PM: It's interesting because even though many of the new APM tools are standards-compliant (PCI, SOC 2, Hippa, etc.) you still get people who have concerns about sending performance data "over the Internet"

"Do you use SFDC?" you ask them. "Yes," comes the reply. Well they seem to have zero compunction about sending their sensitive customer data over the net. What is it about sending metrics, charts, and graphs that's got them worried?

There will always be people who just cannot bring themselves to accept a SaaS implementation of any tool. As a SaaS vendor, you accept that and move on, knowing that you are likely to have a sales conversation with them again in the not-too-distant future.

APM: How will APM SaaS evolve in 2013?

PM: It's safe to say that the centrality of applications and software deployed on alternate platforms (anyone playing a game on their tablet right now?), means that SaaS APM is here to stay. But as with any tool that wishes to remain relevant, it must constantly evolve to meet the needs of customers and their end users. So, monitor multiple languages and platforms and work just as elegantly in the Cloud as you do in the physical world.

Lastly, with so much software and so many applications running just about everything in the world, and so many SaaS tools collecting mounds and mounds of data, SaaS vendors have a unique opportunity to band together to help the world make sense of it all. Yes, Big Data, but start to make sense of it with actionable analytics. Now you are taking APM and systems management to the next level for your customers, the folks who are building the software we all rely on. With the right set of metrics and analytics aggregated across all their systems, they can start measuring not just app transaction performance, but application success as it relates directly to your business.

ABOUT Patrick Moran

Patrick Moran is Vice President of Marketing for New Relic. Before New Relic, he was Chief Marketing Officer of Fuze Box, a leading SaaS provider of mobile and web collaboration solutions, where he focused on customer acquisition and product strategy. Earlier, Moran served in marketing leadership roles at various SaaS companies including social enterprise application company Mzinga, as well as Cisco, WebEx and Intranets.com. Early in his career, Moran co-founded Essential.com, a leading online communications and energy marketplace.