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BDR-0002 – SaaS vs Self-Host Model

  • Type: Business Decision
  • Status: Accepted
  • Date: 2026-01-01
  • Owner: Dmitry
  • Related Areas: Business Model / Platforms / Factory / Enterprise

This decision document defines the deployment model strategy for ConnectSoft's SaaS platforms and Factory. It is written for product managers, sales, and enterprise customers evaluating deployment options.

Decision

SaaS-first with optional self-host license for enterprise. Default to hosted SaaS for faster time-to-value, with self-host options for regulated industries and enterprises requiring data residency or compliance control.

Context

For ConnectSoft's SaaS platforms (Identity, Audit, Config, Bot) and the AI Factory itself, we need to decide on the primary deployment model and whether to offer self-hosted options.

Options considered:

  1. SaaS-only (hosted "black box")
  2. Self-hosted only (customer runs everything)
  3. Hybrid: SaaS-first with optional self-host for enterprise

Decision

SaaS-first with optional self-host license for enterprise.

For SaaS platforms (.io):

  • Default: Hosted SaaS on connectsoft.io (SaaS-only model)
  • Enterprise option: Self-host license (customer runs in their Azure subscription, code provided via license)

For AI Factory (.ai):

  • Default: Hosted SaaS (ConnectSoft runs it)
  • Enterprise option: Self-host license (customer runs in their infrastructure, VNet-isolated)

Rationale

  • SaaS-First: Faster time-to-value, easier onboarding, lower barrier to entry, scalable revenue model
  • Self-Host Option: Required for enterprise adoption (regulated industries, data residency, compliance, control)
  • Market Demand: Enterprise customers often require self-host for compliance and data residency
  • Competitive Positioning: Similar to commercial open source vendors (HashiCorp, GitLab, etc.)
  • Revenue Model: SaaS subscriptions for most customers, premium licenses + support contracts for enterprise

Consequences

Positive Consequences

  • Broad market appeal (SaaS for most, self-host for enterprise)
  • Higher revenue potential (SaaS subscriptions + enterprise licenses)
  • Competitive with other platform vendors
  • Meets enterprise compliance requirements
  • Can start simple (SaaS-only) and add self-host later

Negative Consequences / Risks

  • More complex to support (two deployment models)
  • Self-host requires packaging and deployment tooling
  • Need to maintain two code paths (though self-host can be same codebase)
  • Support complexity increases (customer infrastructure issues)

Mitigation

  • Start with SaaS-only, add self-host when enterprise demand is clear
  • Self-host uses same codebase, just different deployment model
  • Clear support boundaries (support software, not customer infrastructure)
  • Premium pricing for self-host to cover additional support complexity

Follow-up Work Required

  • Define self-host packaging (containers, Bicep templates, deployment scripts)
  • Create self-host deployment documentation
  • Define support model for self-host customers
  • Set pricing for self-host licenses
  • Create enterprise sales materials