webinar1 of 3 in a series: best practices to help you succeed in the rapidly changing saas...

Making the Most (Money) with Your SaaS Offering

Webinar Series

Webinar # 1

Best Practices to Help You Succeed in the Rapidly Changing SaaS Marketplace

Best Practices to Help You Succeed in the

Rapidly Changing SaaS Marketplace

Jeff Kaplan

Managing Director

THINKstrategies

Bashyam Anant

Director, Product Management

Flexera Software

THINKstrategies Strategic Consulting Services

How to Succeed and Thrive in the Rapidly Changing SaaS

Marketplace – Best Practices

Presented by,

Jeff Kaplan

Managing Director

THINKstrategies

jkaplan@thinkstrategies.com

781-431-2690

Today‟s Perfect StormDriving the „Cloud‟

Macro-MarketChallenges

EnablingTechnologies

ShiftingCustomer Attitudes

Deployment Challenges

• 31.1% SW projects cancelled before completed.

• 52.7% of projects cost nearly 190% of original estimates.

Operational Costs

• Maintenance & management costs >10x original license fee.

• Escalating hardware & staff support costs.

• Over provisioning/under-utilization of SW licenses.

Economic/Budgetary Pressures

• Need to reduce IT costs, increase business benefits.

• Need to increase utilization to gain greater ROI.

The Shortcomings of Legacy, On-Premise Apps

Consumerization, Shadow IT and the Mobile End-User

Changing Customer Needs/Expectations

Fixed, Capital Investment

Complexity, Customization

Centralized, On-Premise

Top-Down Procurement

High TCO, Low ROI

Internal Support

Outsourcing Alternatives

Flexible, Operating Expense

Simplicity, Utilization

Mobile, On-Demand

Bottom-Up Adoption

Rapid Time-to-Value

3rd Party Services

Out-Tasking Options

SaaS Expands from Front- to Back- to Inter-Office Apps

BUSINESS APPLICATIONS

Finance

Front Office Inter-EnterpriseBack Office

Collaboration

CRM/SFA

Procurement

Supply-Chain

SaaS Expands from Business Apps to IT Management

Collaboration

CRM/SFA

Procurement

Supply-Chain

Finance

Security

Systems Mgmt

Network Mgmt

Remote Access

Data Protection

Storage

IT Management

SaaS Expands from Business Apps to Industry Solutions

Collaboration

CRM/SFA

Procurement

Supply-Chain

Finance

Financial Services

Retail

Manufacturing

Vertical Market/Industry-Specific Solutions

Shifting Adoption Patterns

Ad-hoc, Business End-

User/SBU Adoption;

IT Avoided.

Planned Enterprise-Wide,

Business-Driven Adoption;

IT Involved.

Recent Mega-Deals:SaaS/Cloud Policy Moves

= 500,000 suppliers

= 420,000 end-users

“We evaluated a number of alternatives, but Aravo SIM was the best commercially-available solution capable of meeting our complex, global needs” - SVP and CIO of GE

"The Enterprise Cloud Computing business model is a strategic direction for us. It not only lowers IT costs, and creates faster end to end processes, but

can also grow with our requirements both globally and locally.“

- Head of Corporate IT, Siemens AG

U.S. Government View

“I’m all about the cloud computing notion. I look at my lifestyle, and I want access to information wherever I am. I am killing

projects that don’t investigate SaaS first.”

President Obama’s CIO, Vivek Kundra, WSJ 3/9/09

Moving from SaaS Apps to Cloud Computing

Cloud Computing Services

SaaS Apps

“Top Strategic Technology for

2010”

But what does “cloud computing”

Public Private Hybrid Community

Deployment

Models

Service

ModelsSoftware as a

Service (SaaS)

Platform as a

Service (PaaS)

Infrastructure as

a Service (IaaS)

Essential

CharacteristicsOn-Demand

Self Service

Broad Network

AccessResource Pooling

Rapid ElasticityMeasured Service

Visual Model of NIST’s Cloud

Computing Working Definition

http://www.csrc.nist.gov/groups/SNS/cloud-computing/index.html

Evolution OfCustomer Concerns

Reliability

Security/Privacy

Interoperability/Integration

Governance/Compliance/Control

Innovation/Competitive Advantage

Support

Living in a Hybrid World

Companies prefer choice.

Businesses seeking combination of on-demand/on-premise solutions.

Variety of appliances and applets becoming available.

Cross-platform integration possible.

Cloud location-independencebecoming bi-directional.

A New Level of Valuein the SaaS/Cloud Market

Dynamic toolkit clearinghouse

Continuous updates, new ideas

Real-time, aggregated data

Meaningful benchmark studies

Practical best practices forums

User “Club” w/special privileges.

SaaS Can RedefineYour Business

SoftwareServices

BusinessServices

InformationServices

Vendor Evolution

SaaS, Cloud Computing &the IT Industry Inversion

Services Technologies

Future

TheIndustryInversion

Biggest ISV Fears:The Four C‟s

Cannibalization

Corporate Disruption

Customer Confusion

Channel Conflict

More SaaS Economics

Monthly payments instead of up-front license fees increase the capital required.Source: SaaS Capital

Cumulative Cash Burn

-30,000,000

-20,000,000

-10,000,000

10,000,000

20,000,000

SaaS Perpetual

Key Development/DeliveryLifecycle Requirements

User Centricity

Agile Development

Transaction Mgmt System

Security

Certifications

Service Orientation/

ServiceabilityProf.Svs./Consulting

Online Chat/Twitter

‘Try & Buy’ Trials

Virtual Support

Web/Search Marketing

Service Delivery Infrastructure

Ecosystem of Partners

Peer-to-Peer Forums

Succeeding at SaaS

Create simple solutions.

Encourage customer input.

Develop frictionless processes.

Build monetization engine.

Target business inefficiencies.

Land & Expand

Summary:The State of the Market

v1.0 v2.0

• Focus on individual user

• Standalone point apps

• Horizontal applications

• Emphasis on ease of use/price/TCO

• One size fits all, limited customization

capabilities

• Limited interoperability

• Cloud only, single direction

• Proliferation of providers

• Emphasis on solution

• Best-of-Breed Win

• Focus on the enterprise

• Scalable, secure platforms

• Vertical/industry solutions

• Emphasis on added functionality/ROI

• Multiple configurations, greater

flexibility/versatility

• Greater integration capabilities

• Bi-direction location independence

• Industry shake-out & consolidation

• Emphasis on support

• Strategic Sources Win

Making the Most (Money) with Your SaaS

Offering Webinar Series

Webinar #2:

How Pricing and Licensing Can Help You Monetize a SaaS Offering

Webinar #3:

Subscription and Entitlement Management Best Practices for Your SaaS Offerings

Best Practices to Help You Succeed in the

Rapidly Changing SaaS Marketplace

Jeff Kaplan

Managing Director

THINKstrategies

jkaplan@thinkstrategies.com

Bashyam Anant

Director, Product Management

Flexera Software

banant@flexerasoftware.com

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