Presented by Softletter

And Delta Channel Services

• Presenters • Merrill R. (Rick) Chapman, Managing Editor , Softletter,

www.softletter.com, rickchapman@softletter.com

• John Miller, Managing Partner, Delta Channel Services, www.deltachannels.com, johnmiller@deltachannels.com

• Warren M. Winterbottom, Managing Partner, www.deltachannels.com, warrenwinterbottom@deltachannels.com

• Introduction: Rick, Warren, and John. • Market overview and major trends: Warren and

John.

• Operational benchmarks, sales compensation, and channel analyses: Rick.

• Q&A, Rick, Mark, and John.

• In continuous publication since 1983.

• Published twice a month online with new financial metrics, analyses, and case and operations studies.

• Subscription includes complete access to hundreds of articles and benchmarks, access to over 35 SaaS University online videos, and copy of SaaS Entrepreneur and virtual DVD.

Obtain for free when you take the Softletter Software Company Staffing survey. Obtain the complete summaries when they’re ready in May. (And please leave a review of “Liver” on the review site of your choice!) Survey at: https://www.softletter.com/softletter-blog/surveys-2/

• Subscribe to Softletter as a Partner Member for $799 and obtain a free copy of the new Softletter SaaS Report, due at the end of May. A must purchase for any SaaS firm. Cost of the standalone report is $599. In addition, Partner Members also receive copies of the Softletter Sales Compensation, Financial, and Lead Generation reports. Use coupon saasweb2016sr to purchase (you will also receive the current report). This offer will be available through April 20th.

• Subscribe to Softletter as a Premium Member for $299 and obtain a free copy of the new release of our Sales Compensation and Efficiency Report. Due at the end of April, the report will be available for $299 and is must purchase for any SaaS or mobile firm with a direct or telesales group. Use coupon saasweb2016sc to purchase (you will also receive the current report). This offer will be available through April 20th.

Delta Channel Services

Founded 1995 Consultants, Data, Trainers & Recruiters

Countries Covered Delta Offices

Partners

Building your business

Current Market Share of Cloud Service providers (Source: Synergy Research Group)

Amazon 31% Microsoft 9% IBM 7% Google 4% Salesforce 4%

Infrastructure as a Service (IaaS) will triple to $50B in 2019. (Source:Gartner)

58% of companies plan to use Cloud Services up from 24% in 2014 (Source: IDC)

Cloud spending in 2015 hit $175B and is expected to top $315B by 2019. (Source: Gartner)

SaaS sales will double to $61B in 2019. (Gartner)

Mergers & acquisitions NTT Data to acquire Dell Services for $3.06 billion Micro Focus moves into DevOps space with $540 million Serena acquisition Cisco to buy cloud orchestrator CliQr for $260 million

Data centre news Google continues public cloud charge with 12 new data centres US revealed to have 46% of all data centres despite EU concerns Rackspace updates OpenStack-powered cloud server, OnMetal

Enterprise cloud deployment IBM acquires Salesforce consulting partner Intel backs software-defined-infrastructure to bolster position in hybrid cloud market Data, data, data. The importance of backing up data

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How Secure Are Your Things? How can your business face and overcome IoT security challenges? Let’s talk about it at our

next gathering

The world has gone Internet Of things (IoT) daft. But with millions of Internet-connected devices now constantly communicating with each other, and humans, it’s easy to understand why it’s such a hot topic.

The IoT market is still in its infancy, although it is growing rapidly, and we can expect an ‘explosion’ of new smart devices to appear on the

scene in the coming years. The IoT explosion is likely to bring with it a number of challenges, many of which we are probably yet to discover.

We will be introducing devices into our networks, possibly containing personal data and we will have little control over their security. There is real concern that cybercriminals will exploit IoT devices as a weak

point from which to gain access to your networks or even worse, your home or office. There have already been documented cases of home

‘security’ cameras being compromised and used by criminals to identify when your home is empty prior to a break in.

This is just the beginning. It seems apt then that IoT security be the focus of our next Tech Club and, due to popular demand, this Tech

Club will again be in ‘pub quiz’ format.

So, with prizes to be won, and like-minded IoT enthusiasts to network with, we cordially invite you join us to discuss how IoT security

challenges can be overcome.

This interactive networking event will involve drinks and nibbles in London’s Soho on April 27, from 6pm onwards.

Monday 04 April 2016

Daily News Latest news in cloud computing

IBM acquires Optevia for public sector CRM SaaS play IBM has announced the acquisition of Microsoft software as a service (SaaS) specialist Optevia, ramping up its offering for CRM SaaS

Oracle Showcases Cloud Revenue Growth In Q3 Oracle highlighted its big growth for both PaaS and SaaS offerings during the company's third quarter of its fiscal year. to position its cloud business against rivals Salesforce and Workday.

Hot Trends 1 M&A 2 Sleeping giants 3 IoT

AWS to breach $10 billion barrier through fail-fast business model April 7, 2016 Written by Jamie Davies

$170B

$149B

Your rating today Industry Average*

4.9 5.8

4.2 5.1

6.7 4.5

4.7 4.0

4.3 5.5

5.6 4.2

4.6 4.7

4.2 5.8

2.5 4.5

4.2 2.4

1 Profile your customers for SaaS

2 Benchmark winning SaaS players Strategy

3 Decide what type of SaaS Services

4 Build and test finance model

5 Redefine end to end sales process

6 Find new Ecosystem Partners

7 Review resource matrix skills

8 New Killer SaaS Value Proposition

9 Metering usage to sell more

10 Explore new and export markets

*Based on Montclare SaaS 1200 V4 2015 *Based on Delta on-line and workshop assessment 2014/2105

Critical Success Factors below average

46% Ave*

Benchmarking of companies

progress transforming business to

SaaS

70% of SaaS companies are

Hybrid models**

Most SaaS Businesses are Hybrid

Who are your new competitors? Who is in the same solution area? Who are potential clients for your SaaS

services? Who are targets for M&A? Who is targeting you? Who are the new Ecosystem Partners? Who are the hot Executives to hire?

The SaaS market is growing and changing quickly

Profiles of leading

1000 SaaS Companies

Profiles of leading

10000 SaaS Executives

Global Coverage

US

EMEA AP More data info on: www.deltachannels.com

All operating benchmarks derived from Public 10-Ks and adjusted for fudging.

Sales compensation derived from Softletter Sales Compensation Survey, 270+ participating firms, 60% participating senior management. Close early 2016.

Results managed by the MatrixCX system.

• The Softletter are 60 publicly held companies broken into seven cohorts and the “Big Four.” • Big Four are Apple, Google, Microsoft, and Oracle • SaaS Enterprise, SaaS Verticals, Sales and

Marketing, Social Platforms, Mobile B2B and B2C, and On Premise.

• Link to the complete list of 60 companies can be found here.

Operating Benchmarks

• Revenue per Employee • Sales and Marketing • Research and Development (value-

added deck • Operating Income

Revenue per Employee (RPE)

• Enables an “at a glance” look at your company’s performance.

• Consistently proves that “size” really does matter.

• Good indicator of a market segment undergoing competitive pressures.

• Measure your company’s performance vs. your competition’s.

$954,872 $198,422

$202,236

$184,370

$241,624

$200,000

$302,982

$308,388

$974,455

$184,813

$156,375

$183,557

$193,785

$200,000

$257,349

$318,975

$0 $500,000 $1,000,000 $1,500,000

Big Four

Sales & Marketing

SaaS Enterprise

SaaS Verticals

Mobile B2B

Mobile B2C

Social Networking

On Premise

RPE 2014

RPE 2015

• Facebook, with 2015 RPE of $1.2M shows power of the company. We may move the company to the “Big Five.”

• SaaS Sales and Marketing a brutal slug fest; marketing costs money; Salesforce, at $306K is a category standout.

• SaaS Verticals are also a tough market; fragmented and competitive.

• On Premise a placid, happy, no growth place to be.

Sales and Marketing (S&M)

• Publicly held companies spend more on S&M because of the pressure to perform.

• The typical medians for private companies range between 15% to 25%; for public, can reach 50%+ (profitability traded for growth).

• While 20% of S&M expenditures traditionally dedicated to “pure” marketing, SaaS and mobile companies are seeing this ratio shift in favor of marketing.

16%

55%

46%

31%

15%

20%

27%

32%

15%

51%

50%

34%

18%

21%

33%

31%

0% 20% 40% 60%

Big Four

Sales and Marketing

SaaS Enterprise

SaaS Verticals

Mobile B2B

Mobile B2C

Social Networking

On Premise

S&M 2015

S&M 2014

• Apple, with 7% in 2015, 2014, 6%. Illustrates the power of brand awareness.

• Microsoft’s 18% and 20% is high considering the company’s size and market awareness. Reflects the erosion of Windows dominance.

• Angie’s List 57% both years. Company under tremendous pressure.

Research and Development (R&D)

• Varies sharply as a company grows. Young companies can spend almost all early revenue on R&D.

• Size is an advantage, but not the same delta as other benchmarks.

• Outlier R&D expenditures often indicate a company trying to code itself out of a box.

13%

19%

21%

13%

19%

16%

28%

17%

13%

18%

24%

15%

10%

17%

34%

18%

0% 10% 20% 30% 40%

Big Four

Sales and Marketing

SaaS Enterprise

SaaS Verticals

Mobile B2B

Mobile B2C

Social Networking

On Premise

R&D 2015

R&D 2014

• Wix 50% and 37%. A hellishly competitive environment.

• Twitter 34% and 28%. Trying to code out of its market box.

• Zynga. 57% and 47%. When your plant zombies die, how do your programmers resurrect your business model?

Operating Income (OI)

• If you like the color red, this is your metric! • Negative numbers common in contested segments. • Doesn’t include investments in other companies,

taxes, or interest expense, non recurring expenses (lawsuits), etc.

• It is quite possible for a company to show positive OI and yet not be ultimately profitable (Hollywood accounting).

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40% 34%

-4%

-17% -4%

-22%

-4% -3%

16%

32%

-7%

22%

-3%

-50%

1%

-7%

18%

OI 2014

OI 2015

• The Big Four comfortably profitable. Size matters. • Sales and Marketing tough. Only Constant Contact

has positive numbers at 6% and 3%. Salesforce at-7% and -4%. The company is crawling to profitability. HubSpot at -42% and -44%; something to watch.

• SaaS Enterprise is bloody: -22%, -17%; verticals better at -3% and -4%. Verticals typically have less money to lose.

• Facebook sitting pretty in Social Networking: 40% and 36%.

• By contrast, Twitter grim at -38% and -96%. But, the good news, is Twitter can stay in business for an estimated 300+ years thanks to $2.1B IPO.

• On Premise software placid; everyone profitable, 17%. Boring can be good.

Sales Compensation

46%

22%

13%

17%

2%

Sales Force Organization

Regionally

Vertically

Named Accounting

New Business vs.Renewals

Other

78%

22%

Direct Sales Force?

Yes

No

56%

44%

Separate Sales Team for Renewals

Yes

No

9% 3%

25%

16%

22%

6%

19%

Time to Close a New Direct Sales

Under 30 days

31 to 60 days

61 to 90 days

91 to 120 days

121 to 150 days

151 to 180 days

180+ days

80%

13%

3% 3%

Primary Compensation Method

Base plus commissions

Base plus bonuses

Salary only

Comission only

Sales Plan Achievement

25%

25%

50%

Meet/Exceed Sales Plan?

Yes, exceeded sales plan

Yes, achieved plan

No, did not meet salesplan

10%

75%

2% 12%

By What % Exceeded Plan?

Less than 10%

11 to 25%

26 to 40%

41 to 55%

SaaS Channels

46%

54%

Recommender (Agent) Program?

Yes

No

27%

54%

19%

Affiliate Program?

Yes

No

Under Consideration

46%

42%

12%

VARs?

Yes

No

Under consideration

33%

33%

17%

8%

0% 8%

Number of VARs?

1 to 5

6 to 25

26 to 50

51 to 75

76 to 100

100+

2%

35%

55%

7%

2% Var Margins?

1 to 5%

6 to 15%

16 to 30%

31 to 40%

40%+

Beyond SaaS

• The rise of device independent computing. • Two elements:

• Portable workspace. • Extensive layered infrastructure for device/service

management • A computing environment cut free from any one

company’s hardware. • Over the next several months, awareness will rise

and a platform war will break out. • More info on Softletter on this major trend.

• Subscribe to Softletter as a Partner Member for $799 and obtain a free copy of the new Softletter SaaS Report, due at the end of May. A must purchase for any SaaS firm. Cost of the standalone report is $599. In addition, Partner Members also receive copies of the Softletter Sales Compensation, Financial, and Lead Generation reports. Use coupon saasweb2016sr to purchase (you will also receive the current report.) This offer will be available through April 20th.

• Subscribe to Softletter as a Premium Member for $299 and obtain a free copy of the new release of our Sales Compensation and Efficiency Report. Due at the end of April, the report will be available for $299 and is must purchase for any SaaS or mobile firm with a direct or telesales group. Use coupon saasweb2016sc to purchase (you will also receive the current report.) This offer will be available through April 20th.

• SaaS Company and Executive Contact data, Standard list covering US, EMEA and APAC for prospecting, M&A, Partnering and Hiring. Custom lists also available. For 20% discount use coupon “dcse20” to purchase This offer will be available through April 20th.

• Obtain a free SaaS Business Development Journey Assessment. Based on 20 Critical Success Factors this will benchmark your progress and compare with Industry Norms. For more detail contact John Miller in EMEA or Warren Winterbottom in the US for an exploratory discussion on how to accelerate your SaaS growth.