thinkstrategies open source presentation software 2008
DESCRIPTION
Presentation discusses the ways that SaaS companies have leveraged Open Source technology and best practices.TRANSCRIPT
©2008, THINKstrategies [www.thinkstrategies.com]Slide 1
THINKstrategies Strategic Consulting Services
Software 2008:The Convergence of Open Source & SaaS
Presented by,Jeff Kaplan
Managing DirectorTHINKstrategies
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 2
The World Is Changing
Changing Competitive Environment
Changing Workers/Work Environment
Changing Economic Climate/Pressures
Changing Technology Environment
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 3
Business Can No Longer Be A Slave To Technology
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 4©2008, THINKstrategies, Inc. www.thinkstrategies.com
Slide 4
The Shortcomings of Legacy, On-Premise Apps
Deployment Challenges• 31.1% of SW projects cancelled before completed.
• 52.7% of projects cost nearly 190% of original estimates.
• 30-50% of SW costs spent on integration.
Operational Costs• Maintenance & management costs >10x original license fee.
• Escalating hardware & staff support costs.
• Over provisioning and under-utilization of SW licenses
Economic/Budgetary Pressures• Need to reduce IT costs and increase business benefits.
• Need to increase utilization to gain greater ROI.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 5
Changing Customer Expectations
Old, Capital Investment
Complexity, Customization
Reactive Maintenance
Response Time
Customer Support
Limited Responsibility
Outsourcing Alternatives
New, Operating Expense
Simplicity, Utilization
Proactive Management
Ongoing Monitoring
Automated Delivery
Higher Accountability
Out-Tasking Options
Enterprises Seeking to Generate Greater ROI at Lower TCO.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 6
The Nicholas Carr Affect
"...Imagine what future generations will see when they
look back at the current time...won't the way corporate computing is practiced today
appear fundamentally illogical -- and inherently doomed?”
“The End of Corporate Computing” Nicholas Carr, The MIT Sloan
Management Review, Spring 2005.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 7
Converting Software Products Into Services
“A hundred years ago, companies stopped generating
their own power with steam engines and dynamos and
plugged into the newly built electric grid…Today, a similar
revolution is under way.”
- Nicholas Carr
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 8
The Shift from Outsourcing to Out-Tasking
Businesses seeking functionality, not technology.
IT outsourcing deals have failed.
Selective outsourcing, or ‘out-tasking’ gaining attention.
SaaS is a form of out-tasking.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 9©2008, THINKstrategies, Inc. www.thinkstrategies.com
Slide 9
Software-as-a-Service(SaaS) Defined
One-to-many SW distribution model delivered and managed by a vendor/service provider.
Delivered to customers via a network, typically the Internet.
Customers acquire SW on a pay-as-you-go basis.
Also referred to as “ASP”, “On-Demand”, “Hosted”, “Managed Services”, etc.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 10
SaaS Adoption Today
Source: THINKstrategies/Cutter Consortium © 2007
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 11
SaaS Deployment Plans
Source: THINKstrategies/Cutter Consortium © 2007
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 12
SaaS Expands from Business Apps to IT Management
BUSINESS APPLICATIONS
CRMSFA…
CollaborationSCM
…
ERPFinance
…
Front Office Inter OfficeBack Office
SecuritySystems Mgmt
…
Network MgmtRemote Access
…
Data ProtectionStorage
…IT Management
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 13
Shifting Adoption Patterns
Unilateral End-User, SBU Adoption of SaaS Solutions
Enterprise-Wide Acceptance and
Adoption of SaaS
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 14
SaaS Evolution
SaaS 1.0 SaaS 2.0
• Standalone apps
• Horizontal applications
• Focus on ease of use/price
• One size fits all, minimal customization
• Limited interoperability
• Emphasis on lower TCO
• Multidimensional platforms
• Vertical market solutions
• Focus on new functionality
• Flexible configurations, greater versatility
• Easier integration
• Emphasis on higher ROI
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 15
Point Solutionsvs. Platforms
Source: THINKstrategies/Cutter Consortium © 2007
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 16
Competition and Validation
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 17
On-Demand Services &The IT Industry Inversion
Services Technologies
Past
Now
TheIndustryInversion
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 18
Key Challenges Facing Established ISVs
Re-architecting applications
Recasting revenue models
Repositioning solutions
Re-orienting sales
Restructuring channels
Re-defining support
Reducing operating costs
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 19
Implications of Inversion
R&D focus on service delivery methodologies rather than product features.
Marketing focus on packaging and pricing services/solutions, not technology/products.
Sales focus on selling economic business value not product features.
Customer support focus on provisioning, billing and automated, remote management.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 20
Multiple Layers to the Integration Challenge
On-Premise
Presentation
Middleware
Static Data Sources
Operating Systems
On-Demand
User Interface
APIs
Dynamic Sources
Web Services
And, across multiple SaaS platforms and services.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 21
Living in a Hybrid World
Most enterprises will seek mix of on-premise & on-demand solutions.
‘Applets’, Appliances, etc. will permit on-demand/on-premise integration.
Adobe AIR, Microsoft Silverlight
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 22
Cash Difference:SaaS vs. Perpetual Models
Cumulative Cash Burn
-30,000,000
-20,000,000
-10,000,000
0
10,000,000
20,000,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
SaaS Perpetual
Monthly payments instead of up-front license fees increase the capital required to build a software company by 50% to 100%Monthly payments instead of up-front license fees increase the capital required to build a software company by 50% to 100%
$ M
illio
ns
Source: SaaS Capital
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 23
Channel/Supply Chain Opportunities
Legacy ISVs
New SaaSProviders
EnablingTechnologyVendors
• Offshore SW Developers• 3rd party SW platforms• 3rd party HW systems
xSPs
• Hosting companies• Carriers
Channel Partners
• Distributors• VARs/Integrators• eCommerce Sites
Corporate Customers
Consumers
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 24
New Channelsto Market?
Financial Services
Insurance Companies
Retailers
Web companies
Professional Service Firms
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 25
SaaS Ecosystems – The New Channel
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 26
What SaaS Vendors Have Learned from Open
Source
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 27
SaaS Building Blocks
Broadband Networks
Grid Computing
Blade Technology
Virtualization
Web Services & SOA
Service Provisioning
Community Building/Tool Sharing
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 28
Open Source Principles
Low cost development tools/ infrastructure
Agile development techniques Integrity of the masses Tiered packaging/pricing Value-added support Community-based best practices
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 29
The Cornerstones of SaaS
Communications Community
Collaboration
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 30
The Value-Addof SaaS Communities
Real-time, aggregated data
Meaningful benchmark studies
Practical best practices forums
Continuous updates, new ideas
Dynamic toolkit clearinghouse
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 31
Conclusions:SaaS & Open Source
Gaining broad-based acceptance.
Customers demanding greater functionality and flexibility.
Market attracting more players and competition is driving down prices.
SaaS providers must reduce costs and create new value.
Open source world creating new tools, techniques, best practices and opportunities.
©2008, THINKstrategies, Inc. www.thinkstrategies.comSlide 32
For More Information…
www.SaaS-Showplace.comwww.thinkstrategies.com