Think You're Ready for SaaS? Think Again! - 9 Common SaaS Misconceptions to Avoid

Originally presented at SoftwareCEO Software University 11/12/2009

Think you're ready for SaaS?
Think again!
http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved

For the record... I’m a big fan of SaaS

Many more beneﬁts to
All of the known end- the SaaS vendor & end
user reasons user due to Network
Effect

Allows end-users to Business Scalability for
focus on business both the vendor & the
problems not tech client


Why does it matter if you know what SaaS is?

Revenue Modeling,
SaaS vendors take on
Generation, and
all of the burden for
Recognition are more
their clients
complex

One code-base serves
All aspects of SaaS
multiple markets
differ from Legacy
without modiﬁcation
Software; sales,
& with an in-built
software dev, etc.
revenue model


If you think SaaS is...

1. Just another software delivery model
2. A way to deliver cheap software
3. A market
4. Another name for subscription pricing
5. Anything in “the cloud”
6. An easy sale: If you build it, will they come?
7. Just another version of your software
8. Right for your ﬁrm since everyone else is doing it
9. A ticket to easy success w/ the right checklist


If you think that SaaS is any of those 9 items...


There is a really good chance you will...

*
FAIL!

* A bad thing; lets try to avoid that


SaaS is not... just another software delivery model

Single-Instance,
Web-Native
Multi-Tenant

About Rules, Unique Business
not Exceptions Architecture


Legacy Software Business Structure

Intellectual
Marketing
Property

Revenue
Technology
Model

Loosely-coupled, at best

SaaS Business Architecture

Intellectual
Marketing
Property

Network
Centricity

Technology Revenue Model

All aspects are tightly coupled

SaaS is not... a way to deliver cheap software

SaaS has the potential
SaaS doesn’t have to
to provide more
be “Software-Lite”
value than on-prem

Vendor takes on Maybe SaaS should
burden of infra, cost more than
governance, Legacy Software due
compliance, etc. to value-add


SaaS is not... a market

The market is the
SaaS is a Business vertical, industry, etc.
Architecture who will buy your
offering

Don’t model your Competitors, SaaS or
product, pricing, etc. not, drive market
after other SaaS expectations.
offerings outside of Are you in a position
your market to challenge those?


SaaS is not... another name for subscription pricing

SaaS is not another Subscriptions are only
name for subscription 1 of 7 Revenue
pricing Streams

Even within
Subscriptions there Key is to be aligned
are many options: with your market
Metric/Timeframe


SaaS Revenue Modeling

Intellectual Products
Marketing
Property Subscriptions Ecosystem

Network Network
Centricity Effect
Services Advertising
Revenue
Technology
Model Ancillary

Revenue Model consists of Revenue Streams

Revenue Model is not Pricing Strategy

Revenue Pricing
separate
Model Strategy

Revenue Model + Vertically Aligned Pricing = Agility


SaaS is not... anything in the cloud

Single-instance Web
Just because its on the Apps, ASP, Cloud
web doesn’t make it servers, private
SaaS clouds, etc. are not
SaaS

PaaS, IaaS, API-based
systems probably
SaaS is UI Agnostic
meet deﬁnition of
SaaS


SaaS is not... an easy sale; if you build it, will they come?

Are there channels?
Some companies,
Know your market industries, regions,
etc. only buy through
3rd parties. Period.

The sales department On-boarding,
is not obsolete no implementation,
matter how much you integration & change
want that to be the management are still
case real issues


SaaS is not... just another version of your software

Hybrid is hard! So
much more than Organization issues,
managing “two technology problems,
branches of source etc.
code”

One-off versions
break the SaaS model Customization is the
& its eliminate many death nell of a SaaS
of the beneﬁts to both vendor
the vendor & client


SaaS is not... the right move since everybody else is doing it

Is your organization
Is your market ready?
ready?

Internal structural,
Market culture, laws/
cultural, & ﬁnancial
governance, and
challenges can kill a
mindset must be
SaaS business before it
aligned
starts


SaaS is not... a ticket to easy success with the right checklists

Might be good at 60k There is no silver
foot level bullet

Blanket statements
about different
Every company &
businesses in different
market is different
markets are usually
not valid


Get the detailed guide to the
7 SaaS Revenue Streams with examples:

http://saasrevenue.com/7streams.html

If this is a SaaS Revenue Model emergency
put down the mouse and call us:

(972) 200-9317

http://saasrevenue.com

Think You're Ready for SaaS? Think Again! - 9 Common SaaS Misconceptions to Avoid

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