Webinar1 of 3 in a series: Best Practices to Help You Succeed in the Rapidly Changing SaaS Marketplace

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 Bashyam Anant
Managing Director Director, Product Management
THINKstrategies Flexera Software

© 2011 Flexera Software, Inc. | Company Confidential 2

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

©2011, THINKstrategies [www.thinkstrategies.com]
Slide 3

Today‟s Perfect Storm
Driving the „Cloud‟

Macro-Market
Challenges

Enabling Shifting
Technologies Customer Attitudes
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 4

The Shortcomings of
Legacy, On-Premise Apps

 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.

Slide 5

Consumerization, Shadow
IT and the Mobile End-User

Slide 6

Changing Customer
Needs/Expectations

Old, New,
 Fixed, Capital Investment  Flexible, Operating Expense

 Complexity, Customization  Simplicity, Utilization

 Centralized, On-Premise  Mobile, On-Demand

 Top-Down Procurement  Bottom-Up Adoption

 High TCO, Low ROI  Rapid Time-to-Value

 Internal Support  3rd Party Services

 Outsourcing Alternatives  Out-Tasking Options
Slide 7

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

ERP Collaboration Procurement
Finance CRM/SFA Supply-Chain
… … …
BUSINESS APPLICATIONS

Slide 8

SaaS Expands from Business
Apps to IT Management

… … …

Data Protection Security Network Mgmt
Storage Systems Mgmt Remote Access
… … …
IT Management
Slide 9

SaaS Expands from Business
Apps to Industry Solutions

… … …

Manufacturing Financial Services Retail
… … …

Vertical Market/Industry-Specific Solutions
Slide 10

Shifting Adoption Patterns

Ad-hoc, Business End- Planned Enterprise-Wide,
User/SBU Adoption; Business-Driven Adoption;
IT Avoided. IT Involved.
Slide 11

Recent Mega-Deals:
SaaS/Cloud Policy Moves

= 500,000 suppliers

“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

= 420,000 end-users

"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
Slide 12

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

Slide 13

Moving from SaaS Apps to
Cloud Computing

Cloud Computing
“Top Strategic
Technology for
Services
2010”

But what
does “cloud
SaaS Apps computing”
mean?
Slide 14

Visual Model of NIST’s Cloud
Computing Working Definition

Measured Service Rapid Elasticity
Essential
Characteristics
On-Demand Broad Network
Resource Pooling
Self Service Access

Service Software as a Platform as a Infrastructure as
Models Service (SaaS) Service (PaaS) a Service (IaaS)

Deployment
Models Public Private Hybrid Community

http://www.csrc.nist.gov/groups/SNS/cloud-computing/index.html
Slide 15

Evolution Of
Customer Concerns

Support

Innovation/Competitive Advantage
Complexity

Governance/Compliance/Control

Interoperability/Integration

Security/Privacy

Reliability

Time
Slide 16

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-independence
becoming bi-directional.

Slide 17

A New Level of Value
in 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.
Slide 18

SaaS Can Redefine
Your Business

Software Business Information
Services Services Services

Vendor Evolution

Slide 19

SaaS, Cloud Computing &
the IT Industry Inversion

Future

The
Services Industry Technologies
Inversion

Past
Slide 20

Biggest ISV Fears:
The Four C‟s

 Cannibalization

 Corporate Disruption

 Customer Confusion

 Channel Conflict
Slide 21

More SaaS Economics
Cumulative Cash Burn

20,000,000

10,000,000

0
Year Year Year Year Year Year Year Year Year
1 2 3 4 5 6 7 8 9
-10,000,000

-20,000,000

-30,000,000

SaaS Perpetual

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

Slide 22

Key Development/Delivery
Lifecycle Requirements
User Centricity
Ecosystem of Partners Service Orientation/
Serviceability
Prof.Svs./Consulting
Agile Development
Peer-to-Peer Forums
Online Chat/ Service Delivery
Twitter Infrastructure

Security
Virtual Support
Certifications
‘Try & Buy’ Trials
SLAs

Web/Search Marketing Transaction Mgmt System
Slide 23

Succeeding at SaaS

Land & Build monetization engine.

Expand Develop frictionless processes.

Encourage customer input.

Create simple solutions.

Target business inefficiencies.

Slide 24

Summary:
The State of the Market

v1.0 v2.0
• Focus on individual user • Focus on the enterprise
• Standalone point apps • Scalable, secure platforms
• Horizontal applications • Vertical/industry solutions
• Emphasis on ease of use/price/TCO • Emphasis on added functionality/ROI
• One size fits all, limited customization • Multiple configurations, greater
capabilities flexibility/versatility
• Limited interoperability • Greater integration capabilities
• Cloud only, single direction • Bi-direction location independence
• Proliferation of providers • Industry shake-out & consolidation
• Emphasis on solution • Emphasis on support
• Best-of-Breed Win • Strategic Sources Win
Slide 25

Q&A


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 Bashyam Anant
Managing Director Director, Product Management
THINKstrategies Flexera Software

jkaplan@thinkstrategies.com banant@flexerasoftware.com


Webinar1 of 3 in a series: Best Practices to Help You Succeed in the Rapidly Changing SaaS Marketplace

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Webinar1 of 3 in a series: Best Practices to Help You Succeed in the Rapidly Changing SaaS Marketplace