State of the SaaS Industry – by Jeff Kaplan from THINKstrategies

The State of SaaS and the Business Implications for ISVs Presented by, Jeff Kaplan Managing Director THINKstrategies [email_address] 781-431-2690

Company Mission
Help clients capitalize on the shift in the tech industry from product-centric to a services-driven market,
IT solution providers re-THINK their go-to-market strategies;
IT and business executives re-THINK their sourcing strategies; and
Investors re-THINK their investment strategies.

Primary Drivers of SaaS
Changing economic conditions
Changing competitive forces
Changing ecological concerns
Changing workplace requirements
Changing technologies
Changing priorities & sourcing policies

Deployment Challenges
31.1% of 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 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.
The Shortcomings of Legacy, On-Premise Apps

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.

On-Demand Has Become Mainstream

Networked applications
Multi-user, anywhere/
anytime access
Enhanced user experience
Subscription pricing
Real-time analytics
Continuous enhancements
Self-provisioned services & toolkits
Aggregated data & benchmarks
Defining SaaS

SaaS Adoption Has Doubled In 12 Months Source: THINKstrategies/Cutter Consortium, 2008

SaaS Satisfaction Levels Source: THINKstrategies/Cutter Consortium, 2008

Customers Willing to Renew, Expand & Recommend SaaS Source: THINKstrategies/Cutter Consortium, 2008

Key Customer Concerns & SaaS Industry Responses
Concerns ,
Reliability
Security
Customization
Compliance
Integration
Customer Support
Responses ,
SLAs
Certifications
User Configurations
DR/BC
Connectors
Online/Pro Services

Shifting Adoption Patterns Unilateral End-User, SBU Adoption of SaaS Solutions Enterprise-Wide Acceptance and Adoption of SaaS

The Role of SaaS in SMBs and Enterprises
Small = Fill Unmet Needs
Mid-Size = Fill Unmet Needs/Replace
Enterprise = Augment/Extend Capabilities

Size of SaaS Deployments Growing

SaaS Expands from Business Apps to IT Management BUSINESS APPLICATIONS CRM SFA … Collaboration SCM … ERP Finance … Front Office Inter Office Back Office Security Systems Mgmt … Network Mgmt Remote Access … Data Protection Storage … IT Management

Why IT Wants SaaS
Most IT organizations spend 75-80% of their time reacting to problems, keeping systems and software up and running. They would prefer to focus on more strategic business initiatives.

Moving from SaaS Apps to Cloud Computing Cloud Computing Services SaaS Apps

Changing Competitive Landscape & & & AimNet Solutions ever dream

On-Demand Services & The IT Industry Inversion Services Technologies Past Future The IT Industry Inversion

Key Challenges Facing Established ISVs
Re-architecting applications
Re-structuring revenue models
Repositioning marketing
Re-orienting sales/support staff
Reducing operating costs

SaaS Lifecycle Requirements User Centricity Agile Development Transaction Mgmt System Security Certifications Service Orientation Professional Services Online Procurement Try & Buy Trials Tele-Sales Web/Search Marketing Service Delivery Infrastructure Ecosystem of Partners Web Support SLAs

New Channels to Market?
Banks
Insurance Companies
Retailers
Web companies
PS Firms

Market Evolution Software Services Business Services Information Services

Key Characteristics of a Winning SaaS Team
CEO – Visionary, but disciplined
CFO – Disciplined, and flexible
CMO – Thought-leader, but focused
CTO – Knowledgeable, yet practical
VP, Sales – Persistent, and creative
Product Development – Agile, and service-oriented
Sales – Service-oriented, not product-centric
Support – Business-oriented, not technical

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State of the SaaS Industry – by Jeff Kaplan from THINKstrategies

by Progress Software on Feb 24, 2009

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State of the SaaS Industry – by Jeff Kaplan from THINKstrategies — Presentation Transcript