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How SaaS is Changing Technology




2006 SaaS Summit
Treb Ryan
The Enterprise Moves to “On-Demand”
Consumption
                 Old                  New
                 Model          ...
Software as a Service
Characteristics                        Benefits
Network delivered access to            No local infr...
Customers Buy Much Less with SaaS
Items to Purchase with              Items to Purchase with SaaS
Enterprise Software
• So...
3 Huge Impacts to Infrastructure Vendors

• New Customer
• New Technologies
• New Revenue Model
Traditional Sales

                    • Hardware,
                      Software and
                      Services Vendo...
SaaS Sales

             • Infrastructure
               Companies
               (Hardware,
               Software and
 ...
Infrastructure will evolve to On-Demand

                      • Repackaging
                        enterprise products n...
Properties of SaaS Technologies

• Will have to be priced based on usage
• Will need to be able to leverage multiple
  Saa...
Changes in IT Spend

•   Currently most 80% of IT
    Spend is on Hardware and
                                     Worldw...
SaaS Companies Much Different

•   When an Enterprise Buys
    SaaS most revenue goes to
                                 ...
The Shift Has Already Happened

•   Consumer Tech is already     •   First Generation SaaS
    there                      ...
What Does It all Mean

• Infrastructure Companies (Hardware, Software and
  Services) will need to retool their offerings ...
OpSource, Inc.




Success Based Delivery
of Software as a Service (SaaS)
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Transcript of "How SaaS is Changing Technology"

  1. 1. How SaaS is Changing Technology 2006 SaaS Summit Treb Ryan
  2. 2. The Enterprise Moves to “On-Demand” Consumption Old New Model Model Service •In house platform •On-Demand Delivery Model •Labor intensive •Technology Driven Architecture •Monolithic •Integrated •Client-Server • Services Orientated • “Money-Pit” Architecture • Legacy •Standardized • Non Standard Payment •Pay In Advance •Pay As Consumed •High CapEx
  3. 3. Software as a Service Characteristics Benefits Network delivered access to No local infrastructure or commercially available software software to purchase or maintain Applications & data are available anywhere with network connectivity Application delivery is one-to-many Operating costs are reduced by model managing infrastructure in central locations rather than at each customer’s site Built on optimized & robust platform Improved availability and reliability Customer pays for as much as they Lower TCO need when they need it
  4. 4. Customers Buy Much Less with SaaS Items to Purchase with Items to Purchase with SaaS Enterprise Software • Software • Laptops and Desktops • Hosting and Networking • Software – Internet Connection – Internal Networks – Network Administrators • Servers • Laptops –Systems Administrators –Systems Management Soft. –Applications MiddleWare • Internet Connection • Database Software – Disk Arrays for DB – Backup Software – Tape Drives – OffSite Storage – DBA’s • Security – IDS Software – Security Experts • Application Management Experts • End User Help Desk – Follow the Sun Support
  5. 5. 3 Huge Impacts to Infrastructure Vendors • New Customer • New Technologies • New Revenue Model
  6. 6. Traditional Sales • Hardware, Software and Services Vendors all have enterprise as customer • Both sell up-front capital intensive solutions to Enterprise
  7. 7. SaaS Sales • Infrastructure Companies (Hardware, Software and Services) Sell to SaaS Vendor • SaaS Vendor Sells to customer
  8. 8. Infrastructure will evolve to On-Demand • Repackaging enterprise products not enough • SaaS companies are selling on-demand • Infrastructure companies who sell to SaaS companies will have to sell on demand
  9. 9. Properties of SaaS Technologies • Will have to be priced based on usage • Will need to be able to leverage multiple SaaS offerings • Open Standards Based Technologies • Uptime will be key – Reliability – Disaster Recovery – Security
  10. 10. Changes in IT Spend • Currently most 80% of IT Spend is on Hardware and Worldwide IT Software Spending • IT is focused on Information “TECHNOLOGY” 39% 41% 20% Services Software Hardware
  11. 11. SaaS Companies Much Different • When an Enterprise Buys SaaS most revenue goes to SaaS Margins SaaS company 20% • SaaS COGS represents amount going to infrastructure hardware, software and head count • IS is now focused on Information “MANAGEMENT” 80% Margin COGS
  12. 12. The Shift Has Already Happened • Consumer Tech is already • First Generation SaaS there Companies are leading the • Look who is capturing a way for enterprise spend large portion new consumer • These companies capturing technology spend up to 90% margins
  13. 13. What Does It all Mean • Infrastructure Companies (Hardware, Software and Services) will need to retool their offerings to serve the SaaS vendor and the On-Demand Model • SaaS Vendors will take a much higher proportion of the technology spend than traditional Software Vendors • In the end, the companies that provide the most value to either the end user or the SaaS company who supplies the end user will emerge the victors
  14. 14. OpSource, Inc. Success Based Delivery of Software as a Service (SaaS)
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