Making the SaaS Decision: The Threats, Opportunities, and ...

2,762 views
2,520 views

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,762
On SlideShare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
64
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Making the SaaS Decision: The Threats, Opportunities, and ...

  1. 1. Making the SaaS Decision: The Threats, Opportunities, and Challenges of Moving to SaaS Jeff Hagins, CTO and Founding Partner, Mural Ventures Corporation © 2008 Mural Consulting Corporation, All Rights Reserved
  2. 2. Three Years Ago … • Limited SaaS Competition for Most Traditional Software Vendors. Many startup SaaS businesses focus on SMB first • No real distribution channels for SaaS – Direct to the customer • Infrastructure and Hosting Options driving higher up-front capital/operational costs for SaaS vendors • Shrinking IT budgets, but SaaS market growing and taking additional market share 2 © 2008 Mural Consulting Corporation, All Rights Reserved
  3. 3. Today • Significant Competitive Threats from Pure-Play SaaS Providers in virtually every market/vertical from small business to enterprise • Emerging Channels for the Distribution of SaaS offerings (e.g. SF.com AppExchange) • SaaS Version 2.0 Business Launching using Cloud Computing Infrastructure which significant lowers their COGS • Financial Market Impacts: Capital and Operational Budgets will be constrained – SaaS Alternatives with NO commitments will be attractive to CIOs 3 © 2008 Mural Consulting Corporation, All Rights Reserved
  4. 4. Why is Now the Right Time for SaaS? Pervasive broadband access for SMBs and Consumers Economic models are in sync – tight IT budgets are driving demand for more economically efficient solutions CIOs need to deliver strategic, mission-critical value, SaaS and will outsource other functions to allow a more strategic internal focus Improved security and acceptance of secure data centers by customers Now is the right time. Greater Depth and Breadth of SaaS offerings, including greater alignment with customer needs (e.g. SMBs need lighter-weight applications than Large Enterprise) Emergence of Platforms for developing SaaS applications • SalesForce.com, Mor.ph, Amazon Web Services • Microsoft CRM 4.0, Google AppEngine 4 © 2008 Mural Consulting Corporation, All Rights Reserved
  5. 5. The SaaS Opportunity 31% Growth 61% Growth 25% Penetration (CAGR) for in Enterprise Adoption of $220 Billion On-Demand CRM Software Industry by 2011 61% $2 Billion 25% 2004 2010 5 © 2008 Mural Consulting Corporation, All Rights Reserved
  6. 6. The Long Tail© of the SaaS Market Your Large Customers What if you lower your cost of sale (i.e. lower barrier to entry) and you also lower cost of operations $ / Customer Your Typical Customers (Currently) “Non Addressable” Customers Addressable” Newly Addressable Market Copyright © Anderson, Chris The Long Tail: Why the Future of Business Is Selling Less of More | Hyperion Books 2006 6 © 2008 Mural Consulting Corporation, All Rights Reserved
  7. 7. Examples of the “Long Tail” 7 © 2008 Mural Consulting Corporation, All Rights Reserved
  8. 8. Software-as-a-Service Defined Software Delivery Models Traditional Software Software-as-a-Service (SaaS) On Premise On-Demand Software Service CAPEX+OPEX OPEX (Subscription or Usage-Based) Software-as-a-Service Models Hosting of Traditional Applications Net-Native Software-as-Services License + Subscription Subscription Single-Tenant Multi-Tenant Dedicated Infrastructure Shared Infrastructure 8 © 2008 Mural Consulting Corporation, All Rights Reserved
  9. 9. Software-as-a-Service is … • SaaS is a new way to deliver and consume software over the Internet • SaaS is a new pricing/financial model for the payment of software • SaaS does compress the supply chain for software and eliminates IT responsibilities for the end-customer • But … The MOST important thing to understand about SaaS is that it is … 9 © 2008 Mural Consulting Corporation, All Rights Reserved
  10. 10. Software-as-a-Service is … BEHAVIORAL 10 © 2008 Mural Consulting Corporation, All Rights Reserved
  11. 11. Buyer Behavior Segmentation Business-Centric Buyer Best Opportunity Buyers for Web-Agnostic Buyer Web-Centric Buyer SaaS Best Opportunity Buyers for SaaS Technology/Feature-Centric Buyer 11 © 2008 Mural Consulting Corporation, All Rights Reserved
  12. 12. We are are TOO OLD to Really Get IT 12 © 2008 Mural Consulting Corporation, All Rights Reserved
  13. 13. The Decision New Customers Offerings Offerings Existing New Existing Customers 13 © 2008 Mural Consulting Corporation, All Rights Reserved
  14. 14. The Threats New Customers Offerings Offerings Existing New Existing Customers 14 © 2008 Mural Consulting Corporation, All Rights Reserved
  15. 15. The Risks New Customers Offerings Offerings Existing New Existing Customers 15 © 2008 Mural Consulting Corporation, All Rights Reserved
  16. 16. The SaaS Challenge ! !? ! ? !? ? ISVs The road to SaaS is fraught with challenges. ISVs are faced with new business and market dynamics as well as “black box” factors that cloud their path. 16 © 2008 Mural Consulting Corporation, All Rights Reserved
  17. 17. SaaS SWOT Analysis from ISV perspective S W - Domain knowledge - Web-Centric Sales & Marketing - Customer Relationship - Web 2.0 Usability/User Experience - Customer Understanding - Infrastructure & Operations - Existing Applications and - Web 2.0 Customer Service Solutions - Internet-scalable Applications - Service Level Management O T - Incremental Revenue Opportunity in - Pure-Play SaaS Competitors New Market Segments - Traditional Competitors with SaaS - Annuity-like Recurring Revenue offerings - Higher Total Revenue Opportunity - Traditional Competitor acquisition of - Alignment with economic climate SaaS Startup in Your Market 17 © 2008 Mural Consulting Corporation, All Rights Reserved
  18. 18. 5 Key Process Areas… Business Technology Operations Based on over 300 engagements with service providers and ISVs, Mural has developed 40 SaaS Key Success Factors™ that form a basis Copyright © 2008 | Mural improvement across 5 Key Process Areas. for continuous Consulting, LLC18 © 2008 Mural Consulting Corporation, All Rights Reserved – A Division of Mural Ventures
  19. 19. Technology, and, … Technical Track Organizational Effectiveness User Accessibility Tenancy Model End-User Performance Environment Model Reliability & Availability Identification & Authorization Computing Platform Ordering, Provisioning & Billing Storage Management Performance, Scalability & Resource Mgmt Security Reliability & Supportability Database & Integration Management Service Customization & Integration Facilities Based on over 300 engagements with service providers and ISVs, Mural has developed 40 SaaS Key Success Factors™ that form a basis Copyright © 2008 | Mural improvement across 5 Key Process Areas. for continuous Consulting, LLC19 © 2008 Mural Consulting Corporation, All Rights Reserved – A Division of Mural Ventures
  20. 20. Operations … Operations Track Self Management/Support Product/Support Integration Service Responsiveness & Visibility Help Desk/Problem Management Configuration/Change Management Capacity & Cost Management SLA & Business Continuity Management Organizational Effectiveness Based on over 300 engagements with service providers and ISVs, Mural has developed 40 SaaS Key Success Factors™ that form a basis Copyright © 2008 | Mural improvement across 5 Key Process Areas. for continuous Consulting, LLC20 © 2008 Mural Consulting Corporation, All Rights Reserved – A Division of Mural Ventures
  21. 21. Organized into different Tracks for Business … Business Track Business Planning & Budgeting Organizational Effectiveness Financial Modeling Persona-Driven Offerings Financial Analysis & Reporting Competitive Differentiation Talent Recruitment & Management Messaging & Positioning Employee Performance Management Demand Generation Business Process Management Sales Process Org. Structure & Responsibilities Customer Service & Support Decision-Making Authority & Accountability Web-Centric Customer Experience Based on over 300 engagements with service providers and ISVs, Mural has developed 40 SaaS Key Success Factors™ that form a basis Copyright © 2008 | Mural improvement across 5 Key Process Areas. for continuous Consulting, LLC21 © 2008 Mural Consulting Corporation, All Rights Reserved – A Division of Mural Ventures
  22. 22. Which Factors Impact the User Experience? 22 © 2008 Mural Consulting Corporation, All Rights Reserved
  23. 23. Continuous Improvement Methodology Business Technology Operations Sales & Marketing Application and Hosting Operations & Support Focused Architecture Focused Focused The continuous shift towards the web, from both a user and a technology perspective means that continuous assessment, planning, and 23 Copyright © 2008 | Mural Consulting, LLC “best practices” across all disciplines improvement is required to maintain 23 23 © 2008 Mural Consulting Corporation, All Rights Reserved – A Division of Mural Ventures
  24. 24. Why Do You Need to Act Now? 24 © 2008 Mural Consulting Corporation, All Rights Reserved
  25. 25. Why Do You Need to Act Now? 25 © 2008 Mural Consulting Corporation, All Rights Reserved
  26. 26. Buyer Behavior is Polarizing Business-Centric Buyer Web-Agnostic Buyer Web-Centric Buyer Buyers who Buyers who are primarily are primarily interested in interested in On-Premise SaaS Software Technology/Feature-Centric Buyer 26 © 2008 Mural Consulting Corporation, All Rights Reserved
  27. 27. What does this mean? • Economic pressures will create increased opportunity for SaaS • Subscription-based Licensing, even for On-Premise software may be an attractive alternative to SaaS • The SaaS challenge is cultural, organizational, and behavioral – not technical. You need to understand your readiness for this shift – you may be closer than you think – OR farther away 27 © 2008 Mural Consulting Corporation, All Rights Reserved
  28. 28. What is the Right Offering? 28 © 2008 Mural Consulting Corporation, All Rights Reserved
  29. 29. Assess Your Readiness Are You Ready for SaaS? Go to selfassess.muralconsulting.com to complete the SaaS Readiness Self-Assessment now http://www.muralconsulting.com 29 © 2008 Mural Consulting Corporation, All Rights Reserved
  30. 30. Q&A © 2008 Mural Consulting Corporation, All Rights Reserved

×