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SaaSplaza Software + Services

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A short introduction about the Microsoft SaaS market, presented by SaaSplaza. SaaSplaza is an open Platform and Microsoft Incubation Center that brings software suppliers and implementation partners …

A short introduction about the Microsoft SaaS market, presented by SaaSplaza. SaaSplaza is an open Platform and Microsoft Incubation Center that brings software suppliers and implementation partners together for the transparent supply of Software-as-a-Service.

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  • 1. Software + Services Agenda: 1. Microsoft‟s odyssey into S+S 2. What about SPLA 3. Major complains about S+S Herb Prooy Market Maker - SaaSplaza
  • 2. What is Software as a Services (=SaaS)?  Customer view:  Software is running anywhere else, without investments and I only pay a price per user per month;  Technical view:  Software is running on a scalable, virtualized „non-dedicated‟ infrastructure; 2
  • 3. SaaS is becoming a mainstream choice The CAGR for on- demand ERP will be 20% through 2011, (SMB market will account for 86%) * $800 **Millions of US$ $600 $400 $200 $0 2007 2008 2009 2010 2011 Small Business Lower Midmarket Upper Midmarket Enterprise Market 3
  • 4. Microsoft‟s odyssey to SaaS Early 2006 Steve Ballmer stated that Software as a Service strategy became a cornerstone of the Microsoft strategy Channelweb June 4ht 2006 - Steve Balmer: Microsoft depends on partners to sign up new customers. quot;There will have to be a business relationship that facilitates thatquot; 4
  • 5. Mid 2006 : Incubation Centers + SPLA  Appointing 10 SaaS Incubation Centers to support Partners in their transition;  Announced the SPLA license program. A bold step for a dominant software supplier and still not followed by other established competitors. 5
  • 6. 2007 : Software + Services On the WPC July 2007 Software as a Service redefined by Microsoft to Software + Services In the new era of „service disruption‟; it is not only about the software but more and more about the services. Web-services but a also added value services. 6
  • 7. 2008 : S+S products  March 2008: Release of CRM 4.0.  Web enabled, multi-tenant version  July 2008 :Announcement of BPOS  Microsoft announce the offering S+S from their own Platform and invoicing customers directly  Partner receives 12% +6% kick-back;  July 2008 : CRM offered from the Microsoft „Cloud‟ 7
  • 8. The “Cloud” Cloud Computing refers to both the applications delivered as services over the Internet and the hardware and systems software in the datacenters that provide those services. 8
  • 9. Today‟s S+S landscape Collaboration and Business Messaging Solutions Applications ISP‟s & Telco‟s SaaS Infrastructure Hardware & Hosters Software 9
  • 10. Microsoft S+S landscape Collaboration and Business BPOS Messaging Solutions Applications CRM ISP‟s & Telco‟s SaaS Infrastructure Hardware & Azure Hosters Software 10
  • 11. Understanding SPLA licensing  On-premise licensing is upfront and C/SIDE and RoleTailored client access are concurrent user based  SPLA licensing is per month and C/SIDE and RoleTailored client access are named user based  In the on-premise model Software Assurance (BREP) is optional; In SPLA SA this is included and required  Add-on base royalty is currently zero  Some local granules price is zero (Microsoft IP)  In the on-premise model the price is cost minus partner margin;  In the SPLA model price is cost to partner
  • 12. 2007 : Go-to-market  Webhoster  Exchange  ASP  Offices  Sharepoint  CSP  Hosting  BPO  Platform Prov.  Rental companies SPLA License Service  Streaming Media Customer Provider  ISP‟s Hosting fee  ISV‟s  Outsourcers 12
  • 13. 2007 : Go-to-market SPLA License Service Customer Provider Hosting fee Traditional NAV • What about margin on software? Microsoft • What about customer ownership Partner • What about deal-recognition? • What about support? 13
  • 14. 2007 : Go-to-market SPLA License Service Customer Provider Hosting fee Traditional NAV  What about margin on software? Microsoft  What about customer ownership Partner  What about deal-recognition?  What about support? 14
  • 15. 2009 : NAV S+S Go-to-market NAV SPLA ISV Distributor NAV Implementation Customer Partner  Partner owns the customer!  Partner makes margin on license + infra + services!  SPLA deal will have recognition!  Partner will get software support! 15
  • 16. 2009 : NAV S+S Go-to-market NAV SPLA ISV Distributor NAV Implementation Customer Partner  Partner owns the customer!  Partner makes margin on license + infra + services!  SPLA deal will have recognition!  Partner will get software support! 16
  • 17. So  Ready to go! But complains are holding you back! 1. NAV S+S does not allow customizations; 2. I don‟t make margin on S+S; 3. I can not motivate or pay my sales in an S+S model; 4. I‟m cannibalizing my own market; 17
  • 18. NAV S+S can be customized Terminal Terminal Server Terminal Server Terminal Server Server  Indeed NAV is not web-enabled;  But a bit ‘multi-tenant’;  Infrastructure is scalable;  Customizations in SQL; SQL-Server SQL-Server SQL-Server SQL-Server 18
  • 19. Compensating your sales teams “Initially, we tried to incent our sales orgs to tackle big accounts perpetually to offset the cash flow issue. Eventually we made comp completely neutral. Same commission no matter what the customer buys. We let the customers decide whether to go SaaS or On-premises. When the sales comp favored On- premises, it was a 50/50 split. When we made it neutral it went to 99% On-demand versus 1% after comp change.” -- Steve Singh, CEO, Concur Technologies http://smoothspan.wordpress.com/2007/09/25/interview- concurs-ceo-steve-singh-speaks-out-on-saason-demand/
  • 20. Incentive scheme Measuring your sales on: GrowthQ1 your recurrent revenue per quarter of Q2 Q3 Q4 On-premise model Q1 Q2 Q3 Q4 S+S model 20
  • 21. Cannibalizing your own market? Misunderstandings:  NAV S+S : is not a different product;  NAV S+S : is not different software;  NAV S+S is for small customers;  NAV S+S is a different sale: I need a different sales organization or different sales 21
  • 22. The Market is for NAV S+S The CAGR for on- demand ERP will be 20% through 2011, (SMB market will account for 86%) * NAV S+S Market $800 **Millions of US$ $600 $400 $200 $0 2007 2008 2009 2010 2011 Small Business Lower Midmarket Upper Midmarket Enterprise Market 22
  • 23. It‟s about addressable market Marketshare ERP (non-enterprise) MS-Dynamics ERP Other ERP products The Fortune 5 million 23
  • 24. It‟s about addressable market Marketshare ERP (non-enterprise) SaaS ERP Netsuite last quarter results: •Focused on small & mid sized companies •Per month 800.000 unique users on their platform •Annual revenue $ 152.5 mil, a growth of 40,5% MS-Dynamics ERP •Last quarter, ending Dec 2008 : growth of 30,5% to $ 41,4 Other ERP products mil. The Fortune spending on hardware & •In that same quarter the business 5 million software drops 27,8%. •350 new customers add‟s in the last quarter. •With 130 direct sales rep‟s •Sales cycle varies from 30 to 180 day‟s. 24
  • 25. What is the difference? Or where can you make the difference?  Customers decide only today when they are sure they see an immediate pay-back;  S+S offers you a24 hour delivery of an NAV instance;  ISV offers immediate (vertical) added value;  Prepare pre-configured instances;  S+S offers OPEX no CAPEX!!  No implementation risks!  With a rapid implementation approach a customer will see cost efficiency gains within a month! 25
  • 26. 2009 : NAV S+S Go-to-market NAV SPLA ISV Distributor NAV Implementation Customer Partner 26
  • 27. Herb Prooy pr@saasplaza.com www.saasplaza.com 27