How to Fail Miserably as a Cloud Software Provider

How to Fail Miserably as a Cloud Software Provider
Jesse Kliza | Apprenda

#1 - Leave now, and miss this presentation

Kidding!(but seriously, you should stay)

Who is Apprenda?
“Doctor’s turned patients”
Understand the “pain” because we’ve been there
Team members with SaaS experience ranging from software architecture to business modeling.
Creators of SaaSGrid – The Application Server for Software as a Service

Company Overview
Mission and focus: SaaS enablement
Both as a delivery paradigm and a business model
SaaSGrid solves three problems
SaaS Architecture
Applications are inherently single tenant  multi-tenancy is very difficult to achieve correctly
SaaS Operations
Applications are not built for web scale  apps can not take advantage of newly provisioned compute resource
SaaS Business
Applications are not ready for on-demand commercialization  no instrumentation for metering, monetization and billing schemes
SaaSGrid is a licensed application server
Run it anywhere you want (Amazon, Azure, OpSource, Peer1, Rackspace…) to eliminate infrastructure lock-in

What is a Cloud Software Provider?
Company that writes software, delivers functionality online
Company that takes on customer’s operational burden
Company that proves themselves regularly since the “sale” is perpetual

The Real #1 – Misunderstand what’s happening to your business
Avoid reality that your customers’ former operational burdens are now yours
Fail to realize that aggregate demand is now centralized to you
Diminish how drastic failures can be
Keep the culture the same as a packaged software culture

What Does this Mean?
The technology is the business
Problems are rarely ever isolated to single customers
Auxiliary systems are mission critical
Provisioning
Billing

#2 – Be Unreliable
Intolerable/unplanned downtime
Poor support
Software delivery and operations are “out of sync”
Lack communication

What has implications on reliability?
Software architecture
Infrastructure capabilities
Ability to support web-scale
3rd party service providers

#3 – Have Low Adoptability
Make it difficult for users to start using your software
Make it difficult for users to stop using your software

What affects adoptability?
Non automated provisioning
Inflexible pricing
No trials
Bad UI/UX

#4 - Dismiss the critical importance of margins
Ignore that 100% gross margins are a thing of the past
Dismiss “scalability” and “efficiency” as problems to deal with later
Misunderstand the dynamic of customer acquisition

What can make or break margins?
Lack of multi-tenancy (or generally poor software architecture)
High customer acquisition costs
Poorly scaling operations

#5 – Don’t Keep Pace With Change
Think you can build once, sell always (“green screen software”)
Ignore competitive pressures (geography can no longer isolate you from competition)
Ignore cultural changes (think “ecosystem play”)

How do we “keep pace”?
Evolve your software often (i.e., frequent updates)
Be the center of your customer ecosystem – they’ll force you to keep pace
Buy into the fact that you now own a relationship with your customer, not a revenue stream

Is there a single thing you should walk away with?

Architecture “Reigns” in the Cloud
Business Architecture
Operations framework
Customer framework
Auxiliary support systems
Software architecture
Delivery efficiency (e.g., multi-tenancy)
Scale capability
Change flexibility

Summary
Recognize the culture shift required
Don’t be chintzy with your technology; “later” isn’t an option with SaaS failure
Treat customers as relationships, not revenue streams

Questions?
Jesse KlizaDirector of Marketing | Apprenda518-383-2130 x306
jkliza@apprenda.com
www.apprenda.com

How to Fail Miserably as a Cloud Software Provider

by Apprenda on Sep 13, 2010

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How to Fail Miserably as a Cloud Software Provider — Presentation Transcript