THINKstrategies Software Business 2008 Presentation

Overcoming the Organizational Barriers to Transforming Your Software Business into an On-Demand Company Presented by, Jeff Kaplan Managing Director THINKstrategies [email_address] 781-431-2690

Agenda
State of SaaS
Key Market Drivers/Trends
Market Opportunities/Challenges
Migrating to SaaS
Key Operational Challenges
Industry Best Practices

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

An Equation for Greater Market Opportunities Economy Uncertainty Tighter Budgets Greater SaaS Opportunities + =

SaaS Evolution SaaS 1.0 SaaS 2.0
Standalone point apps
Focus on ease of use/price
One size fits all, minimal customization
Horizontal applications
Limited interoperability
Emphasis on lower TCO
Multidimensional platforms
Focus on added functionality
Multiple configurations, greater versatility
Vertical/industry solutions
Easier integration
Emphasis on higher ROI

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

SaaS Expands from Front- to Back- to Inter-Office Apps BUSINESS APPLICATIONS CRM SFA … Collaboration SCM … ERP Finance … Front Office Inter Office Back Office SaaS Market ‘Gold Rush’

Top Ten Showplace Application Categories Source: SaaS Showplace 44 Messaging 46 eCommerce 47 Human Resource Management (HRM) 49 Marketing 55 Enterprise Resource Planning (ERP) 62 Project Management 67 Document Management 78 Accounting/Financial 80 Collaboration 103 Customer Relationship Management

Top Ten Showplace Industry Categories Source: SaaS Showplace 42 Software 43 Telecommunications/xSPs 55 Professional Services 63 Government 69 Retail 72 Healthcare 80 Technology 91 Manufacturing 102 Banking/Financial Services 110 SMBs

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

Changing Competitive Landscape & & & AimNet Solutions ever dream

Cloud Computing: Today’s New Enablers

New Challenge: Cloud Computing Outages “ Amazon S3 Outage Rains On Cloud-computing Parade” “ Outages Force Cloud Computing Users To Rethink Tactics”

Open Source: The Good, Bad and Ugly
The Good
Proliferation of tools/solutions
Accelerated Development
Concepts of Community
The Bad and Ugly
Lower barriers to entry
Escalating price competition

Ad-Supported SaaS
“ iTunes of IT”
250K users
50,000 new users in last 2 months
Advertisers has grown from 4 to 40
Market Opportunity,
SMB IT pro = $125,000 annual budget.
250k users = $32B in annual spend
Growing at more >$3B per month!

The Meaning of Community in the SaaS Market
Real-time, aggregated data
Meaningful benchmark studies
Practical best practices forums
Continuous updates, new ideas
Dynamic toolkit clearinghouse

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

Enterprise Expectations & Challenges for SaaS
Can you provide a better user experience?
Can you create a different type of community?
Can you support hybrid environments?
Can you permit rapid on-boarding?
Can you track service usage levels?
Can you measure performance levels?
Can you identify & resolve service issues?
Can you verify SLA compliance?

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

SaaS vs. Legacy SW Economics Cost of Goods Sold (COGS) R&D SG&A EBITDA Source: McKinsey, May 2007

No One Likes to Sell Services
Raises concerns about the product.
Complicates the sale/extends sales cycle.
Seldom properly incented.
Weak value proposition.
Poor track record.

Living in a Hybrid World
Most enterprises will seek mix of on-premise & on-demand solutions.
Users prefer choice.
Users seeking on-demand/on-premise integration.
‘ Applets’, Appliances, etc. will permit off-line use and synchronization.

Hybrid Model Pitfalls
Balancing,
Multiple Offerings
Multiple Codes/Versions
Differing Buyers
Multiple Sales Channels/ Compensation Plans
Differing Revenue Recognition

Channel/Supply Chain Opportunities Legacy ISVs New SaaS Providers Enabling Technology Vendors
Offshore SW Developers
3 rd party SW platforms
3 rd party HW systems
xSPs
Hosting companies
Carriers
Channel Partners
Distributors
VARs/Integrators
eCommerce Sites
Corporate Customers Consumers

SaaS Ecosystems – The New Channel Jamcracker

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

Corporate Positioning Roadmap Technical Features/ Solution Differentiators Strategic Vision/ Business Benefits Competitive Advantages
Success Factors:
Compelling Value Proposition
Effective Mktg. Messages
Defined Market Focus
Unique Technical Competencies
Strong Products/Solutions
Solid Customer References
Articulate Spokespeople
Targeted Press/Analysts
Consistent Internal/External Communications
Continuous/Aggressive Effort

THINKstrategies’ SaaS Balanced Scorecard
Target Market Segmentation
Competitive Landscape
Corporate Management
Functional Capabilities & Features
Solution Packaging
Pricing & Revenue Realization
Service Delivery Platform & Architecture
Security and Availability Assurance
Service Provisioning, Billing and Metering
Contracting, SLAs and Reporting
Sales Strategies and Skills
Strategic Partnering/ Ecosystem Strategies
Marketing and Positioning
Customer Support Capabilities
Financing and Capital Structure

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

Can You Take Your Team Into The Future? Software Services Business Services Information Services Market Evolution

For More Information…
www.SaaS-Showplace.com
www.thinkstrategies.com
[email_address]

http://cloudbook.net	16
http://www.cloudbook.net	8
http://www.slideshare.net	3

THINKstrategies Software Business 2008 Presentation

by Jeff Kaplan on Dec 03, 2008

Accessibility

Categories

Tags

Upload Details

Usage Rights

3 Embeds 27

Statistics

THINKstrategies Software Business 2008 Presentation — Presentation Transcript