Software Delivery Models
Myth: SaaS is the Software Delivery Model of the future
Confirmed? Plausible? or Busted?
Terms
• Software as a Service
(SaaS)
• Application Service
Provider (ASP)
• Monthly Recurring
Revenue (MRR)
• Annual Recur...
SaaS Value – Mythical?
Break it down into separate “myths”
– SaaS software costs less than
packaged software
– SaaS can be...
SaaS Value – Mythical?
Break it down into separate “myths”
– The cost of SaaS development is
lower than that of packaged
s...
What is SaaS
• Define SaaS
– SaaS is a model of software
deployment where an
application is hosted as a service
provided t...
SaaS: The Elevator Pitch
Fee Structure
– All inclusive fees are steady
and predictable – no large
capital or expense outla...
SaaS: The Elevator Pitch
Platform
– Single platform facilitates
horizontal integration and best
of breed partnerships
– Yo...
SaaS: The Elevator Pitch
Focus
– You focus on doing what
you do best, allow the
vendor to do the same
Keys
– Adoption
– Re...
SaaS: Maturity Levels
• Level 1 – Ad-Hoc/Custom (ASP)
Benefit – Server Consolidation
• Level 2 – Configurable
Benefit – Ea...
SaaS: Licensing Models
• Subscription-Based
• Usage-Based
• Transaction-Based
• Value-Based (DAXKO)
• Fixed-Fee
SaaS vs. Packaged: Fees
• Packaged software fees
are very unpredictable
• Fees will spike for “tech
refreshes”
• SaaS fees...
SaaS vs. Packaged: Revenue
Example: Year over
year packaged sales
are much higher than
SaaS sales, yet SaaS
revenue wins o...
SaaS vs. Packaged: Engineering Costs
• SaaS Platform
– Support one version of the
product
– Support one technology stack
•...
SaaS Myths: Cost
SaaS software costs less than packaged software
Myth busted, right?
SaaS Myths: Cost
• What about:
– Hosting costs?
– Systems Engineer support?
– Professional Services for upgrades?
• Myth: ...
SaaS Myths: Speed
• SaaS can be implemented more quickly than
packaged software
Myth Result: Confirmed
• SaaS facilitates ...
SaaS Myths: Security
• SaaS software is more secure than packaged
software
Myth Result: Plausible
SaaS Myths: Customer / Control
• SaaS allows customers to focus on their core
mission
Myth Result: Confirmed
• SaaS facili...
SaaS Myths: Valuation
SaaS companies have a higher valuation
William Blair & Company, 2007
Myth Result: Confirmed
SaaS Market Trends
• AMR Research: SaaS Revenue
$2 billion in 2006, up 25% from
2005
• Gartner:
– $19.3 billion by 2010
– ...
SaaS is the Software Delivery Model of the future
Myth Result: Confirmed
The End
Upcoming SlideShare
Loading in...5
×

Software Delivery Model

1,153

Published on

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

  • Be the first to like this

No Downloads
Views
Total Views
1,153
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
25
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Software Delivery Model

  1. 1. Software Delivery Models Myth: SaaS is the Software Delivery Model of the future Confirmed? Plausible? or Busted?
  2. 2. Terms • Software as a Service (SaaS) • Application Service Provider (ASP) • Monthly Recurring Revenue (MRR) • Annual Recurring Revenue (ARR)
  3. 3. SaaS Value – Mythical? Break it down into separate “myths” – SaaS software costs less than packaged software – SaaS can be implemented more quickly than packaged software – SaaS facilitates more frequent improvements / releases – SaaS facilitates faster corporate growth – SaaS software is more secure than packaged software
  4. 4. SaaS Value – Mythical? Break it down into separate “myths” – The cost of SaaS development is lower than that of packaged software – SaaS allows customers to focus on their core mission – SaaS provides the customer more control over the software – SaaS facilitates a better understanding of the user – SaaS companies have a higher valuation
  5. 5. What is SaaS • Define SaaS – SaaS is a model of software deployment where an application is hosted as a service provided to customers across the Internet. – Multi-tenant vs. Independent environments – Configure vs. Customize – Rent vs. Own – Centralized vs. Distributed
  6. 6. SaaS: The Elevator Pitch Fee Structure – All inclusive fees are steady and predictable – no large capital or expense outlay upfront – Vendor earns the customer business every day – Lower total cost of ownership – Healthy revenue model for the vendor, with longer term sustainability – Right-sized
  7. 7. SaaS: The Elevator Pitch Platform – Single platform facilitates horizontal integration and best of breed partnerships – You are always on the latest and greatest release – Highly secure – Scalable and performant
  8. 8. SaaS: The Elevator Pitch Focus – You focus on doing what you do best, allow the vendor to do the same Keys – Adoption – Retention – Clean AR – Scalability
  9. 9. SaaS: Maturity Levels • Level 1 – Ad-Hoc/Custom (ASP) Benefit – Server Consolidation • Level 2 – Configurable Benefit – Ease of Program Flexibility • Level 3 – Configurable, Multi-Tenant-Efficient Benefit – Horizontal integration, Lower Cost of Ownership • Level 4 – Scalable, Configurable, Multi-Tenant- Efficient Benefit – Scalability and Performance Source: Microsoft
  10. 10. SaaS: Licensing Models • Subscription-Based • Usage-Based • Transaction-Based • Value-Based (DAXKO) • Fixed-Fee
  11. 11. SaaS vs. Packaged: Fees • Packaged software fees are very unpredictable • Fees will spike for “tech refreshes” • SaaS fees are very predictable and are based upon usage
  12. 12. SaaS vs. Packaged: Revenue Example: Year over year packaged sales are much higher than SaaS sales, yet SaaS revenue wins out over time
  13. 13. SaaS vs. Packaged: Engineering Costs • SaaS Platform – Support one version of the product – Support one technology stack • Packaged Software – Support n versions of the product – Support multiple technology stacks • “SaaS vendors spend from 5% to 10% of revenues on R&D, well below the 10% to 22% at more traditional software companies” William Blair & Company, 2007
  14. 14. SaaS Myths: Cost SaaS software costs less than packaged software Myth busted, right?
  15. 15. SaaS Myths: Cost • What about: – Hosting costs? – Systems Engineer support? – Professional Services for upgrades? • Myth: SaaS software costs less than packaged software Myth Result: Plausible
  16. 16. SaaS Myths: Speed • SaaS can be implemented more quickly than packaged software Myth Result: Confirmed • SaaS facilitates more frequent improvements / releases Myth Result: Confirmed • SaaS facilitates faster corporate growth Myth Result: Busted
  17. 17. SaaS Myths: Security • SaaS software is more secure than packaged software Myth Result: Plausible
  18. 18. SaaS Myths: Customer / Control • SaaS allows customers to focus on their core mission Myth Result: Confirmed • SaaS facilitates a better understanding of the customer / user Myth Result: Confirmed • SaaS provides the customer more control over the software Myth Result: Busted
  19. 19. SaaS Myths: Valuation SaaS companies have a higher valuation William Blair & Company, 2007 Myth Result: Confirmed
  20. 20. SaaS Market Trends • AMR Research: SaaS Revenue $2 billion in 2006, up 25% from 2005 • Gartner: – $19.3 billion by 2010 – 25% of new business delivered via SaaS by 2011, up from 5% in 2005 • Aberdeen: 70% of 631 companies surveyed are looking at or planning to use SaaS William Blair & Company, 2007
  21. 21. SaaS is the Software Delivery Model of the future Myth Result: Confirmed
  22. 22. The End
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×