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                                                                                         11/09




       SaaS Reven...
Alternate
                                                                          Title




   Don’t Leave Money on the ...
The goals for a SaaS vendor should be different than a
               Legacy Software vendor


       Producers           ...
Legacy Software



                       Customers              Developers




                                   Channel...
Software-as-a-Service (SaaS)



                        Customers              Developers




                            ...
Software-as-a-Service (SaaS)



                        Producers               Consumers




                            ...
Software-as-a-Service (SaaS)



                        Producers               Consumers


                              ...
Software-as-a-Service (SaaS)



                        Producers               Consumers


                              ...
Legacy Software Business
Structure

                                         Intellectual
                       Marketing...
SaaS Business Architecture


                                                 Intellectual
                       Marketin...
Revenue Model




                     Intellectual                        Products
  Marketing
                      Prop...
SaaS is not a Revenue Model or Pricing Strategy!



                                                  Monthly
        SaaS...
Architecture                                            Marketing



Revenue Model            separate                   P...
Pricing Strategy must be
              separated from Revenue Streams




Revenue Model            separate               ...
How can you apply Pricing Strategy without
  knowing what Revenue Streams you’ll leverage?



Revenue Model            sep...
Agile Revenue Generation is key...



    Architecture                                            Marketing



    Revenue...
Agile Revenue Generation...
       Adjacent Vertical




                                                   Ancillary Mark...
7 SaaS Revenue
Streams
                                     Products

                     Subscriptions               Eco...
Less Scalable Revenue
Streams
                                     Products

                     Subscriptions           ...
Scalable Revenue
Streams
                                     Products

                     Subscriptions               E...
Revenue Metrics

Modules        Users   Storage

   CPU         Units   Reports
                                          ...
Revenue Metrics

                                                                        Metrics




       Pricing Bundle...
Revenue Metrics

                                                                     Metrics
            Different bundle...
Revenue Metrics

                                                                    Metrics
            Different bundles...
Get the detailed guide to the
 7 SaaS Revenue Streams with examples:

  http://saasrevenue.com/7streams.html

If this is a...
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
7 SaaS Revenue Streams
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7 SaaS Revenue Streams

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Learn to make money, or not to leave money on the table, with SaaS! This is an overview of the seven SaaS Revenue Streams created by Lincoln Murphy of Sixteen Ventures. The seven streams used in SaaS Revenue Modeling are: Recurring, Ecosystem, Ancillary, Network Effect, Products, Services, and Advertising.

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Transcript of "7 SaaS Revenue Streams"

  1. 1. Draft 11/09 SaaS Revenue Modeling: Introducing the 7 Revenue Streams http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  2. 2. Alternate Title Don’t Leave Money on the Table: Take Advantage of Being a SaaS Vendor http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  3. 3. The goals for a SaaS vendor should be different than a Legacy Software vendor Producers Scalable Revenue Streams Consumers Understanding why* allows for proper Revenue Modeling *business scalability, increased CLV, leveraging multi-tenancy, etc. http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  4. 4. Legacy Software Customers Developers Channels Three basic elements http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  5. 5. Software-as-a-Service (SaaS) Customers Developers Channels Same elements http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  6. 6. Software-as-a-Service (SaaS) Producers Consumers Ecosystem Different approach http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  7. 7. Software-as-a-Service (SaaS) Producers Consumers Network Effect Ecosystem Very different approach http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  8. 8. Software-as-a-Service (SaaS) Producers Consumers Network Effect Key differentiators Ecosystem http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  9. 9. Legacy Software Business Structure Intellectual Marketing Property Revenue Technology Model Loosely-coupled, at best http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  10. 10. SaaS Business Architecture Intellectual Marketing Property Network Centricity Technology Revenue Model All aspects are tightly coupled http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  11. 11. Revenue Model Intellectual Products Marketing Property Subscriptions Ecosystem Network Network Centricity Effect Services Advertising Revenue Technology Model Ancillary Revenue Model consists of Revenue Streams http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  12. 12. SaaS is not a Revenue Model or Pricing Strategy! Monthly SaaS Subscriptions If you only leverage “subscriptions” you are leaving money on the table http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  13. 13. Architecture Marketing Revenue Model separate Pricing Strategy Understand where each piece fits into the overall SaaS Business Architecture http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  14. 14. Pricing Strategy must be separated from Revenue Streams Revenue Model separate Pricing Strategy Pricing Strategy is applied to Revenue Model http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  15. 15. How can you apply Pricing Strategy without knowing what Revenue Streams you’ll leverage? Revenue Model separate Pricing Strategy Use Pricing Strategy to drive users to Scalable Revenue Streams http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  16. 16. Agile Revenue Generation is key... Architecture Marketing Revenue Model separate Pricing Strategy Revenue Model + Vertical Specific Pricing = Agility http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  17. 17. Agile Revenue Generation... Adjacent Vertical Ancillary Market Ancillary Market Subscriptions Network Effect Ecosystem Ancillary Products Services Ads applies to Subscriptions & the other 6 Revenue Streams http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  18. 18. 7 SaaS Revenue Streams Products Subscriptions Ecosystem Network Effect Services Advertising Ancillary http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  19. 19. Less Scalable Revenue Streams Products Subscriptions Ecosystem Network Effect Services Advertising Ancillary http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  20. 20. Scalable Revenue Streams Products Subscriptions Ecosystem Network Effect Services Advertising Ancillary http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  21. 21. Revenue Metrics Modules Users Storage CPU Units Reports Products Transactions Files etc. Metrics Subscriptions Ecosystem Network Effect Metrics are built into the application Services Advertising Ancillary Each revenue stream contains metrics http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  22. 22. Revenue Metrics Metrics Pricing Bundle #1 Pricing Bundle #2 Pricing Bundle #3 Modules Users Storage Modules Users Storage Modules Users Storage CPU Units Reports CPU Units Reports CPU Units Reports Transactions Files etc. Transactions Files etc. Transactions Files etc. Metrics from any or all revenue streams that are represented in the application are bundled, along with timeframes (monthly, annual, etc.), during Pricing Strategy based on marketing goals http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  23. 23. Revenue Metrics Metrics Different bundles for different markets Pricing Bundle #1 Pricing Bundle #2 Pricing Bundle #3 Modules Users Storage Modules Users Storage Modules Users Storage CPU Units Reports CPU Units Reports CPU Units Reports Transactions Files etc. Transactions Files etc. Transactions Files etc. Separating Revenue Model & Pricing Strategy improves agility and allows pricing to be aligned with market requirements; critical when entering adjacent markets http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  24. 24. Revenue Metrics Metrics Different bundles for different markets Pricing Bundle #1 Pricing Bundle #2 Pricing Bundle #3 Modules Users Storage Modules Users Storage Modules Users Storage CPU Units Reports CPU Units Reports CPU Units Reports Transactions Files etc. Transactions Files etc. Transactions Files etc. But what are these metrics? How are the pricing bundles determined? These are tied to your company and your market! http://saasrevenue.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
  25. 25. Get the detailed guide to the 7 SaaS Revenue Streams with examples: http://saasrevenue.com/7streams.html If this is a SaaS Revenue Model emergency put down the mouse and call us: (972) 200-9317 http://saasrevenue.com
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