Building a Successful SaaS Business is hard, but the successful SaaS business create incredible company value. This presentations outlines the key motivations and tasks to create a successful SaaS business.

1. Making SaaS Businesses Work™
Dave Key

2. Making SaaS Businesses Work™cloudstrategies.biz
Software Industry Average Price/Revenue Ratio is ~2.8x
(Software Equity Group Q1 2013)
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
NetSuite Salesforce Workday Oracle
$309
$2,367
$157
$37,121
Revenue (US$ Millions)
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
30.0x
35.0x
40.0x
NetSuite Salesforce Workday Oracle
20.2x
9.5x
39.9x
3.8x
Price Revenue Ratio*
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
NetSuite Salesforce Workday Oracle
$6,250
$22,600
$10,900
$142,000
Market Cap* ($US Millions)
0%
20%
40%
60%
80%
100%
120%
NetSuite Salesforce Workday Oracle
31%
33%
104%
4%
Year over Year Growth
* Market Data as of 6/20/2013

3. Making SaaS Businesses Work™cloudstrategies.biz

4. Making SaaS Businesses Work™cloudstrategies.biz
CapGemini, 2013

5. Making SaaS Businesses Work™cloudstrategies.biz
0% 20% 40% 60% 80% 100%
Very Satisified with their SaaS
Solution
Would Renew their Services
Would Expand use of SaaS
Would Recommend SaaS to Others
THINKStrategies and Datamation

6. Making SaaS Businesses Work™cloudstrategies.biz
Capgemini 2013

7. Making SaaS Businesses Work™cloudstrategies.biz
NORTH AMERICA WORLDWIDE
93%
76%
Enterprises with a Formal Cloud Strategy
Capgemini 2013

8. Making SaaS Businesses Work™cloudstrategies.biz
Shorter Sales
Cycles
Enhanced
Market
Position
Shorter
Deployments
Increased
Company
Value
Faster
Product
Cycles
Reduced
Revenue
Volatilely
More
Upgrade
Sales

9. Making SaaS Businesses Work™cloudstrategies.biz
Increased
Working
Capital
Deferred
Cash Flow
Channel
Transition
Reduced
Customer
Lock-in
SLA
Compliance
3rd Party
Integration
Complexity
Legacy vs
SaaS
Product
Positioning

10. Making SaaS Businesses Work™cloudstrategies.biz
Product
Sales &
Marketing
Channel DevOps Financial
Organizational Transitions are the Most Difficult

11. Making SaaS Businesses Work™cloudstrategies.biz
Host what you have now and offer it as a subscription
Use Terminal Services for Legacy Client Server Applications
Ensure Basic Cloud Capabilities
Security
On Boarding/Provisioning Software
Billing
Performance Monitoring
Disaster Recovery
Build Organizational Experience with SaaS
Gain Customer and Market Feedback
Limitations:
High Operational Costs
High Sustaining Costs
Miss many Benefits of SaaS
A Short Term Strategy!

12. Making SaaS Businesses Work™cloudstrategies.biz
Rebuild the User Experience in HTML5
Re-Architect the Backend
Multi-tenant
Scalable, Fault Tolerant, Elastic
Move from Customizable to Configurable
Build Integrations with Legacy and other SaaS Systems
Regulatory Compliance
Re-Build with other Initiatives
Social
Mobile
Big Data-Analytics
Change to Agile Process/Continous Integration
Releases every 6 to 12 weeks
Lower Operational Cost and Development Costs, Faster Innovation

13. Making SaaS Businesses Work™cloudstrategies.biz

14. Making SaaS Businesses Work™cloudstrategies.biz
New Pricing Model/Product Offerings
Revised Product & Company Positioning
Marketing Strategy & Tactics (more web based)
Existing & New Channels Challenges (lots!)
New Sales Skills
New Sales Comp plan
Requires Major Cultural Shift
Not Everyone can Adapt

15. Making SaaS Businesses Work™cloudstrategies.biz
DevOps is new Core Competence for Software Companies
7x24 Support requirements
Customer Conversions
New Security Requirements
New SLA Requirements/IT Continuity Requirements
New Compliance Requirements
New Audit Requirements/Security Certifications
New Performance/Capacity Planning requirements

16. Making SaaS Businesses Work™cloudstrategies.biz
Significant SaaS Startup Costs (for ISV)
Deferred Cash Flow
Greater Growth  More Cash Required
Additional Working Capital Requirements
Contract Financing Possible
Different Revenue Recognition
New Accounting Requirements
Reduced, but more Predictable Revenue
New Exit Opportunities (with increased multiples)
New KPIs

17. Making SaaS Businesses Work™cloudstrategies.biz
Requirements for Building Enterprise SaaS Applications
cloudstrategies.biz/requirements-for-building-enterprise-saas-applications
Guidelines for SaaS Development
cloudstrategies.biz/why-software-development-for-saas-is-different
SaaS Channel Strategies
cloudstrategies.biz/the-bad-news-and-good-news-of-the-cloud-transition-for-
saas-vendors-partners/
SaaS Readiness Checklist
cloudstrategies.biz/saas-readiness-checklist
Blog
cloudstrategies.biz/blog

18. Making SaaS Businesses Work™cloudstrategies.biz
Dave Key
cloudstrategies.biz
cloudstrateiges.biz/blog
dave@cloudstrategies.biz
+1 949/887-4401