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SaaS Business Principles * Copyright Thomond Technology

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SaaS Business Principles * Copyright Thomond Technology

  1. 1. SaaS Business Principles 05/12/10 Copyright Thomond Technology
  2. 2. SaaS Applications Are Here and Real 05/12/10 Copyright Thomond Technology
  3. 3. Managing a SaaS Business <ul><li>SaaS Business Principles </li></ul><ul><li>SaaS Challenges </li></ul><ul><li>Financial Matters </li></ul><ul><li>Marketing SaaS </li></ul><ul><li>Telemarketing </li></ul><ul><li>Selling SaaS </li></ul><ul><li>Attrition & Renewals </li></ul><ul><li>SaaS and Alliances </li></ul><ul><li>Supporting & Consulting SaaS </li></ul>05/12/10 Copyright Thomond Technology
  4. 4. Talk on First Three Today <ul><li>SaaS Business Principles </li></ul><ul><li>SaaS Challenges </li></ul><ul><li>Financial Matters </li></ul><ul><li>Marketing SaaS </li></ul><ul><li>Telemarketing </li></ul><ul><li>Selling SaaS </li></ul><ul><li>Attrition & Renewals </li></ul><ul><li>SaaS and Alliances </li></ul><ul><li>Supporting & Consulting SaaS </li></ul>05/12/10 Copyright Thomond Technology
  5. 5. SaaS Business Principles <ul><li>Pay as you go </li></ul><ul><ul><li>Monthly subscription as the pricing basis </li></ul></ul><ul><ul><li>But does not need to reflect contract </li></ul></ul><ul><li>Customer Success </li></ul><ul><ul><li>It’s a Service not a product </li></ul></ul><ul><li>Have employees to educate/talk to prospects </li></ul><ul><ul><li>If Not, then build it and they WILL LEAVE </li></ul></ul><ul><li>Accept Attrition as a fact </li></ul><ul><li>Renewals are critical </li></ul><ul><li>Multi Tenant / Single Tenant Architecture </li></ul><ul><li>Shared Risk – Opex not Capex </li></ul>05/12/10 Copyright Thomond Technology
  6. 6. SaaS Business Principles <ul><li>Ease of Use </li></ul><ul><li>Time to Value is significantly better </li></ul><ul><li>Bi-Furcated Distribution model on company size </li></ul><ul><li>Hub Based Selling </li></ul><ul><li>Free Trial for appropriate time period </li></ul><ul><ul><li>Must be supported by rigorous process </li></ul></ul><ul><li>Data Export Facility so that Customers feel they can easily get their data back </li></ul>05/12/10 Copyright Thomond Technology
  7. 7. SaaS Business Principles <ul><li>Seed and Grow (be willing to start small) </li></ul><ul><li>Be Open about Availability and Performance of Service </li></ul><ul><li>Annual Contracts/Size for Discount </li></ul><ul><li>Manage Business metrics on a Monthly basis </li></ul><ul><li>Support is part Service Price </li></ul><ul><li>Multiple Service offerings differentiated by users/ functionality </li></ul>05/12/10 Copyright Thomond Technology
  8. 8. SaaS Business Principles <ul><li>Service Integration with other SaaS / On-Premise systems </li></ul><ul><li>Service is Multi Lingual/ Multi Currency </li></ul><ul><li>Webinars for Education / Soft Selling </li></ul><ul><li>Multiple small events for Customer meetings / Viral Marketing </li></ul><ul><li>Public Privacy Statement on all Websites </li></ul><ul><li>Public Terms of Use on all Websites </li></ul>05/12/10 Copyright Thomond Technology
  9. 9. Managing a SaaS Business <ul><li>SaaS Business Principles </li></ul><ul><li>SaaS Challenges </li></ul><ul><li>Financial Matters </li></ul><ul><li>Marketing SaaS </li></ul><ul><li>Telemarketing </li></ul><ul><li>Selling SaaS </li></ul><ul><li>Attrition & Renewals </li></ul><ul><li>SaaS and Alliances </li></ul><ul><li>Supporting & Consulting SaaS </li></ul>05/12/10 Copyright Thomond Technology
  10. 10. SaaS Challenges <ul><li>Takes a long time to be profitable </li></ul><ul><li>Generating Cash flow can be difficult </li></ul><ul><li>Difficult to have multiple distribution channels </li></ul><ul><li>System Integrators make less money versus on-premise solutions </li></ul><ul><li>SLA (Performance, Reliability, Security etc.) </li></ul><ul><li>Low Market Acceptance of SaaS / Cloud Computing </li></ul>05/12/10 Copyright Thomond Technology
  11. 11. SaaS Challenges <ul><li>Hybrid Competitors trying to confuse positioning </li></ul><ul><li>Data Protection </li></ul><ul><li>Attrition – </li></ul><ul><ul><li>manage and model </li></ul></ul><ul><li>Renewals </li></ul><ul><li>Customers are used to being regularly visited by traditional sellers </li></ul>05/12/10 Copyright Thomond Technology
  12. 12. Managing a SaaS Business <ul><li>SaaS Business Principles </li></ul><ul><li>SaaS Challenges </li></ul><ul><li>Financial Matters </li></ul><ul><li>Marketing SaaS </li></ul><ul><li>Telemarketing </li></ul><ul><li>Selling SaaS </li></ul><ul><li>Attrition & Renewals </li></ul><ul><li>SaaS and Alliances </li></ul><ul><li>Supporting & Consulting SaaS </li></ul>05/12/10 Copyright Thomond Technology
  13. 13. Financial Planning in SaaS <ul><li>Revenue Model Σn = n(n+1)/2 </li></ul><ul><ul><li>Invoiced </li></ul></ul><ul><ul><li>Deferred Revenue </li></ul></ul><ul><ul><li>Off Balance Sheet </li></ul></ul><ul><li>Pricing by unit per month </li></ul><ul><ul><li>Base Price </li></ul></ul><ul><ul><li>Multi Service Offering </li></ul></ul><ul><ul><li>SMB to Enterprise Offering </li></ul></ul><ul><li>Profile of New Business versus Add On is very different from traditional model </li></ul>05/12/10 Copyright Thomond Technology
  14. 14. Financial Planning in SaaS <ul><li>Annual Contracts </li></ul><ul><li>Multi Year Contracts </li></ul><ul><li>What is the correct discounting Strategy? </li></ul><ul><li>Contribution by market segment </li></ul><ul><ul><li>Cost per order € </li></ul></ul><ul><ul><li>Start at SMB, Enterprise or Both </li></ul></ul><ul><li>Is there an indirect model that is more effective than direct option? </li></ul>05/12/10 Copyright Thomond Technology
  15. 15. Financial Planning in SaaS <ul><li>How many Sales people are appropriate </li></ul><ul><ul><li>OTE, Quota, </li></ul></ul><ul><ul><li>One size doesn’t fit all </li></ul></ul><ul><li>What level of supporting resources (Ratios) </li></ul><ul><ul><li>Sales Engineers – In Country </li></ul></ul><ul><ul><li>Sales Engineers – Hub </li></ul></ul><ul><ul><li>Inbound Telemarkeing </li></ul></ul><ul><ul><li>Outbound Telemarketing </li></ul></ul>05/12/10 Copyright Thomond Technology
  16. 16. Financial Planning in SaaS <ul><li>Cost per lead </li></ul><ul><ul><li>By Source, By Market, By Campaign </li></ul></ul><ul><li>Pipe to Spend </li></ul><ul><ul><li>By Source, By Market, By Campaign </li></ul></ul><ul><li>Number of new business leads per sales group </li></ul><ul><ul><li>(((Quota * 0.8 * No. O f A E s * % New Business) / (Average Deal Size))/ Conversion Rate) </li></ul></ul>05/12/10 Copyright Thomond Technology
  17. 17. SaaS Business Principles 05/12/10 Copyright Thomond Technology

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