Software As A Service (SaaS)


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This presentation analyzes the SaaS Business Model. It also gives examples of SaaS providers/vendors, and companies that used these services and how they benefited.

In conclusion, I analyze the implications of SaaS and see how it can help improve business IT strategy through cost savings, increased productivity, improved collaboration, and maintaining your competitive advantage.

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Software As A Service (SaaS)

  1. 1. Software as a Service (SaaS) The Business Model and its Impact By Sharvan Salooja (Nov 2009)
  2. 2. Overview <ul><li>SaaS Business Model </li></ul><ul><li>Impact on Business </li></ul><ul><li>5 Companies using the SaaS model </li></ul><ul><ul><li>What they do </li></ul></ul><ul><ul><li>History and Facts </li></ul></ul><ul><ul><li>Products and Services </li></ul></ul><ul><ul><li>Success Stories </li></ul></ul><ul><li>Implications </li></ul>
  3. 3. The Traditional Model <ul><li>The traditional model of software distribution is referred to as ‘Software as a Product’ </li></ul><ul><ul><li>Software is purchased and installed on personal computers </li></ul></ul><ul><ul><li>Uniquely adapted to the business needs and the hardware on premises </li></ul></ul><ul><ul><li>The IT department manages the operation and security </li></ul></ul>
  4. 4. Limitations <ul><li>Lack of mobility – software is tied to a physical location </li></ul><ul><li>Maintenance - Worry about regular updates to features and security </li></ul><ul><li>Lack of scalability when company requirement grows </li></ul>
  5. 5. <ul><li>A service provider licenses applications to customers for use as a service on-demand </li></ul><ul><ul><li>Host applications on a web server and deliver them over the Internet </li></ul></ul><ul><ul><li>Download applications on a consumer device, available for the duration of the on-demand contract </li></ul></ul><ul><li>Customers ‘rent’ the applications using a web browser or a mobile device </li></ul>The SaaS Business Model
  6. 6. SaaS Examples <ul><li>Almost any software can be offered as a service </li></ul><ul><li>Human Resources Applications </li></ul><ul><li>Financial Accounting Systems </li></ul><ul><li>Desktop Word Processors </li></ul><ul><li>Customer Relationship Management (CRM) Systems (very popular) </li></ul>
  7. 7. SaaS vs. ASP <ul><li>Application Service Providers (ASP) </li></ul><ul><ul><li>Provide dedicated servers and programming resources to individual customers </li></ul></ul><ul><ul><li>Operating costs were very high </li></ul></ul><ul><ul><li>Failed! </li></ul></ul><ul><li>SaaS is different because its providers use a “Multi-tenanted Architecture” </li></ul><ul><ul><li>Single, very large instance of the software, rented by all customers </li></ul></ul>
  8. 8. Impact on Business <ul><li>Pay per use / Subscription </li></ul><ul><ul><li>“ Why pay for the taxi when you can pay only for the trip?!” </li></ul></ul><ul><li>Vendor provides support and maintenance </li></ul><ul><li>Ease of scalability </li></ul><ul><li>Compatibility of software within the organization </li></ul><ul><li>Global accessibility </li></ul>
  9. 9. Service Provider’s Considerations <ul><li>Service Architecture </li></ul><ul><li>Scalability </li></ul><ul><li>Operations cost </li></ul><ul><li>Security </li></ul><ul><li>Service quality and availability </li></ul>
  10. 10. Service Architecture Implementation <ul><li>Reduce operating costs </li></ul><ul><li>Provide scalability </li></ul><ul><li>Effect customization </li></ul><ul><li>Impact robustness and security </li></ul><ul><li>Multi-tenancy – allows sharing among customers – affected by: </li></ul><ul><ul><li>Customization requirement </li></ul></ul><ul><ul><li>Price charged </li></ul></ul><ul><ul><li>Security and configuration requirements </li></ul></ul>
  11. 11. SaaS Business Examples <ul><li>Salesforce </li></ul><ul><li>NetSuite </li></ul><ul><li>GoGrid </li></ul><ul><li>WebECS </li></ul><ul><li>Google Analytics </li></ul>
  12. 12. <ul><li>What they do </li></ul><ul><ul><li>An enterprise cloud-computing company that provides applications for Customer Relationship Management (CRM) </li></ul></ul><ul><ul><li>Worldwide leader in delivering integrated, completely customizable enterprise applications for companies of all sizes </li></ul></ul><ul><li>History and Facts </li></ul><ul><ul><li>Launched in 1999 in a small San Francisco apartment </li></ul></ul><ul><ul><li>Cited as “Fastest Growing Online CRM Company” by Morgan Stanley in 2001 </li></ul></ul><ul><ul><li>Operations in USA, Australia, Japan, Ireland, UK, France, Spain and Germany </li></ul></ul><ul><ul><li>Regularly named in Best/Top 10 lists and won many prestigious awards </li></ul></ul>
  13. 13. <ul><ul><li>CRM Products – Sales Applications, Customer Service Applications </li></ul></ul><ul><ul><ul><li>Editions and Pricing – from $5/user/month to $250/user/month </li></ul></ul></ul><ul><ul><li>Cloud Platform and Infrastructure </li></ul></ul><ul><ul><ul><li>Customers use it to build and run their own applications </li></ul></ul></ul><ul><ul><ul><li>Includes a database, security, workflow, user interface, and other tools </li></ul></ul></ul><ul><ul><ul><li>No need to buy and run hardware and software </li></ul></ul></ul><ul><ul><ul><li>Editions and Pricing - $50/user/month and $75/user/month </li></ul></ul></ul><ul><li>Products and Services </li></ul>
  14. 14. <ul><li>What they do </li></ul><ul><ul><li>Provide on-demand, integrated business management software </li></ul></ul><ul><ul><li>A single hosted application for CRM, ERP, accounting, e-commerce and Web site development </li></ul></ul><ul><ul><li>Enable customers to integrate front-office, back-office, and e-commerce management capabilities into a single platform </li></ul></ul><ul><li>History and Facts </li></ul><ul><ul><li>Founded in 1998 in California </li></ul></ul><ul><ul><li>Offices in USA, Canada, Australia, Japan, UK, Philippines, Singapore, Hong Kong </li></ul></ul><ul><ul><li>Won numerous CRM and ERP awards its products are constantly ranked among the most innovative </li></ul></ul><ul><ul><li>NetSuite is available in 12 languages </li></ul></ul>
  15. 15. <ul><li>Products and Services </li></ul><ul><ul><li>Integrated business management software </li></ul></ul><ul><ul><ul><li>NetSuite, NetSuite OneWorld, NetSuite CRM+, NetSuite Financials </li></ul></ul></ul><ul><ul><li>NS-BOS - application development platform </li></ul></ul><ul><ul><ul><li>On-demand application modules to obtain additional functionality required for specific business needs </li></ul></ul></ul><ul><ul><li>Professional services, training and support related to its suites </li></ul></ul>
  16. 16. <ul><li>What they do </li></ul><ul><ul><li>Cloud hosting division of ServePath Dedicated Hosting </li></ul></ul><ul><ul><li>The first multi-tier, cloud computing platform that allows you to manage your cloud hosting infrastructure completely on demand through an intuitive, web interface </li></ul></ul><ul><li>History and Facts </li></ul><ul><ul><li>ServePath was started in 2001 </li></ul></ul><ul><ul><li>Operates its own state-of-the-art data center in San Francisco </li></ul></ul><ul><ul><li>Manages several thousand servers for over 2000 business customers in more than 100 countries  </li></ul></ul><ul><ul><li>ServePath is a Microsoft Gold Certified Partner in Advanced Infrastructure and Networking Infrastructure Solutions </li></ul></ul>
  17. 17. <ul><li>Products and Services </li></ul><ul><ul><li>Wide variety of Windows and Linux cloud servers </li></ul></ul><ul><ul><li>Create, save and deploy custom server images </li></ul></ul><ul><ul><li>Add load balancing to increase system performance </li></ul></ul><ul><ul><li>24/7 support and 100% uptime </li></ul></ul><ul><ul><li>Options and flexibility of using cloud, dedicated and colocated servers connected via a private dedicated network </li></ul></ul><ul><ul><li>Payments based on server RAM hours, outboud data transfer, and cloud storage usage </li></ul></ul>
  18. 18. <ul><li>What they do </li></ul><ul><ul><li>Offer simple website hosting to fully configured server solutions coupled with proactive server management services </li></ul></ul><ul><ul><li>Windows based hosting, reseller services and managed solutions </li></ul></ul><ul><li>History and Facts </li></ul><ul><ul><li>Founded in 1997, located in Columbus, Ohio </li></ul></ul><ul><ul><li>Customer satisfaction is their number one priority, demonstrated by their 70% referral rate </li></ul></ul><ul><ul><li>The data center gets data transit from 10 Tier 1 backbone providers, including AT&T, Qwest and Level 3, UUNET & Verio </li></ul></ul>
  19. 19. <ul><li>Products and Services </li></ul><ul><ul><li>ASP.NET Hosting </li></ul></ul><ul><ul><ul><li>Plans from $10/mo to $45/month </li></ul></ul></ul><ul><ul><li>Reseller Hosting – hosting without owning infrastructure </li></ul></ul><ul><ul><ul><li>Plans from $30/mo to $160/mo </li></ul></ul></ul><ul><ul><li>Virtual Dedicated Servers (VDS) </li></ul></ul><ul><ul><ul><li>Plans from $60/mo to $200/mo </li></ul></ul></ul><ul><ul><li>Managed Services </li></ul></ul><ul><ul><ul><li>To help reduce in-house administration and IT costs </li></ul></ul></ul>
  20. 20. <ul><li>Next Generation web analytics tool that shows you </li></ul><ul><ul><li>How people find your web site </li></ul></ul><ul><ul><li>How they navigate through it and interact with it </li></ul></ul><ul><li>Gain rich insights into your website traffic and marketing effectiveness with Advanced Segmentation, Custom Reporting, Motion Charts, Cross Channel and Multimedia Tracking </li></ul><ul><li>Free Service! </li></ul><ul><li>Free Support Resources including a Help Center and User Forum </li></ul><ul><li>Professional Services for Installation, Consulting and Training </li></ul>
  21. 21. <ul><li>A 30-person company which offers internet marketing solutions, website management, lead generation programs for the medical and legal industries </li></ul><ul><li>Tried Microsoft Outlook and Excel for forecasting and contact management, but needed something that provided real-time visibility and mobile access for sales reps </li></ul><ul><li>Migrated data to Salesforce CRM solution </li></ul><ul><li>Results with Salesforce </li></ul><ul><ul><li>Increased profitability of each tradeshow it attended in 2008 by 10% </li></ul></ul><ul><ul><li>Improved customer retention by 12% </li></ul></ul><ul><ul><li>Business visibility and analytics support improved planning and facilitate better decision making </li></ul></ul><ul><ul><li>Salesforce’s cloud computing delivery model and easy customization keep IT costs low </li></ul></ul>Success Story Mojo Interactive Boosts Sales and Marketing Effectiveness
  22. 22. <ul><li>$600 million company that is a leader in operative surgical robotics </li></ul><ul><li>Needed to integrate its business process services for hundreds of hospitals nationwide </li></ul><ul><ul><li>tracking where and when its operative surgical systems are used, as well as which surgeons are using them </li></ul></ul><ul><li>Switched from using QuickBooks, Clarify and spreadsheets to NetSuite CRM, integrated with SAP </li></ul><ul><li>Results with NetSuite </li></ul><ul><ul><li>Sales organization manages sales business processes, including tracking new sales opportunities and managing long sales cycles </li></ul></ul><ul><ul><li>NetSuite provides access to real-time reporting, thus providing timely information about the usage of surgical systems and accessories, which is a key indicator of product success </li></ul></ul>Success Story Intuitive Surgical, Inc.
  23. 23. Implications of SaaS <ul><li>SaaS has some glaring benefits related to costs, scalability, maintenance and mobile access </li></ul><ul><li>There are also some disadvantages </li></ul><ul><ul><li>Need for constant internet access </li></ul></ul><ul><ul><li>Security issues related to storing private data on a vendor’s system </li></ul></ul><ul><li>Software + Services – find the right fit for your needs </li></ul><ul><li>Keys for a successful IT strategy: Cost, Productivity, Collaboration, Competitive Advantage </li></ul><ul><ul><li>Keep these big picture issues in mind and reach your goals through your uniquely chosen path </li></ul></ul>