Anyone Can Be an “as-a-Service” Model.

FRAMEWORK SERIES: THINGS YOU MAY NOT HAVE CONSIDERED
IN MOVING TO A SAAS, OR ‘AS-A-SERVICE,’ MODEL
Framework Series: Things
You May Not Have Considered
in Moving to a SaaS, or ‘as-a-
Service,’ Model

1
Table of Contents
Becoming an ‘as-a-Service’ Business 2
Misconceptions About ‘as-a-Service’ 2
Keys to Transitioning to an ‘as-a-Service’ Business
• Building the Catalog: What Are We Selling? 4
• Establishing Sales Channels: How Are We Selling It? 5
•
Structuring for Success: How Are We Driving Customers’ 7
Loyalty for Recurring Revenue?
• Leveraging the Right Tools to Move to XaaS: How Are We Executing It? 8
•
Relying on Your Performance Dashboard: How Are We Measuring 9
and Managing It?
Conclusion 10

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Anyone Can Be an “as-a-Service” Model.
There are many examples across a wide variety
of industries today of companies becoming as-a-
Service. You don’t have to be in the cloud or
a digital services business to transform a business
and take advantage of the market trend dominating
the growth landscape for companies of all industries.
Car Insurance
Traditionally, whether you’re driving a car 20
miles or 400 miles a week, you’re paying the same
insurance. But now, especially after COVID, when
cars are driven much less than they previously were,
a new model has evolved. The as-a-Service model
allows customers to leverage the ‘use’ model: if they
are not driving their vehicles as much, they don’t pay
the same insurance, because a car is not as at-risk as
the car being driven hundreds of miles a month.
Becoming an ‘as-a-Service’ Business
“as-a-Service” Is Actually Not a Service Model. It Is a Revenue Model.
Contrary to what many think, as-a-Service is not about how you deliver your offerings to the market.
It’s a way to generate revenue – to grow your current revenue and generate new streams. You can
take any product, service, or business offering that you deliver to your customers and transform it
into an as-a-Service model. In this ebook, we’re going to discuss how to do just that.
The as-a-Service model has changed to ‘pay as you
go,’ with drivers paying for what they consume. So if
they put 100 miles on the car, they pay for that. If they
put on 1,000 miles per month, then they pay for that.
Another model has also been introduced to the
market to replace the standard leasing of cars. In
the established model, a driver gets the car for a set
period of time, and it’s theirs exclusively during that
period, paying a specific monthly amount for that car.
The new model is a subscription for the same type of
car. Drivers subscribe, and they use a car from a pool
of cars of a certain class. Then, depending on use, pay
as they go for X number of hours or X number of miles.
This is a new concept for something that we never
thought could be offered to the industry in an as-a-
Service model.

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In the technology world, Cisco is a great example
of a business migrating to an as-a-Service model.
They used to sell hardware that did different kinds
of networking, security, and data processing, among
other things. Customers paid for the box (and it
wasn’t a small amount of money). They installed it in
their data centers, then paid annual maintenance and
still had to pay for software, upgrades, and a staff to
manage it. Today, companies like Cisco are offering
all of that on a subscription basis, even if they have
to ship hardware to on-premises where customers
put it in their data center. They are still taking
care of upgrading the software, managing the
configuration and upgrades, even upgrading
the hardware as technology advances.
There is no business that cannot be delivered
as-a-Service. Even managed services that were
traditionally human contribution or professional
services, where manpower and man hours used
to be delivered for specific services, are now being
offered as-a-Service, either with ‘pay as you go’ or a
subscription to a specific package with professional
services included.
“
The driving as-a-Service model has created
new flexibility in delivering this service. This
model actually added more customers and
created a new revenue stream.
It also broke the barrier of entry for those
new customers that were interested in the
service but were reluctant to buy.

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Building the Catalog:
What Are We Selling?
The first question to answer is how to
take these services that you used to sell
perpetually or transactionally and make
them available as-a-Service.
There is a transformation that needs to happen
internally so your stakeholders understand
what you used to sell and how you are
repackaging that to make it available for
a monthly or an annual subscription.
Software Companies
If you are selling software, the path to transitioning
to subscription is relatively well navigated. Recreate
or repackage services and list them as items in
catalogs. You define in the catalog what you will
make available to customers and how they would
subscribe to it. You’re changing how you are charging
for your services, regardless of how you deliver
it. Itemize the services you are offering and start
offering them so customers can buy them online,
on a monthly or an annual basis. The process is
redefining how you charge for your services or
your products, deciding how much you want
to charge for that new service, and how you
reconfigure your old perpetual license revenue
to a more budget friendly recurring bill.
Product Companies
For product companies, the route requires more
thought. One route to an as-a-Service model is
to address obsolescence. Take a product that has
a useful life of one or two years, and then a new
model is released that is continuously enhanced
and then replaced by new models later.
Your subscription offering can be at the product
level to replenish upon release. “You get the latest
and the newest every time; if you subscribe, I’ll ship
you the product. I guarantee it.” You guarantee to
update the new model if the customer subscribes. As
long as the customer is paying for that subscription,
every time there is a new model, either depending on
what the product is or the value is, the customer can
ship it back and get the new one or get an upgrade
for it. So when there is a physical product that you
can quantify an upgrade for, or if it has a certain life
cycle, you can re-bundle it on a subscription model.
Your customer benefits because they always have
the newest version, and as the provider, you benefit
because you have secured that customer for life.

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It becomes a win-win situation with guaranteed
recurring revenue, loyalty, and continuity from
those customers, which has much greater value
than just one transaction. It also lets you introduce
a lot of dynamic changes, flexibility, structure,
bundles, discount pricing, real-time reactions
to the market, and lets you compete by making
different offerings, upgrades, and downgrades.
That flexibility allows you to reach a bigger
audience and get much more market share, giving
you the opportunity to reach certain customers
and market segments that you haven’t thought
about before, either because of the entry barrier
or because of the nature of the investment
that’s required.
Now, by turning it into a subscription model, you
definitely have access to a larger audience and
converting more customers.
Establishing Sales
Channels: How Are
We Selling It?
Once you know what your offering is, the next
questions are: How do I sell that? How do I
reach my customers and my audience? How
do I access the market?
Typically, like most industries and most
businesses, you either do that with a direct
model or with a channel model – a channel
of agents, a channel of resellers, or a channel
of distributors with different flavors.
Direct
For direct sales, you need to look at the electronic or
digital commerce side. It’s critical that the customers
can self-manage the service they buy for upgrades,
downgrades, users, packages, bundles, and add-ons
in order to scale. They need to conduct their financial
transactions online, in a portal where they manage
all of this with their own user ID and credentials.
For corporate customers, based on the role of the
user within that company, they can access certain
features and functionality on the channel itself.
Channel
What sits between direct and indirect sales across
the as-a-Service spectrum is a concept called product
led growth. Essentially, this refers to getting people
into your product one way or another, and then as
they continue to use the product, they use more
of it, enabling you to take advantage of the upsell
opportunity. Product led growth is the prevalent
go-to market strategy in the as-a-Service model.

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In this approach, there are three indirect channels
that we see:
• Sales Agent: This is the easiest one to manage
in many ways. A manufacturer might be selling
through a group of agents, and all the agent does
is introduce the customer to the manufacturer,
and then they get a commission based on the
transaction. The agent doesn’t do any billing.
There’s no overhead. For the right type of
business use case, the agent channel is ideal.
We have a number of big providers that use this
model. It does require some enablement, such as
commissioning, but overall, it is a straightforward
model from an indirect partner standpoint.
• Reseller Channel: This is a more traditional
model, but it works well in the as-a-Service
space as well, where a reseller would be buying
the subscriptions by the “truck” and selling by
the “box” to their customers and managing their
own margins. This requires more enablement
from the manufacturer, a little bit more
management, and also requires more operations
on the reseller side. They are responsible for
fulfillment, customer requirements, and service
requests. They may be taking tier one, even tier
two support requests, and they are ultimately
responsible for collecting the cash.
• Marketplace Model/Channel: This is a
relatively new, but fast-growing approach.
AWS marketplace is probably the most
prevalent, Google and then Microsoft. This
gives companies access to a large number of
companies that are part of that community.
Interestingly enough, in some of these models,
the sales people get paid for all of the products
and services that go through that channel.
Then, there is the vendor marketplace. This
is a marketplace in which the manufacturer
may choose to stand up on their own and
invite their strategic partners in to be able to
bundle their products and services with that
vendor or those manufactured products and
services. This drives a ton of value because
all of the transactions that go through these
marketplaces are going through those who
actually are enabling the marketplaces.
There is significant opportunity in this channel,
and we recommend working with somebody that can
help you put together a framework for it. One of the
most successful models that we have seen out there
when you implement a channel is to provide the tools
that the channels need to deliver the service that you
offer. Make them part of the tools in the platform
that you deliver to them and help them use the tools,
because some of them may not have the capacity or the
bandwidth to buy their own infrastructure to do that.
This is one of the keys to successful channel
enablement.

7
Structuring for Success:
How Are We Driving
Customers’ Loyalty for
Recurring Revenue?
One of the strongest benefits of recurring
revenue is the fact that it’s actually recurring,
so as you are going through this journey,
you want to make sure the investment of
recurring revenue impacts the customer and
the customer’s loyalty, and that the continuity
of business is protected and maintained, and
that the process is smooth without introducing
new overheads to manage that continuity
and renewal.
Concepts to consider in planning:
• Contract management that ties the customer
to you as they are using the service and makes
it easy for them to renew. It also needs to,
for the provider, manage that process, the
continuity, and the customer’s attention, in
an easy way. There’s a significant difference
between doing 100 transactions a month in
a transaction business versus doing 100,000
transactions in a month-to -month business.
That is the nature of the recurring and the
subscription business.
You need to make sure that the renewal
processes are automated, that you’re not
having to dedicate manual hours to it. It is
impossible to manage 100,000 renewals in
a spreadsheet, so it becomes overhead, and
the cost of scaling the business becomes
uneconomical. Contract management provides
the right tools that are automated to manage
renewals, because that renewal process can
become very complex. Do I renew on the same
terms? Do I offer some upgrades? Do I take
this as a business opportunity to reach out to
the customer and let them know that we’ve
got new offerings, new services? It is a way to
not only keep the existing recurring revenue
running, but also keep the relationship with
the customer healthy, developing, and growing.
• Take advantage of the opportunity presented
by the renewal. For some customers and some
packages, renewal is an opportunity to upsell,
to make them aware of services that are
related to their subscription.
In the telecom industry, for example, customers
buy an item and are presented with a relevant
offer. What we have selected for that upselling
concept can also become part of the extension
and continuity of the business relationship.
And then you get flexibility. The customer
buys more, they get a discount, and they
extend the contract value or the contract term
by X number of years and get a discount for
that. Or the customer pays a year in advance,
which is a big value to the provider cash-wise
and in terms of loyalty and retention, and the
customer gets a discount. This flexibility in
your tools is key to transforming the business.

Leveraging the Right Tools to Move to XaaS:
How Are We Executing It?
When you change to a subscription model, the choice of tools and platform becomes
more critical than ever because that platform is going to become your revenue growth
tool and dictate your capability to generate ARR. When you think about the full life cycle
of what you sell, you need to think about not only the actual service that you deliver to
the customers but also about the platform that governs your systems:
• Between the accounting system, the CRM,
and the marketing tools, you can quickly end
up having to deal with 5, 6, 7, or 10 platforms,
just to be able to manage this one part of your
business. There are real platforms that can
deliver or offer tools in the same place to
help you manage that transformation.
• Tools exist that can help you manage the
revenue you generate from subscriptions
and monetize the variety of services and
products you may have.
• Automated tools exist that scale with you. You
cannot, with a high-volume business, simply
throw more people at your problems the way
you can when you’re a small company. It can
very easily slip out of control. You need to have
process automation and integration to scale the
business and be able to manage a large volume
of transactions.
• Tools exist that integrate platform-wise with
the technologies and software that you may
be using already for something else, including
accounting ERP and financial packages on one
side and the CRM on the other.
• Native integrations that actually happen
without daily human intervention, so that you
can scale the business and manage it efficiently.
• Platforms exist that are adaptable to your
industry. If you are in the healthcare business,
for example, and you choose a platform
that only works in telecom, you will need
customizations, and the platform may not
work with these changes. When your chosen
platform adapts to your business, you will
have the flexibility of pricing, bundles, upgrades,
channel management, service provisioning,
and delivery logistics.
Tool and platform selection is critical to growing
revenue, automating and scaling your business,
and controlling and being on top of your margin.
8

9
Relying on Your Performance
Dashboard: How Are We
Measuring and Managing It?
It’s critical to focus on design so you can develop an
analytics dashboard that guarantees you have full
visibility into what is happening in the business.
You’ll need:
• A dashboard that covers the revenue side,
identifying sales trends such as which product
and channel is selling, which product has the
best traction, what sector is generating the
most bookings, and any seasonal or market-
driven buying.
• A dashboard for operations, for finance,
and other discrete functions that impact the
business, so that you’ve got immediate visibility
into everything in real time and you can make
the right data-driven decisions at the right time.
• Visibility into the margins in real time, because
the transaction volume is high and the ability
to modify in real time is more critical than ever.
• Tools to control your revenue recognition.
You’re growing not only the income, the
revenue, but also net profit. If you introduce
annual packages and you’re collecting money
in advance, there are compliance issues to
consider, as you recognize your revenue based
on the service delivery. Additionally, there are
standards that you need to comply with so that
revenue recognition is managed correctly in
your compliance in tax reporting, and that you
are accurately reporting and representing your
revenue with tools that ensure it is managed
in the right way.
• Dashboards that are updated in real time.
You cannot only look at monthly data. You
can’t just wait until the end of the month to
know that, at the end of the month, I made this
much margin on my overall business. You need
granularity, visibility into a variety of details,
like what margin is being made on this product
in this sector, or for a specific customer.
• This is how you grow and control growth;
select the right product, select the right mix,
select the right channel. This information needs
to be available along with your revenue reports
and with your billing transactions, so you can
make the right decisions.

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443.333.4100 | info@blulogix.com | www.blulogix.com
Conclusion
‘as-a-Service’ is a revenue model, not a service model.
So even those industries that we initially thought
could not be changed into a subscription model are
now being offered in some form of subscription
model that allows customers to make the decision
about their investments – if they can make an
investment in a technology or a product, which
starts at $1 million dollars, for example, now a
customer can get the same service for $20,000 a
month. You’ve given them the CapEx versus OPEX
investment choice and preserved your revenue
streams. This is why the subscription model is
becoming very attractive to a lot of businesses.
You can practically apply this process to most of the
industries we know today, and given the migration
of business in general to an ‘on-demand’ ‘as-a-
Service’ model, now is the best time to start your
transition to that model. By executing quickly, you
can avoid revenue disruption as your customers
move to more user-friendly models.

Anyone Can Be an “as-a-Service” Model.

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