The supply side economics of the software business have changed. While many cloud solutions and services can provide a lower capital investment in moving applications to the cloud, the ongoing costs of operating as a SaaS provider are often overlooked. Software companies still face many challenges today in moving to the SaaS business model, and transforming their business to one of ongoing service delivery. This presentation will explore the key business and technical ingredients for success as a SaaS provider, and you’ll learn why architecture still reigns in the Cloud.

1. How to Fail Miserably as a Cloud Software Provider Jesse Kliza | Apprenda

2. #1 - Leave now, and miss this presentation

3. Kidding!(but seriously, you should stay)

4. Who is Apprenda? “Doctor’s turned patients” Understand the “pain” because we’ve been there Team members with SaaS experience ranging from software architecture to business modeling. Creators of SaaSGrid – The Application Server for Software as a Service

5. Company Overview Mission and focus: SaaS enablement Both as a delivery paradigm and a business model SaaSGrid solves three problems SaaS Architecture Applications are inherently single tenant  multi-tenancy is very difficult to achieve correctly SaaS Operations Applications are not built for web scale  apps can not take advantage of newly provisioned compute resource SaaS Business Applications are not ready for on-demand commercialization  no instrumentation for metering, monetization and billing schemes SaaSGrid is a licensed application server Run it anywhere you want (Amazon, Azure, OpSource, Peer1, Rackspace…) to eliminate infrastructure lock-in

6. What is a Cloud Software Provider? Company that writes software, delivers functionality online Company that takes on customer’s operational burden Company that proves themselves regularly since the “sale” is perpetual

7. The Real #1 – Misunderstand what’s happening to your business Avoid reality that your customers’ former operational burdens are now yours Fail to realize that aggregate demand is now centralized to you Diminish how drastic failures can be Keep the culture the same as a packaged software culture

8. What Does this Mean? The technology is the business Problems are rarely ever isolated to single customers Auxiliary systems are mission critical Provisioning Billing

9. #2 – Be Unreliable Intolerable/unplanned downtime Poor support Software delivery and operations are “out of sync” Lack communication

10. What has implications on reliability? Software architecture Infrastructure capabilities Ability to support web-scale 3rd party service providers

11. #3 – Have Low Adoptability Make it difficult for users to start using your software Make it difficult for users to stop using your software

12. What affects adoptability? Non automated provisioning Inflexible pricing No trials Bad UI/UX

13. #4 - Dismiss the critical importance of margins Ignore that 100% gross margins are a thing of the past Dismiss “scalability” and “efficiency” as problems to deal with later Misunderstand the dynamic of customer acquisition

14. What can make or break margins? Lack of multi-tenancy (or generally poor software architecture) High customer acquisition costs Poorly scaling operations

15. #5 – Don’t Keep Pace With Change Think you can build once, sell always (“green screen software”) Ignore competitive pressures (geography can no longer isolate you from competition) Ignore cultural changes (think “ecosystem play”)

16. How do we “keep pace”? Evolve your software often (i.e., frequent updates) Be the center of your customer ecosystem – they’ll force you to keep pace Buy into the fact that you now own a relationship with your customer, not a revenue stream

17. Is there a single thing you should walk away with?

18. Architecture “Reigns” in the Cloud Business Architecture Operations framework Customer framework Auxiliary support systems Software architecture Delivery efficiency (e.g., multi-tenancy) Scale capability Change flexibility

19. Summary Recognize the culture shift required Don’t be chintzy with your technology; “later” isn’t an option with SaaS failure Treat customers as relationships, not revenue streams

20. Questions? Jesse KlizaDirector of Marketing | Apprenda518-383-2130 x306 jkliza@apprenda.com www.apprenda.com