A short introduction about the Microsoft SaaS market, presented by SaaSplaza. SaaSplaza is an open Platform and Microsoft Incubation Center that brings software suppliers and implementation partners together for the transparent supply of Software-as-a-Service.

1. Software + Services
Agenda:
1. Microsoft‟s odyssey into S+S
2. What about SPLA
3. Major complains about S+S
Herb Prooy
Market Maker - SaaSplaza

2. What is Software as a Services (=SaaS)?
 Customer view:
 Software is running anywhere else, without
investments and I only pay a price per user
per month;
 Technical view:
 Software is running on a scalable,
virtualized „non-dedicated‟ infrastructure;
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3. SaaS is becoming a mainstream choice
The CAGR for on-
demand ERP will be
20% through 2011,
(SMB market will
account for 86%) *
$800
**Millions of US$
$600
$400
$200
$0
2007 2008 2009 2010 2011
Small Business Lower Midmarket Upper Midmarket Enterprise Market
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4. Microsoft‟s odyssey to SaaS
Early 2006
Steve Ballmer stated that Software as a
Service strategy became a cornerstone of the
Microsoft strategy
Channelweb June 4ht 2006 - Steve Balmer:
Microsoft depends on partners to sign up new customers.
quot;There will have to be a business relationship that facilitates
thatquot;
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5. Mid 2006 : Incubation Centers + SPLA
 Appointing 10 SaaS Incubation Centers to
support Partners in their transition;
 Announced the SPLA license program. A bold
step for a dominant software supplier and still
not followed by other established competitors.
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6. 2007 : Software + Services
On the WPC July 2007
Software as a Service redefined by
Microsoft to Software + Services
In the new era of „service disruption‟; it is not only about
the software but more and more about the services.
Web-services but a also added value services.
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7. 2008 : S+S products
 March 2008: Release of CRM 4.0.
 Web enabled, multi-tenant version
 July 2008 :Announcement of BPOS
 Microsoft announce the offering S+S from their
own Platform and invoicing customers directly
 Partner receives 12% +6% kick-back;
 July 2008 : CRM offered from the
Microsoft „Cloud‟
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8. The “Cloud”
Cloud Computing refers to
both the applications delivered
as services over the Internet
and the hardware and systems
software in the datacenters
that provide those services.
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9. Today‟s S+S landscape
Collaboration and Business
Messaging Solutions Applications
ISP‟s & Telco‟s SaaS
Infrastructure
Hardware & Hosters
Software
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10. Microsoft S+S landscape
Collaboration and Business
BPOS
Messaging Solutions Applications
CRM
ISP‟s & Telco‟s SaaS
Infrastructure
Hardware &
Azure Hosters
Software
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11. Understanding SPLA licensing
 On-premise licensing is upfront and C/SIDE and
RoleTailored client access are concurrent user based
 SPLA licensing is per month and C/SIDE and RoleTailored
client access are named user based
 In the on-premise model Software Assurance (BREP) is
optional; In SPLA SA this is included and required
 Add-on base royalty is currently zero
 Some local granules price is zero (Microsoft IP)
 In the on-premise model the price is cost minus partner
margin;
 In the SPLA model price is cost to partner

12. 2007 : Go-to-market
 Webhoster  Exchange
 ASP  Offices
 Sharepoint
 CSP
 Hosting
 BPO
 Platform Prov.
 Rental companies SPLA License
Service
 Streaming Media Customer
Provider
 ISP‟s Hosting fee
 ISV‟s
 Outsourcers
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13. 2007 : Go-to-market
SPLA License
Service
Customer
Provider Hosting fee
Traditional NAV
• What about margin on software?
Microsoft • What about customer ownership
Partner • What about deal-recognition?
• What about support?
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14. 2007 : Go-to-market
SPLA License
Service
Customer
Provider Hosting fee
Traditional NAV
 What about margin on software?
Microsoft  What about customer ownership
Partner  What about deal-recognition?
 What about support?
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15. 2009 : NAV S+S Go-to-market
NAV SPLA
ISV Distributor
NAV
Implementation
Customer
Partner
 Partner owns the customer!
 Partner makes margin on license + infra + services!
 SPLA deal will have recognition!
 Partner will get software support!
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16. 2009 : NAV S+S Go-to-market
NAV SPLA
ISV Distributor
NAV
Implementation
Customer
Partner
 Partner owns the customer!
 Partner makes margin on license + infra + services!
 SPLA deal will have recognition!
 Partner will get software support!
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17. So  Ready to go!
But complains are holding you back!
1. NAV S+S does not allow
customizations;
2. I don‟t make margin on S+S;
3. I can not motivate or pay my sales in an
S+S model;
4. I‟m cannibalizing my own market;
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18. NAV S+S can be customized
Terminal
Terminal
Server
Terminal
Server
Terminal
Server
Server
 Indeed NAV is not web-enabled;
 But a bit ‘multi-tenant’;
 Infrastructure is scalable;
 Customizations in SQL;
SQL-Server
SQL-Server
SQL-Server
SQL-Server
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19. Compensating your sales teams
“Initially, we tried to incent our sales orgs to tackle big accounts
perpetually to offset the cash flow issue. Eventually we made
comp completely neutral. Same commission no matter what the
customer buys. We let the customers decide whether to go
SaaS or On-premises. When the sales comp favored On-
premises, it was a 50/50 split. When we made it neutral it went
to 99% On-demand versus 1% after comp change.”
-- Steve Singh, CEO, Concur Technologies
http://smoothspan.wordpress.com/2007/09/25/interview-
concurs-ceo-steve-singh-speaks-out-on-saason-demand/

20. Incentive scheme
Measuring your sales on:
GrowthQ1 your recurrent revenue per quarter
of Q2 Q3 Q4
On-premise model
Q1 Q2 Q3 Q4
S+S model
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21. Cannibalizing your own market?
Misunderstandings:
 NAV S+S : is not a different product;
 NAV S+S : is not different software;
 NAV S+S is for small customers;
 NAV S+S is a different sale: I need a
different sales organization or different
sales
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22. The Market is for NAV S+S
The CAGR for on-
demand ERP will be
20% through 2011,
(SMB market will
account for 86%) *
NAV S+S Market
$800
**Millions of US$
$600
$400
$200
$0
2007 2008 2009 2010 2011
Small Business Lower Midmarket Upper Midmarket Enterprise Market
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23. It‟s about addressable market
Marketshare ERP (non-enterprise)
MS-Dynamics ERP
Other ERP products
The Fortune
5 million
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24. It‟s about addressable market
Marketshare ERP (non-enterprise)
SaaS ERP Netsuite last quarter results:
•Focused on small & mid sized companies
•Per month 800.000 unique users on their platform
•Annual revenue $ 152.5 mil, a growth of 40,5% MS-Dynamics ERP
•Last quarter, ending Dec 2008 : growth of 30,5% to $ 41,4
Other ERP products
mil. The Fortune spending on hardware &
•In that same quarter the business
5 million
software drops 27,8%.
•350 new customers add‟s in the last quarter.
•With 130 direct sales rep‟s
•Sales cycle varies from 30 to 180 day‟s.
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25. What is the difference?
Or where can you make the difference?
 Customers decide only today when they are sure they see an
immediate pay-back;
 S+S offers you a24 hour delivery of an NAV instance;
 ISV offers immediate (vertical) added value;
 Prepare pre-configured instances;
 S+S offers OPEX no CAPEX!!
 No implementation risks!
 With a rapid implementation approach a customer will see
cost efficiency gains within a month!
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26. 2009 : NAV S+S Go-to-market
NAV SPLA
ISV Distributor
NAV
Implementation
Customer
Partner
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27. Herb Prooy
pr@saasplaza.com
www.saasplaza.com
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