The document discusses the evolution of software delivery models from on-premise to ASP to SaaS. It notes that while ASPs aimed to address limitations of on-premise, they still relied on outdated client-server technologies. True SaaS delivers advantages like instant implementations and upgrades, lower TCO through predictable subscription pricing, and the ability for customers to customize without vendor involvement. ServiceNow is highlighted as an example of a SaaS provider that allows full customization, automated upgrades, and a low-cost and flexible financial model.

1. Service-now.com All roads lead to SaaS. Are you ready?

2. discussion points SaaS is software evolution Software delivery variants Comparing ITSM ‘SaaS’ offerings Financial advantages of SaaS

3. mobile evolution

4. mobile evolution

5. Simplicity and Power Increasing Community Served 1997 2008 1992 ITSM evolution 1981 Value & Organizational Reach

6. SaaS is software evolution Software ownership costs pushed to vendor - hardware, software, system security, disaster recovery, maintenance, monitoring Return to core competency - organizations shift resources to core competencies, vendors focus on managing their SaaS More efficient deployment – instant evaluation, more collaboration between vendor and IT organization, much faster deployments Modern, Web 2.0 interface - drive technician usage and better customer interaction with IT Eliminate shelfware & maintenance - pay for what you use Always on current version – version-free software means the latest for the customer SaaS homogeneity costs less – One version for the vendor to support means lower costs for everybody

7. 2007 2008 SaaS adoption doubled in 12 months * ThinkStrategies and Cutter Consortium, “SaaS Market Surging,” Jeff Kaplan, Nov. 13, 2008.

8. Why SaaS adoption doubled * ThinkStrategies and Cutter Consortium, “SaaS Market Surging,” Jeff Kaplan

9. traditional on-premise deployment Details Full ownership Significant implementation Customizable Difficult to upgrade / maintain Examples HP Service Manager BMC Remedy CA Service Desk EMC Infra Software publisher Customer Data Center Application Database

10. application service provider (ASP) Details Procures app and resells service Broker between customer and publisher Focus on ‘out-of-box’ Examples IBM GS HP Services BMC AAS CSC Customer C Software publisher ASP Data Center Customer B Customer A Application Application Application Database Database Database

11. The right idea with the wrong technology High-cost delivery model doomed ASPs Lengthy implementations Resource-intensive upgrades Version and feature lock down Higher cost than on-premise deployments Not compatible with client/server software the ASP meltdown

12. SaaS multi-tenant Details Hosted by software publisher Many customers to one application set Thought to be inflexible Examples Salesforce.com Workday Innotas Customer C Software publisher Customer B Customer A Application Database

13. SaaS single-tenant Details Hosted by software publisher Customers receive their own app and database Auto-upgrades Extensive customization Examples Service-now.com InteQ Eloqua Customer C Software publisher Customer B Customer A Application Application Application Database Database Database Management automation

14. ASP vs. SaaS * THINKstrategies, “CIO’s Guide to Software-as-a-Service,” Jeff Kaplan ASP Attributes SaaS Attributes Resold legacy applications New net-native applications Retained perpetual licenses Subscription model Difficult to upgrade New functionality delivered regularly Customized Configurable

15. The Internet is the development and delivery platform Quick, flexible implementations Frequent, vendor-managed automatic upgrades Customer has direct control of application changes and customizations Extensive customer customization preserved through upgrades Simplified, predictable subscription license No infrastructure or application maintenance why SaaS is different

16. application comparisons Question SaaS ASP Demo right now! ✓ ✖ Proof of Concept within minutes ✓ ✖ Implement in less than 30 days ✓ ✓ Auto-upgrades within minutes ✓ ✖ Users customize with little effort ✓ ✖ Net-native, Web 2.0 ✓ ✖ Predictable subscription licensing ✓ ✖ Maintained by the app experts ✓ ? Hosted by vendor / partner ✓ ✓

17. ITSM vendors and delivery models Client/Server ASP SaaS Vendor License model Perpetual Perpetual, Subscription Subscription Hosting and administration Customer 3 rd party or vendor Vendor Customization Customer, vendor or partner 3 rd party or vendor (fee-based) Customer Upgrades Customer, vendor or partner 3 rd party or vendor (fee-based) Vendor (included in subscription)

18. HP ‘SaaS’ for Service Manager NOT new technology - simply offering Service Manager 7 via ASP HP services or 3 rd party partner provides bodies to administer the system Viewed by HP as a mid-market or enterprise solution Assumed licensed by subscription Stalling the market to retain customers

19. HP deployment Usually hosted in HP data center Minimal two week installation Includes HP Implementation Accelerator which requires: Predefined data – categories, codes, users, roles, CIs and ‘smart indicators’ Process/procedure descriptions Required technical account manager

20. HP marketing Shorter time to market HP offers solution management expertise System to run in professionally managed data center, manned 24x7 ‘ SaaS’ mitigates customer risk “ Transition to an on premise deployment when you are ready”

21. what HP is not telling you Scoped as a traditional implementation Lengthy implementation period with $25K conversion fee for legacy customers Customer locked into ‘out-of-the box’ functionality Highly disruptive upgrades remain – customer still pays for time and effort ASP must make system customizations resulting in lengthy change cycles Cost of technical account manager passed on to customer Highly complex licensing model with additional costs for integrations, employee self-service, reporting, knowledge… HP ’s one ‘SaaS’ reference customer is…HP

22. BMC Remedy ASP or MSP Managed and hosted by a partner Remedy Application Administration Service does not currently claim SaaS Software implementation Designated services team for system management Application monitoring Global support desk Application health Check

23. ca ‘SaaS’ Not currently offering Service Desk Manager in ‘SaaS’ model CA announced Clarity Project Portfolio Management is offered via SaaS but competition calls it ASP

24. four magic questions Questions to ask your ITSM vendor ASP response Service-now.com response Can you set up a proof of concept or trial demo in minutes? If offered, a dedicated demo instance will take a couple of weeks to implement. Service-now.com can provide a dedicated demo instance in a matter of minutes. How can I customize the offering? All customization requirements must be submitted to the ASP – you do not control when or how customizations will be implemented. Customize to your heart ’s content with the guarantee your changes will be preserved through all upgrades. How often will the product be upgraded? Can you outline upgrade process for me? Expect an 18 month delivery cycle with a highly disruptive upgrade. Receive new functionality three times a year through our automated upgrade process. How is a hosted version of your software more cost effective than an on-premise version of the software? Your TCO will be much higher. ASPs use the same old client/server technologies with a Web front end. The only difference is that the ASP is managing the application. You will pay for the additional service. SaaS delivers higher levels of automation, not more bodies. Economies of scale allow us to deliver one low price, while auto-upgrades and Web 2.0 functionality reduce your management costs and increase your effectiveness.

25. three follow-up questions How is the system administered and who is involved? How do I change or customize the application? Can I speak with one reference using your ‘SaaS’ product?

26. ASP ain ’t SaaS Highly complex, rigid ITSM applications Require higher cost, specialized resources No customer references 18 month roadmap with little new functionality Archaic and complex UIs and process flows reduce adoption Very difficult to get information for reporting Vendors pushing “OOB” best practices Not possible to customize the application No flexibility to map to customer processes - dependent on ASP to make changes Technology impedes IT service and business success High cost Excessive licensing costs with multiple dependencies High-cost consulting fees for implementation, customization and upgrades High-dollar integration efforts that break during upgrades or system changes

27. the Service-now.com advantage Spend less money Go with the visionary Do business your way Provide better service Be more efficient Get promoted! Enjoy a truly integrated system

28. ability to execute Attribute Proof Points Unprecedented implementation success 82% of our customers are in production. The rest just signed up. Unprecedented upgrade success Every customer has the most recent version. 4,200 successful upgrades last year. Global 24 x 7 customer support Live development support 24 x 365 for P1 20 x 5 for P2 and P3 Global coverage / local support Proven implementation and support capabilities Solution used in more than 100 countries Localized in English, French, German, Spanish, Italian, Chinese and Portuguese 99.97% Availability History of better than 99.97% availability. Application runs in a highly secure SAS-70 Type II certified data center.

29. financial advantages

30. financial differentiation Hosted model, low entry cost - nothing to own, monitor, manage or upgrade; fastest and lowest cost implementation in the business Subscription licensing, no maintenance fees - covers software, management and monitoring, upgrades, patch deployments Investment security - phased implementation, add licenses as needed, all customizations preserved, intuitive applications ensure the application is fully used Auto-upgrades - eliminates resource consumption and consulting costs Cost predictability - no need to budget for upgrades, patches, maintenance; predictable annual licensing costs Flexible deployment options - we can host or you can deploy in your data center; either way, it ’s SaaS! Really simple licensing – one price per IT process user; reasonable subscription license means RBI (return before investment)

31. software costs SaaS Legacy Software capital no 15% - 35% of license MSRP customer expense and responsibility hinders upgrades, forces processes operational yes no fees Redistributed back to the business automatic all customizations preserved OpEx vs. CapEx Predictable Maintenance fees Soft-costs Upgrades Customization customer responsible for infrastructure

32. six year TCO 300-user environment ITSM Software as a Service SIX YEAR TCO: $1.3M Annual subscription: $1.2M 300 process users Software maintenance fees: $0 Included in subscription Consulting: $45K Flat-fee implementation, auto-upgrades Training: $2K No charge for Admin training People resources: $67K Administration Infrastructure: $0 Provided by software publisher Legacy ITSM Software SIX YEAR TCO: $5.7M Initial software purchase: $1M 300 process users Software maintenance fees: $1.8M 18 – 35% of purchase price annually Consulting: $1.2M Implementation, upgrades, ongoing Training: $52K $8,800 annually People resources: $1.6M Implementation, admin, upgrades Infrastructure: $100K Hardware, software, data center

33. predictability vs. volatility $ Year 1 Legacy tools Software as a Service Year 2 Year 3 Year 4 Year 5 Year 6

34. vendor evolution Who ’s next? ?

35. wrap up Subscription models offer ultimate flexibility and low entry costs SaaS is software evolution that substantially reduces costs and increases productivity IT shops that have been successful with SaaS have altered culture and business mindset

36. questions and answers