This document discusses best practices for succeeding in the rapidly changing software as a service (SaaS) marketplace. It covers macro trends driving adoption of cloud computing like consumerization, the shortcomings of legacy software, and changing customer needs and expectations. The SaaS market is expanding from business applications to include IT management, vertical industry solutions, and hybrid deployment models. Recent large enterprise deals and government policies indicate strategic adoption of cloud computing. The document provides visual models to define cloud computing and the evolution of customer concerns regarding new service models.

1. Making the Most (Money) with Your SaaS Offering
Webinar Series
Webinar # 1
Best Practices to Help You Succeed in the Rapidly
Changing SaaS Marketplace

2. Best Practices to Help You Succeed in the
Rapidly Changing SaaS Marketplace
Jeff Kaplan Bashyam Anant
Managing Director Director, Product Management
THINKstrategies Flexera Software
© 2011 Flexera Software, Inc. | Company Confidential 2

3. THINKstrategies Strategic Consulting Services
How to Succeed and Thrive in
the Rapidly Changing SaaS
Marketplace – Best Practices
Presented by,
Jeff Kaplan
Managing Director
THINKstrategies
jkaplan@thinkstrategies.com
781-431-2690
©2011, THINKstrategies [www.thinkstrategies.com]
Slide 3

4. Today‟s Perfect Storm
Driving the „Cloud‟
Macro-Market
Challenges
Enabling Shifting
Technologies Customer Attitudes
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 4

5. The Shortcomings of
Legacy, On-Premise Apps
 Deployment Challenges
• 31.1% SW projects cancelled before completed.
• 52.7% of projects cost nearly 190% of original
estimates.
 Operational Costs
• Maintenance & management costs >10x original
license fee.
• Escalating hardware & staff support costs.
• Over provisioning/under-utilization of SW licenses.
 Economic/Budgetary Pressures
• Need to reduce IT costs, increase business benefits.
• Need to increase utilization to gain greater ROI.
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 5

6. Consumerization, Shadow
IT and the Mobile End-User
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 6

7. Changing Customer
Needs/Expectations
Old, New,
 Fixed, Capital Investment  Flexible, Operating Expense
 Complexity, Customization  Simplicity, Utilization
 Centralized, On-Premise  Mobile, On-Demand
 Top-Down Procurement  Bottom-Up Adoption
 High TCO, Low ROI  Rapid Time-to-Value
 Internal Support  3rd Party Services
 Outsourcing Alternatives  Out-Tasking Options
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 7

8. SaaS Expands from Front- to
Back- to Inter-Office Apps
Back Office Front Office Inter-Enterprise
ERP Collaboration Procurement
Finance CRM/SFA Supply-Chain
… … …
BUSINESS APPLICATIONS
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 8

9. SaaS Expands from Business
Apps to IT Management
Back Office Front Office Inter-Enterprise
ERP Collaboration Procurement
Finance CRM/SFA Supply-Chain
… … …
BUSINESS APPLICATIONS
Data Protection Security Network Mgmt
Storage Systems Mgmt Remote Access
… … …
IT Management
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 9

10. SaaS Expands from Business
Apps to Industry Solutions
Back Office Front Office Inter-Enterprise
ERP Collaboration Procurement
Finance CRM/SFA Supply-Chain
… … …
BUSINESS APPLICATIONS
Manufacturing Financial Services Retail
… … …
Vertical Market/Industry-Specific Solutions
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 10

11. Shifting Adoption Patterns
Ad-hoc, Business End- Planned Enterprise-Wide,
User/SBU Adoption; Business-Driven Adoption;
IT Avoided. IT Involved.
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 11

12. Recent Mega-Deals:
SaaS/Cloud Policy Moves
= 500,000 suppliers
“We evaluated a number of alternatives, but Aravo SIM was the best commercially-available solution
capable of meeting our complex, global needs” - SVP and CIO of GE
= 420,000 end-users
"The Enterprise Cloud Computing business model is a strategic direction for
us. It not only lowers IT costs, and creates faster end to end processes, but
can also grow with our requirements both globally and locally.“
- Head of Corporate IT, Siemens AG
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 12

13. U.S. Government View
“I’m all about the cloud computing notion. I look at my lifestyle,
and I want access to information wherever I am. I am killing
projects that don’t investigate SaaS first.”
President Obama’s CIO, Vivek Kundra, WSJ 3/9/09
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 13

14. Moving from SaaS Apps to
Cloud Computing
Cloud Computing
“Top Strategic
Technology for
Services
2010”
But what
does “cloud
SaaS Apps computing”
mean?
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 14

15. Visual Model of NIST’s Cloud
Computing Working Definition
Measured Service Rapid Elasticity
Essential
Characteristics
On-Demand Broad Network
Resource Pooling
Self Service Access
Service Software as a Platform as a Infrastructure as
Models Service (SaaS) Service (PaaS) a Service (IaaS)
Deployment
Models Public Private Hybrid Community
©2011, THINKstrategies, Inc. www.thinkstrategies.com
http://www.csrc.nist.gov/groups/SNS/cloud-computing/index.html
Slide 15

16. Evolution Of
Customer Concerns
Support
Innovation/Competitive Advantage
Complexity
Governance/Compliance/Control
Interoperability/Integration
Security/Privacy
Reliability
Time
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 16

17. Living in a Hybrid World
 Companies prefer choice.
 Businesses seeking combination of
on-demand/on-premise solutions.
 Variety of appliances and applets
becoming available.
 Cross-platform integration possible.
 Cloud location-independence
becoming bi-directional.
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 17

18. A New Level of Value
in the SaaS/Cloud Market
 Dynamic toolkit clearinghouse
 Continuous updates, new ideas
 Real-time, aggregated data
 Meaningful benchmark studies
 Practical best practices forums
 User “Club” w/special privileges.
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 18

19. SaaS Can Redefine
Your Business
Software Business Information
Services Services Services
Vendor Evolution
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 19

20. SaaS, Cloud Computing &
the IT Industry Inversion
Future
The
Services Industry Technologies
Inversion
Past
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 20

21. Biggest ISV Fears:
The Four C‟s
 Cannibalization
 Corporate Disruption
 Customer Confusion
 Channel Conflict
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 21

22. More SaaS Economics
Cumulative Cash Burn
20,000,000
10,000,000
0
Year Year Year Year Year Year Year Year Year
1 2 3 4 5 6 7 8 9
-10,000,000
-20,000,000
-30,000,000
SaaS Perpetual
Monthly payments instead of up-front license fees increase the capital required.
Source: SaaS Capital
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 22

23. Key Development/Delivery
Lifecycle Requirements
User Centricity
Ecosystem of Partners Service Orientation/
Serviceability
Prof.Svs./Consulting
Agile Development
Peer-to-Peer Forums
Online Chat/ Service Delivery
Twitter Infrastructure
Security
Virtual Support
Certifications
‘Try & Buy’ Trials
SLAs
Web/Search Marketing Transaction Mgmt System
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 23

24. Succeeding at SaaS
Land & Build monetization engine.
Expand Develop frictionless processes.
Encourage customer input.
Create simple solutions.
Target business inefficiencies.
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 24

25. Summary:
The State of the Market
v1.0 v2.0
• Focus on individual user • Focus on the enterprise
• Standalone point apps • Scalable, secure platforms
• Horizontal applications • Vertical/industry solutions
• Emphasis on ease of use/price/TCO • Emphasis on added functionality/ROI
• One size fits all, limited customization • Multiple configurations, greater
capabilities flexibility/versatility
• Limited interoperability • Greater integration capabilities
• Cloud only, single direction • Bi-direction location independence
• Proliferation of providers • Industry shake-out & consolidation
• Emphasis on solution • Emphasis on support
• Best-of-Breed Win • Strategic Sources Win
©2011, THINKstrategies, Inc. www.thinkstrategies.com
Slide 25

26. Q&A
© 2011 Flexera Software, Inc. | Company Confidential 26

27. Making the Most (Money) with Your SaaS
Offering Webinar Series
Webinar #2:
How Pricing and Licensing Can Help You Monetize a SaaS Offering
Webinar #3:
Subscription and Entitlement Management Best Practices for Your SaaS Offerings
© 2011 Flexera Software, Inc. | Company Confidential 27

28. Best Practices to Help You Succeed in the
Rapidly Changing SaaS Marketplace
Jeff Kaplan Bashyam Anant
Managing Director Director, Product Management
THINKstrategies Flexera Software
jkaplan@thinkstrategies.com banant@flexerasoftware.com
© 2011 Flexera Software, Inc. | Company Confidential 28