Migration from ISV toward SaaS

From ISV to SaaS

<<<<datum>>

Ruud Ramakers

r.ramakers@mitopics.nl

Onafhankelijk IT-advies vanuit de combinatie van technische, bedrijfskundige en juridische expertise

Change the value proposition

Surviving the Cloud

Key questions

1. Why is migration toward SaaS important?

2. What makes SaaS different?

3. What are the key issues to focus on?

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Content

What is SaaS? What is different in the delivery model? Why should a ISV migrate? How to make migration a succes?

Economics / leadership Organisation Technology Operations Sales / marketing Culture

Key take aways Conclusions

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Definition

Software delivery via the network / Internet Service on demand Webbased Pay per use Hosted / part of the cloud

Software as a Service (SaaS, typically pronounced 'sass') is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or download the application to the consumer device, disabling it after use or after the

on-demand contract expires. The on-demand function may be handled internally to share licenses within a firm or by a third-party application service provider (ASP) sharing licenses between firms

SourceWikipedia

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SaaS Market Drivers, Size & Growth

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SaaS evolution / Disruptive innovation

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SaaS Maturity

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SaaS part of the Cloud

• Companies host applications in the cloud that many users access through Internet Connections. The service being sold or offered is a complete end-user application.

User Level“software as a service”

• Developers can design, build and test applications that run on the Cloud provider’s infrastructure and then deliver those applications to end-users from the provider’s servers

Developer Level“platform as a service”

• System administrators optain general processing, storage, database, management and other resources and applications through the network and pay only for what gets used.

IT Level“Infrastructure as a service”

DIFFERENCES IN SOFTWARE DELIVERY MODEL

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Comparison of Software Delivery Models

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Comparison of Software Delivery Models (cont.)

REASONS FOR MIGRATION

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SaaS Market Drivers, Size & Growth

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Advantages SaaS for vendor

Sales• Earlier sales,• Shorter sales

cycles• Upselling

possibilities• More market

potential

Customer relationship• Partner in succes

of your customer• Be awere of

problem before customer knows

• Keep continuously in contacty with customer

Product• No hassles of

installation, configuration, manage and update at customers site

• Guaranteed Version Control

• Absolute access control

• Direct Feedback• Insight in usage

of software• Easy to offer

extra third party online services

• Shorter development cycles

Finance• Regular cash

flow• Single cost of

deployment• Additional

revenue possiblities

• Predictable revenue stream.

• No Illegal copies

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Advantages SaaS for Customer

• Back to Core Business (knowledge, focus, responsibility, investments)

• Time-to-Market (Easy test drive, quick to implement)

• Lower up-front costs & Total Cost of Ownership (pay as you go)

• Vendor accountability (managing upgrades, bug releases and initial deployment setup, licensees)

• Low switching cost (although subtle data lock-in effects are real)

• Flexibility• High availability • Integration with other online services

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HOW TO MAKE MIGRATION A SUCCES?

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Economics / leadership / strategy (1)

Executive support Funding / aproval Change business model /Profitable strategy Search for market niches / Identify new business

opportunities beside current business Be flexible /Continuously measure your success

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Economics / leadership / strategy (2)

Think big, size matters Every business aspect is involved Don’t forget the infrastructure Fight your battles Watch out for

quick fixes dual models

Start now, be a player

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Organisation (1)

Manage and plan the transition Organise new partners Market driven Sales (focus on costs) Focus on cursomer service

Responsible for churn Must have a dedicated customer success team The power shift has moved to the advantage of the buyer SaaS vendors must focus on renewals separate from sales

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Organisation (2)

Implemantation Gap Analyses Best pratices templates Crowd source Fased implementation Smell the roses

Cultural change Learning organisation, plan for learning Make organisation flexibilble Flexible product launch Focus on marketing not on technology What is your sweet spot?

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Technology

Strategy Managing R&D transition Multi-tenancy Integration Customerization Automated testing Architect /Database design Continuously innovation / releasing Measuring features / billing / BI Single Sign on / automatic provisioning Focus on infrastructure

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Operations

Security Service SLA’s Own Infrastructure? Back up and recovery Defining Metrics (like e.g. ARPU, Churn etc) Continuously innovation Business processes / service processes.

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Sales / Marketing (1)

Sales Marketing most expensive Focus on costs

Request optimal distribution strategy New partners Web / telesales Communications

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Sales / Marketing (2)

Bonus Renewals No Island Customer success Ease of use Service

Sharp prising Demo online Online provisioning Free trial

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Cultural Challenges

New Identity Community Collaboration Cultural evolving Product Mentality towards Service Mentality Compensation / motivation

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Key questions

1. Why is migration toward SaaS important?

2. What makes SaaS different?

3. What are the key issues to focus on?

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Take Aways (1)

More than putting application on Web Think Web, focus on strategy for product development Identify gaps True Multi-tenant Get your Architecture right upfront.

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Take Aways (2)

Creating all SaaS envirnment requires significant effort, plan for it, learn from it

Focus on your strength, source out. It’s a cultural change Economic leadership Hosting alternatives abound. Focus on Ad-ons (monitoring, billing, etc.)

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Conclusions

Economic Leader / sponsorship SaaS is here to stay Think Web Partner in customer success SaaS is a different ball game There is no magic, just a learning curve Build vs Buy

Questions?

Per e-mail: r.ramakers@mitopics.nl

Other Information Nieuwsbrief: nieuwsbrief@mitopics.nl Internet: www.mitopics.nl