Upload
flexera-software
View
879
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Flexera Software Presentation from the Cloud Computing World Forum June 21-22, 2011, London
Citation preview
Licensing and Subscription Management to Grow Revenues in the Cloud
June 2011
Dr. Richard NorthingVP of Global Services
2 © 2011 Flexera Software, Inc. | Company Confidential
Agenda
• Cloud Computing Market Segments
• Cloud Revenue Growth Strategies
– Pure-Play SaaS
– Packaged Software
– Device Manufacturers
• Flexera Software
Servers, Networking, Storage
Cloud Computing Market Segments
Cloud ApplicationsSoftware as a Service(SaaS)
Cloud PlatformPlatform as a Service (PaaS)
Cloud InfrastructureInfrastructure as a Service (IaaS)
Packaged Software
App Development
App Development, Web Infrastructure, Data Warehousing
Virtual Appliances for Packaged SW
Intelligent Device ManufacturersVirtual Appliances
S+S: Software + Services
APIs
3 © 2011 Flexera Software, Inc. | Company Confidential
Pure-play SaaS
4 © 2011 Flexera Software, Inc. | Company Confidential
Pure-Play SaaSRevenue Growth Strategies
© 2011 Flexera Software, Inc. | Company Confidential
“Pure-Play” SaaS Providers
Business Challenges
1. Leaving money on the table because of a “one size fits all” approach to offerings
2. Credential sharing abuse – user-based license model vulnerability
Challenges with Building Your Own or Using a CRM System for Entitlement Management System
3. Transitioning to tiered offerings requires tracking and enforcing customer entitlements
4. Homegrown entitlement management systems and spreadsheets fail to deliver revenue opportunity from tiered offerings
5. Tiered offerings require on-going tweaks. Homegrown backoffices cannot keep up and get in the way of revenues.
5
6 © 2011 Flexera Software, Inc. | Company Confidential
0 1%-19% 20%-40% >40% Other
31%
38%
13%
6%
13%
Estimated Revenue Missed Due to “One Size Fits All” Pricing/Packaging
1 – 56% of SaaS ISVs Miss Revenues Due to “One Size Fits All” Packaging and Pricing
What is your estimate of revenues you are leaving on the table because of “one size fits all” pricing/packaging?
Source: Flexera Software online poll of SaaS ISVs, April 2011
56%
7 © 2011 Flexera Software, Inc. | Company Confidential
STRATEGY 1: Package and Price Offerings to Match What Customers Want to Buy
Tiered packaging approach also
helps to fund R&D by having
customers that value premium
features pay extra for them
8 © 2011 Flexera Software, Inc. | Company Confidential
2 – User-Based License Models are Vulnerable to Credential Sharing Abuse
Machine ID: C
Machine ID: A
SaaS Services
Machine ID: B
Some providers are losing 40-60% of potential users to credential sharing
• In this example, the SaaS offering is priced based on named user
• Customer purchases 1 credential but 3 users share it
9 © 2011 Flexera Software, Inc. | Company Confidential
Machine ID: C
Machine ID: A
SaaS Services
STRATEGY 2: Prevent Revenue Leakage Due to Credential Sharing Abuse
Machine ID: B
Machine Identity + Credentials
10 © 2011 Flexera Software, Inc. | Company Confidential
3 – Transitioning to Tiered Packages Requires Tracking and Enforcing Customer Entitlements
Features (5 tiers)Leads
Marketing content
Opportunities
Support Incidents
Reports
Metrics (2)License Model (3)
Annual Subscription
Day Pass
Trial# Users
# GB Documents Stored
A SaaS CRM ApplicationIn this example, a tiered packaging approach will require the SaaS ISV to track and enforce 30 possible offerings based on entitlements
• 5 features • X 3 License Models• X 2 Metrics
11 © 2011 Flexera Software, Inc. | Company Confidential
CR
M S
ystem
Ho
me
gro
wn
To
ol
Sp
rea
dsh
ee
t
En
titlem
en
t Ma
na
ge
me
nt
Syste
m
Su
bscrip
tion
Billin
g S
ys-te
m
Ho
no
r Syste
m
Oth
er
46%
23%15%
8%0% 0%
8%
Source: Flexera Software online poll of SaaS ISVs, April 2011
38%
4 – 38% of SaaS ISVs Use Spreadsheets or Homegrown Tools to Track Entitlements
Which approach best describes how you keep track of customer entitlements? 38% of ISVs use
spreadsheets and homegrown tools to track entitlements
CRM systems cannot cope with complex entitlements though they are used by 46% of respondents
12 © 2011 Flexera Software, Inc. | Company Confidential
4 – Homegrown Backoffices and Spreadsheets Fail to Deliver Revenue Opportunity from Tiered Offerings
Source: Analysis of Flexera Software SaaS product line
For one SaaS product line, 12% of customers were using more than what they had purchased ~$1.7M per year in missed revenues • Leaving entitlements in
spreadsheets and homegrown systems makes it difficult to offer tiered upgrades and take advantage of up-sell opportunities
• “True-up” conversations are almost always painful and rarely recover the full revenue potential
88%
12%
Compliant Customers
Non-Compliant Customers
13 © 2011 Flexera Software, Inc. | Company Confidential
Bandwidth Used
Storage Used
Project(s)
Feature or Modules Used
Other
Enterprise or Site Subscription
Freemium (free basic/paid upgrade)
Per Business Location
Concurrent Seats
Per Transaction/Usage
Named Users
0% 10% 20% 30% 40%
5 – Tiered Offerings Require On-Going Tweaks
Source: Softletter SaaS Report 2010, http://www.softletter.com/Research/SoftletterSaaSReport.aspx
• No silver bullet with respect to pricing model
• SaaS providers will need to evolve pricing / packaging approaches
How do you price your SaaS offering?
© 2011 Flexera Software, Inc. | Company Confidential
STRATEGY 3: Dedicated Entitlement Management System to Drive Revenue and Manage Complex Entitlements
15
Subscription and Entitlement Management
Verify Entitlement
De-provision Users
Up-sell Users
Set up Service Bundles
Provision Users
Gather Usage
Renew Customers
Bill Customer
Entitle Customers
Business Challenges and Strategies
16 © 2011 Flexera Software, Inc. | Company Confidential
Package and price offerings to match what customers want to buy WITHOUT involving engineering
SaaS providers are leaving money on the table because of a “one sizes fit all” approach to packaging offerings
BUSINESS CHALLENGES STRATEGIES
Reducing number of hardware variations (SKUs) to meet diverse needs
Transitioning to tiered packages requires tracking and enforcing customer entitlements.
Homegrown backoffice systems and spreadsheets fail to deliver revenue opportunity from tiered offerings
Tiered offerings require on-going tweaks. Homegrown backoffices cannot keep up and get in the way of revenues.
Invest in a best of breed entitlement management system
Prevent credential sharing abuseSaaS providers are losing 40-60% of potential users to credential sharing
17 © 2011 Flexera Software, Inc. | Company Confidential
Packaged Software IncumbentsCloud Business Models and Growth Strategies
18
Other
Grow revenues by leveraging cloud service providers like Amazon as a channel for your products. Note: Virtualiza-
tion enables cloud provides to flexibly provision your software based on demand
Grow revenues by allowing NEW/EXISTING users to complete compute-intensive tasks faster in the cloud
Grow revenues from UNADDRESSED customers that cannot afford your products because of current pricing
models (e.g. customers looking to use products occasion-ally, which you may not support today)
Grow revenues from EXISTING customers by providing them flexibility to expand/contract usage of products based
on need (e.g. customers that want to expand usage of your products for the duration of a project)
Reduce software delivery, installation and configuration costs for customers
16%
27%
40%
42%
47%
48%
Cloud Computing Will Allow Packaged Software Producers To Grow Revenues And Lower Costs
Source: Flexera Software Virtualization and Cloud Computing Business Model Trends Survey, June 2010
© 2011 Flexera Software, Inc. | Company Confidential
How would you describe your business goals with respect to Cloud Computing? (Check all that apply)
20 © 2011 Flexera Software, Inc. | Company Confidential
Three Cloud Product Strategies for Incumbents
Product Strategies• Software + Services: Augmenting on-
premises software with a cloud based component, which may be monetized separately.
– Examples: Mathworks, Autodesk
• Packaged Software: Allowing packaged software to be deployed in the cloud with either existing or new monetization approaches• Examples: IBM Jazz
• Virtual Appliances: Packaging software as virtual appliances, and monetized with either existing or new pricing models
– Examples: Oracle
Use Case Variations
• Standalone software vs. volume purchase
• Pre-paid vs post-paid
• Public vs Private Cloud
• Virtual appliance vs incumbent packaging
© 2011 Flexera Software, Inc. | Company Confidential
Software + Services: Example 1
21
• Design on the desktop
• Search for parts online (stored in Amazon S3)
Source: Company website
CAD Software: Desktop + Cloud to add more value
© 2011 Flexera Software, Inc. | Company Confidential
Software + Services: Example 2
22
Scientific Computing Software: Desktop + Cloud to Accelerate
Source: Company website
• Program on the desktop
• Compute in the cloud (Amazon EC2)
• Accelerate results
Cloud ClusterDesktop System
Local Servers Performing
Computation
Cloud Servers Performing
Computation
Scheduler
Packaged Software in Cloud: Charging by the hour for EDA software
23 © 2011 Flexera Software, Inc. | Company Confidential
24 © 2011 Flexera Software, Inc. | Company Confidential
Monetizing Virtual Appliances(for Device Manufacturers)
Virtual Appliances
25 © 2011 Flexera Software, Inc. | Company Confidential
• Oracle customers can now license Oracle Database 11g, Oracle Fusion Middleware, and Oracle Enterprise Manager to run in the AWS cloud computing environment.
• Oracle has delivered a set of Amazon Machine Images (AMIs), that can be downloaded from the Oracle site
• Developers can take advantage of the provisioning and automated software deployment in these AMIs to rapidly build applications using development tools such as Oracle Application Express, Oracle JDeveloper, Oracle Enterprise Pack for Eclipse and Oracle Workshop for WebLogic.
Sources: Oracle/Amazon web sites
9000 virtual appliances on the Amazon Web
Services (AWS) marketplace
1400 virtual appliances on the VMware
marketplace
© 2011 Flexera Software, Inc. | Company Confidential
How We View Virtual Appliances
26
A virtual appliance is a software stack packaged as a virtual machine image.
The software stack replaces a physical device.
As a result, it can be:
• Deployed on off-the-shelf hardware
• Upgraded for capability or capacity changes
• Consolidated using virtualization technologies
Virtual Appliances
Citrix NetScaler Virtual Appliances offer same functionality as NetScaler physical devices
Example
Virtual Appliances Physical Appliances
VPX 1000 (1 Gbps)
VPX 200 (200 Mbps)
VPX 10 (10 Mbps) MPX 7500 (1 Gbps)
MPX 9500 (3 Gbps)
MPX 15500 (15 Gbps)
MPX 12500 (8 Gbps)
MPX 10500 (5 Gbps)
Pa
y-a
s-Y
ou
-Gro
w
© 2011 Flexera Software, Inc. | Company Confidential
Business Challenges and Strategies- Virtual Appliances for Intelligent Device Manufacturers
27
Service providers provision capacity to meet peak demand which leads to unused capacity during off-peak periods
Grow upsell/cross-sell revenues by delivering capabilities as software add-ons or on a trial basis
Device manufacturers face eroding margins on hardware products
Transfer hardware costs to end customers by making device capabilities available as pure software
Challenges Strategies
Service providers want to reduce power consumption, space and administrative costs
Consolidate many capabilities into one device
Allow service providers to dial up/dial down capacity on-demand without deploying hardware, eliminating unused hardware
Virtual Appliances enable manufacturers to protect margins, enable cross-sells/upsells and flexible capacity models
Summary
• Cloud computing will transform business models for software producers and device manufacturers
• Business model transformation has many of the needs of on-premises software:
– Monetization of products– Capacity counting/ tracking– Authentication & authorization of use– Usage tracking– Binding to help with compliance
• Best of breed subscription and entitlement management solutions will power the transformation
28 © 2011 Flexera Software, Inc. | Company Confidential
30 © 2011 Flexera Software, Inc. | Company Confidential
• Top 200 Software Company
• Solidly profitable
• 425 Employees
• 80,000 Customers
• 20,000 FlexEnabled Applications
• 200,000,000 PC’s Receiving Software Downloads and Updates
Flexera Software
Statistics Highlights Customer Base
• Market Leader
- Entitlement andCompliance Management (FlexNet Producer Suites)
- Enterprise LicenseOptimization (FlexNet Manager Suite)
- Installation and Packaging (InstallShield, AdminStudio)
SoftSummit offers a comprehensive look at the entire software and device product lifecycle—providing you
with strategies and the know-how to adapt your business to thrive in today’s fast-changing market.
Marriott San Jose ● October 24-26, 2011