saas business principles * copyright thomond technology

SaaS Business Principles

04/12/23 Copyright Thomond Technology

SaaS Applications Are Here and Real


Managing a SaaS Business

SaaS Business PrinciplesSaaS ChallengesFinancial MattersMarketing SaaSTelemarketingSelling SaaSAttrition & RenewalsSaaS and AlliancesSupporting & Consulting SaaS


Talk on First Three Today




Pay as you go • Monthly subscription as the pricing basis• But does not need to reflect contract

Customer Success• It’s a Service not a product

Have employees to educate/talk to prospects• If Not, then build it and they WILL LEAVE

Accept Attrition as a factRenewals are criticalMulti Tenant / Single Tenant ArchitectureShared Risk – Opex not Capex



Ease of UseTime to Value is significantly betterBi-Furcated Distribution model on company sizeHub Based SellingFree Trial for appropriate time period• Must be supported by rigorous process

Data Export Facility so that Customers feel they can easily get their data back



Seed and Grow (be willing to start small)Be Open about Availability and Performance of ServiceAnnual Contracts/Size for DiscountManage Business metrics on a Monthly basisSupport is part Service PriceMultiple Service offerings differentiated by users/ functionality



Service Integration with other SaaS / On-Premise systemsService is Multi Lingual/ Multi CurrencyWebinars for Education / Soft SellingMultiple small events for Customer meetings / Viral MarketingPublic Privacy Statement on all WebsitesPublic Terms of Use on all Websites


SaaS Challenges

Takes a long time to be profitableGenerating Cash flow can be difficultDifficult to have multiple distribution channelsSystem Integrators make less money versus on-premise solutionsSLA (Performance, Reliability, Security etc.)Low Market Acceptance of SaaS / Cloud Computing


SaaS Challenges

Hybrid Competitors trying to confuse positioningData ProtectionAttrition – • manage and model

RenewalsCustomers are used to being regularly visited by traditional sellers


Financial Planning in SaaS

Revenue Model Σn = n(n+1)/2• Invoiced• Deferred Revenue • Off Balance Sheet

Pricing by unit per month• Base Price• Multi Service Offering• SMB to Enterprise Offering

Profile of New Business versus Add On is very different from traditional model



Annual ContractsMulti Year ContractsWhat is the correct discounting Strategy?Contribution by market segment• Cost per order €• Start at SMB, Enterprise or Both

Is there an indirect model that is more effective than direct option?



How many Sales people are appropriate• OTE, Quota, • One size doesn’t fit all

What level of supporting resources (Ratios)• Sales Engineers – In Country• Sales Engineers – Hub• Inbound Telemarkeing • Outbound Telemarketing



Cost per lead• By Source, By Market, By Campaign

Pipe to Spend• By Source, By Market, By Campaign

Number of new business leads per sales group• (((Quota * 0.8 * No. Of AEs * % New Business) /

(Average Deal Size))/ Conversion Rate)


saas business principles * copyright thomond technology

Documents

saas attrition renewals

consulting saas

saas cost

saas applications

saas business principles

copyright thomond technology

saas revenue modeln

business metrics