saas: why does it matter? and how do i get there? - cleverbridge networking event (cne)
Post on 20-Oct-2014
692 views
DESCRIPTION
Doug Caviness, head of SaaS solutions, cleverbridge; Alisher Ishanov, partnership manager, FlippingBook; Jim Kinlan, CEO, TemplateZone; and Stefan Utzinger, CEO, Novastor, discuss opportunities in the SaaS e-commerce market.TRANSCRIPT
SaaS – Why Does it Matter? And How Do I Get There?
A panel discussion
Definition of SaaS – Software as a Service
Gartner definition:
Delivery model:
Pure SaaS model:
Examples:
• Software that’s owned, delivered and managed remotely by one or more providers
• 12+ years old• Previously called “application services provider”
• Single set of common code and data definitions that are consumed in a one-to-many model by all contracted customers anytime, on a pay-for-use basis or as a subscription based on use metrics.
• Does not mean that use of the product is not customizable
• Salesforce.com, LinkedIn, Dropbox
• SaaS share of global software vendor revenues:• 2013: $81 billion (17% of $476 billion)• 2010: $25 billion (7% of $354 billion)
• SaaS will be disruptive in products that comprise about 25% of the worldwide software market (CRM, HR Mgt, IT Mgt, Security).
• Examples of projected market share (2013):• >90%: blogs, wikis, web conferencing, talent mgt, compensation mgt• 50% to 90%: electronic invoice presentment and payment, expense
reporting• 26% to 50%: sales force automation, HR mgt, customer service and
support
• But SaaS is unlikely to replace all categories. For some, SaaS might just complement traditional software.
SaaS Disrupts – How Does it Affect You?
(Source: “Which Software Markets Will SaaS Disrupt?”, Forrester Research)
373% growth
Recent SaaS Acquisitions (sample)
Company Acquisition & Date Amount
Intuit Demandforce (04/12) $424 Million
Facebook Instagram (04/12) $1 Billion
Dell Wyse Technology (04/12) Undisclosed
SAP SuccessFactors (02/12) $3.4 Billion
Oracle Taleo (02/12) $1.9 Billion
LinkedIn Rapportive (02/12) $15 Million
Salesforce Desk (02/12) $50 Million
Recent SaaS Funding (sample)
Company Funding Amount & Date Valuation
Evernote $70 Million (05/12) $1 Billion
SugarSync $15 Million (02/12) Unavailable
SendGrid $21.6 Million (01/12) Unavailable
Zinio $20 Million (11/11) Unavailable
Dropbox $250 Million (10/11) $5 Billion
Box $81 Million (10/11) $600 Million
Spotify $100 Million (06/11) $1.1 Billion
2012
2012
2012
Announced April 24, 2012
Freemium model
Announced April 24, 2012
2012
2012
2012
What’s Driving SaaS – Customer’s Perspective
•Total cost of ownership (TCO)
•Low startup / low fixed costs
•Faster
–delivery of features and functions from SaaS vendors
–time-to-market from ease of implementation
And other factors like:
•Increasing trust in the Cloud
•Connectivity for mobile and other devices
•Consumerization of IT
What’s Driving SaaS – Vendor’s Perspective
• Recurring revenue
• Disrupt industry incumbents
• Lower cost of service delivery or customer acquisition allows addressing new markets (SMB, etc.)
• Complement traditional software
• Consumerization of IT (bypass centralized selling)
• Growth in connected devices
• Funding and valuations (5x Rev vs. 2.5x Rev)
SaaS Changes How You Run Your Business
Metrics• Lifetime Customer Value (LCV)• Churn Rate (Retention)• Upgrade/Up-sell/Downgrade Rates
Billing• Frequency and complexity • Average Order Value (AOV)• Annual value
Customer Relationship• Sales and marketing automation • Analytics• Customer lifecycle management
Product Development & Revenues• Agile development• Open architecture• Smoothing of revenues
Consider the implications of Freemium or other subscription models
How Do I Evolve to SaaS?
Examples:
• Pure SaaS offering (Salesforce.com)
• Sell download as a subscription (Antivirus, etc.)
• Perpetual license + SaaS (QuickBooks Pro Plus, Autodesk 360)
• Hybrid (Dropbox, Adobe Creative Cloud)
• Partnering / white-label
cleverbridge & SaaS
• Growing roster of SaaS clients
• 30% of transactions are already subscriptions
• Most business models supported, including:• Freemium • Upgrades, downgrades, proration• Multi-line subscriptions• Usage-based billing• Microtransactions
• Merchant of Record (you or cleverbridge)
Panel Discussion
Jim Kinlan, CEOTemplateZone
Stefan Utzinger, CEONovastor
Alisher Ishanov, Partnership Manager, FlippingBook
In the Old Days, when Men were
Men we sold it in a box or a big
downloadable file and charged a one
time fee
Thank you
END OF DECK
Why companies select SaaS vs. traditional
What’s preventing more SaaS penetration?
SaaS Models vs. Traditional
Traditional:• 1,000 orders buy again when new product released• Quickbooks example $199 per year
Subscription:• 1,000 monthly subscriptions equals 12,000 yearly invoices• Quickbooks example $24.95 per month, $299 per year
Billing (usage):• 1,000 monthly subscriptions, all different amounts
SaaS Models vs. Traditional
Traditional – download and boxed product • Free trial (30 day limit)• One-time transaction • Success or failure tied to product release and sales cycle• Limited knowledge of consumer’s use of product • Typically limited direct contact or communication with user
SaaS • Freemium or trial (objective is tied to user engagement)• Subscription or other recurring billing that is tied to use• Agile development and smoothing out of revenue stream• Hone analytics (understand and drive use / consumption and upsell)• Sales and marketing automation. • Customer lifecycle management• Network effect and “Winner take all”