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Transition to SaaS: The Challenges and Solutions Panelists: Dani Shomron SaaS Expert, Calia Consulting Janaki Jayachandran Head – SaaS Specialization,

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Presentation on theme: "Transition to SaaS: The Challenges and Solutions Panelists: Dani Shomron SaaS Expert, Calia Consulting Janaki Jayachandran Head – SaaS Specialization,"— Presentation transcript:

1 Transition to SaaS: The Challenges and Solutions Panelists: Dani Shomron SaaS Expert, Calia Consulting Janaki Jayachandran Head – SaaS Specialization, Aspire Systems Moderator: Kanchana Rajagopalan Marketing, Aspire Systems For Webinar Audio, Dial in: Conference Line US: 1 888 436 6494/ 1 866 581 2411 (Toll Free) UK: 08000518866/ 08081681734 (Toll Free) Audio Conference ID: 30300218 Date: Thursday, September 24 th, 2009 Time: 12:00 noon ET/ 09:00 AM PT/ 05:00 PM BST/ 09:30 PM IST

2  All phones are set to mute. If you have any questions, please type them in the Chat window located beside the presentation panel.  We have already received several questions from the registrants, which will be answered by the speakers during the Q & A session.  We will continue to collect more questions during the session as we receive and will try to answer them during today’s session.  In case if you do not receive answers to your question today, you will certainly receive answers via email shortly.  Thanks for your participation and enjoy the session! Housekeeping Instructions

3  Thought leader in Outsourced Product Development  1100+ product releases to date  80+ customers; 475 producteers  63% CAGR over the last six years  Offices in Chennai (India), San Jose, CA, and London, UK  ISO 9001:2000 certified Awards Ranked in the top 500 fast growing technology companies in Asia Pacific for 3 years in a row Ranked 7th in Business Today Survey featuring the Best Companies to work for in India in 2005 About Aspire

4 Dani Shomron SaaS Expert, Calia Consulting A recognized thought leader on the issue of SaaS, posting his ideas on ‘Dani’s Perspective on SaaS’ and lecturing to CIOs on SaaS. Held positions of VP Service Operations at a number of SaaS start- ups as well as Business and Operations Manager at Mercury Managed Services (now HP-SaaS), and has consulted on-demand companies on service operations and traditional ISVs on the transition to SaaS Co-authored the book ‘CIO Perspectives’ (Kendal Hunt Publishing, November 2007), contributing the chapter on SaaS and is now writing a book on SaaS Service Operations.CIO Perspectives Panelist

5 Transition to SaaS The Impact on the ISV Dani Shomron June 2009

6 Agenda Do or Die The paradigm shift Changes across the organization Recipe for failure How do we succeed?

7 Do or Die SaaS has become mainstream. Adoption – 76% SaaS in no longer a point solution but strategic Within five years 95% of ISVs will be delivering software as a service All new S/W will be offered as SaaS. Beyond niche markets every ISV will deliver through the Cloud Companies that do not, will become obsolete, irrelevant ISVs are getting it – but a ‘me too’ approach will fail

8 Total Upheaval The transition to SaaS is a paradigm shift Not another delivery mechanism Selling a Service not a Product Will affect every silo in the organization Introduce new functions and entities –Operations –24X7 support –Service Marketing –Technical Account Managers –SLAs

9 Engineering Modify (rewrite?) architecture Simpler development – single platform Support ‘service readiness’ Support scalability & high availability Release cycles reduced to weeks Adopt agile S/W development (e.g. SCRUM) Engineers interact more closely with end-users

10 QA Shorter release cycles Support single platform (multiple browsers) Performance and Load testing Security testing Test interaction between H/W & S/W

11 Operations New group with responsibility for ‘keeping the lights on’. 24X7 Build, manage, monitor, improve. Improve uptime, performance DBAs, System & Network, App Engineers Work with R&D, QA, Sales, Support, PS The hub of the offering, process oriented

12 Customer Support User experience, customer sat and success are paramount Therefore support has important role, higher skills, higher pay All IT communications at your doorsteps Customer services will switch to a 24X7 mode Knowledge upgraded from installation / maintenance to app level knowledge Develop problem resolution skills

13 Sales Substantial changes –From Elephant hunting to cyber sales –From selling a product to selling a service –From perpetual to subscription –From hunters to farmers –From flying around the globe, wining and dining to closing deals over the phone –Compensation up-front to spread over a year or more –Sales cycles shorten dramatically Partners, channels, resellers, SaaS aggregators play a more important role for maximum exposure

14 Marketing Marketing and Sales become tightly coupled with a ‘ Sales 2.0 ’ approach More dependence on automation and lead generation tools Guerilla Marketing thru web analysis tools, email campaigns, newsletters, resource center, free trial Less control over what information is available to potential customers Consider building an open community around users and developers.

15 Finance Revenue stream and revenue recognition will change with an effect on the company’s financial outlook. Financial systems capturing and forecasting deferred revenue will be needed. Billing will become more complex, dealing with metering, collections, service level compensation and renewals New systems will need to integrate with the existing financial systems.

16 Professional Services Switch from installation and upgrades to application know-how Configuration, integration, reports. Most of the work will be done remotely - traveling time and costs will be reduced Education services will drop part of the curriculum pertaining to installation and maintenance

17 Legal As the company will be selling a service, Service contracts will be needed not software contracts. New entities: SLAs, renewals and add-on services Contracts with service providers such as hosting and ISPs. Compliance How would selling a service differ from selling a product? Do you need to be compliant to all the requirements that your customers are? Would you need a SAS 70 certification? Would your hosting provider need one? All of these are still unclear in this emerging market.

18 Success is Not Guaranteed The more successful the ISV, the more entrenched in the old paradigm (SAP) Not in company’s DNA. Switch from product to service. Shift of focus to operations and customer service. Change the pace of dev and delivery. Expect push back - Internal resistance to change: R&D, QA, Services, Sales. (MMS) Fear of cannibalization of existing sales

19 So How Do You Thrive? Paradigm shift – need C&V level commitment to switch to SaaS model Ensure a buy-in at all levels – make it a company goal - get Sales involved at early stages Offer a sub-system as a POC Most companies will go thru a hybrid phase If possible – spin out company, whether as a separate entity or conceptually. Integrate existing solutions. Get help

20 Summary SaaS is here to stay Transition is akin to a DNA transplant Expect pushback Get a full buy-in from key holders Just Do It! It is worth it – get help

21 Panelist Janaki Jayachandran Head – SaaS Specialization, Aspire Systems Currently heads the SaaS Specialization Business unit at Aspire Systems In his current capacity, he is responsible for the business development and delivery functions focused on SaaS Key person in customer interactions and new customer acquisition by getting feedback and adding value to their business Instrumental in defining Aspire’s focus in SaaS and Cloud Computing. He closely monitors industry trends in SaaS and collaborates with Aspire’s SaaS CoE to build internal expertise

22  Feasibility Assessment  Architecture Aspects  Strategic Approach  SaaS Capabilities  Pushing to the cloud Agenda

23 SaaS Benefit Scale Nature of your product Graphics OrientedHighly InteractiveHighly TransactionalTypical IMS Number of customized source code versions 0 to 34 to 67 to 10>10 Number of current installations 0 to 2526 to 100101 to 250> 250 Expected business growth 0% to 5%5% to 10%10% to 25%> 25% Integration requirements with external systems Very HighHighMediumLow Stage of your product DecliningMaturedGrowthStart-up Customer acceptance for remote storage of data Not AcceptableVery ConcernedLess ConcernedNo Concern Current spend on implementation LowMediumHighVery High Number of releases in a year <= 1< 6< 12>12 Current challenge in selling on-premise Lack of FeaturesCustomizationHuge CAPEXInfrastructure Unavailability LOW Feasibility Assessment HIGH

24 Parameters Challenges Scalability Design to handle current and future loads Optimum use of hardware and other resources Performance Response time with/out concurrent users Bandwidth constraints Availability SLA Compliance Offline mode of working Security Physical and Network Security Role based access Data Encryption Integration Support for in-bound and out-bound integration Standards compliance (HL7, cXML, etc.) Extensibility Custom field support Support for dynamic forms Multi Tenancy Single code base Independent Schema/Shared Schema Configurability Personalization/”Org”analization UI/Business Rule/Workflow Auditing Entity/Data level tracking Architecture Challenges

25 PROVIDERSPROVIDERS NEEDSNEEDS Demystifying the Cloud Hardware Framework Application IaaS PaaS SaaS EC2, Azure, Rackspace, Google App, Long Jump Your own App. Network Architects, Security, Hosting Software Architects, Tested and Proven Architecture Developers, Rapid Development of Functionality

26 Strategical Approach – Reuse Vs. Rewrite SaaSPaaS Is a concept Is a software/technology Defines only the delivery model of your software Defines how your software will be build and delivered Software is delivered over the internet with no setup required at the customer end Software is build on top of the platform and delivered over the internet Allows reusing your content softwareMostly requires complete rewrite of the software Can easily support hybrid model (on- demand and on-premise) Will be very expensive to support hybrid model No lock-in on technology/provider Vendor lock-in

27 Business Volume Product Size Time Cost Choosing your SaaS Maturity Level

28 Factors Level 1Level 2Level 3Level 4 TimeVery LowMediumHigh Transition CostVery LowLowMediumVery High Maintenance Efforts Extremely HighMediumLowVery Low ScalabilityExtremely PoorLowMediumHigh Engineering Skillset NILMediumHighVery High Customer Value Add HighVery HighN/A Operational Efficiency Very LowLowHighVery High Maturity Model Factors

29  Availability of Technical Skill Sets  Choose the right maturity model – depending on your immediate and future business needs  Level 1 and Level 2 provide more value to customers, where as Level 3 and Level 4 are intended to provide more value to the ISVs  Evaluate virtualization as an alternate for multi tenancy  Leverage pre-built SaaS Frameworks Considerations for SaaS

30  Focus on functionality rather than engineering aspects  Current software uses legacy technology – anyway it’s time to change  Leveraging vertical/domain support by PaaS providers  One stop solution for SaaS + IaaS Ideal Scenario for PaaS

31  Availability of Technical Skillset  Vendor Lock-In  ROI (SaaS Vs. PaaS)  Support for product vertical  Support for Non Functional Requirements  Evaluate platforms that does not mandate complete rewrite Ex: SaaS Grid  Business Risk in storing data at an external location Considerations for PaaS

32 CapabilitiesDetails Tenant Management Adding/Removing/Modifying Tenants through software Configuration/Customization of features Metering Recording of usage based on License Model User based/Transaction based Billing Publish invoices based on metered usage Payment tracking Payment Gateway Customers to make online payments Integrated with Billing & Licensing Licensing Support for multiple license models User based/Transaction based/Data based Product Analytics Usage of features/modules Errors recorded/reported SaaS Administration Challenges

33 Self Hosting Data Centers IaaS Providers Pushing To The Cloud

34  Availability- complying with the SLAs  Physical/Network Security  Back-up of application and data  Internet Bandwidth/Redundant Lines  Storage Capacity  Hardware Scalability  Ease of upgrades Hosting Challenges

35 Dani Shomron SaaS Expert Calia Consulting E-mail: Website: For more details

36 Janaki Jayachandran Head – SaaS Specilization Aspire Systems E-mail: Website: For more details

37 Kanchana Rajagopalan Aspire Systems E-mail: Website: Ph. No: +91-44-67404000 For more details

38 Questions

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