1 Selling Hosted Services Customer Benefits John Krzykowski General Manager 19Marketplace
2 Agenda Hosted Services/SaaS Overview Customer Perspective Why They BuyWhy They Don’tMarket OpportunityCase StudyWhat’s in it for You
3 On-Demand Software Overview Hosted solutionCentralized software/hardware management by specialist rather than each customerNo software loaded on customers serversUpgrades includedHosted in tier 1 data centerServices accessed via InternetAccess services from any internet connected device from anywherePriced on a per person per month basisTier 1 Data CenterHeadquartersRemote/home OfficeInternet
4 ASP Versus SaaS What’s Driving SaaS Viability? ASP MODEL SaaS MODEL Software as a ServiceSoftware on DemandHostedApplicationManagement(ASP)Source: Amy Konary, IDC Directions, 2006Private InfrastructurePublic InfrastructureOne-to-OneOne-To-ManyPerpetual LicenseSubscriptionTighter Relationship with End CustomersPredictable, Recurring RevenueUpgrade Applies to All CustomersOne Version of SoftwareCommon Environment for All CustomersMultiple Customers on Same PlatformOne-Time License Fee & Annual MaintenanceComplex Upgrade ProcessMultiple Versions in MarketplaceNeed to Support Multiple EnvironmentsDedicated Infrastructure Per CustomerWhat’s Driving SaaS Viability?Increasing broadband penetrationImprovements in remote access technologiesGeneral increases in computing capacity and corresponding cost reductionsVirtualization technologiesImprovements in technologies for development of web-based applications
6 Customer Challenges – On Premise Software Implementation is time consuming and costlyMaintenance costs unpredictableInitial purchase price is 5% of ownership cost - Microsoft78% of IT Budget Required for Maintenance - GartnerHigh availability & disaster recovery not cost effectiveChallenging accessing software outside the office
7 Why are Business Adopting SaaS? REDUCE COSTSLow cost of entryLower staff requirementsSPEEDQuicker implementationUpgrades included/painlessIMPROVE INFRASTRUCTUREBuilt in disaster recoveryFully redundant
8 Common Customer Objections ResponseLack of customizationReconfiguration capabilitiesSimplifying integrationPoor performanceRedundant architectureIncreased broadband speedsHidden costsFees for SaaS applications clearly statedEasily allocate IT costs to staffScales with businessPoor supportRelatively low switching cost require:Quality supportContinuous product improvementsReasonable fees
10 Market Opportunity On-Demand & Web-Native Applications Analyst 84% revenue growthAcquiring 12,000 new customers a month70% revenue growthIndustry analyst firm Gartner predicts that by 2011, software revenue from SaaS will reach $11.5 billion.AMR Research shows that 78% of its survey respondents are either currently using SaaS or plan to in the near future.A 2008 study from Saugatuck Research indicates 84% customer satisfaction rate for SaaS applications.AnalystProjectionsSMB’s are overwhelmingly the early adopter of On Demand apps. Why? TCO, Quality of experience, and lack of enterprise complexity.
14 Target Profile Staff Business Data Communication Infrastructure Distributed workforce (home office/branch locations) or mobile workforceLimited in-house IT skillsBusiness DataInformation is critical to run their businessLimited or no access to company information while on the road or at homePoor data backup processesNew regulatory pressuresBusiness continuity – tape backupCustomers & SuppliersCorporate officeBranch OfficesHome OfficeOn the roadInformationCommunicationis just as or more important than the phoneUse to share documentsInfrastructureMain office & remote locations have high speed Internet access
15 Case Study Situation Problem 31 employees Construction management firm for major sporting and entertainment complexesProject managers work on site in hazardous environmentUsed as an electronic file cabinetPOP mail service with no backups or wireless synchronization with Blackberry devicesMarketing manager is also IT managerProblemLosing would be disastrousBlackberry devices ineffective - no wireless synchronizationRely on manual data backup process – i.e. it doesn’t happen
16 Case Study Solution Results Hosted Exchange and Blackberry Enterprise ServerImplementation:Preparation: 3 – 4 daysMigration completed in two daysResultsImproved productivityGreater Reliability
17 SaaS Eco-System - SMB Customers Hosted Services Void The Opportunity IT firms own SMB market (< 30 PCs)Clients looking for options to ownershipSaaS gaining traction w/ SMBsCustomersVoidHostedServicesWhat’s NeededCustomer Education – SaaS vs. On –PremiseHosted Services Evaluation/SelectionImplementation
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