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Selling Hosted Services Customer Benefits John Krzykowski General Manager 19Marketplace.

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Presentation on theme: "Selling Hosted Services Customer Benefits John Krzykowski General Manager 19Marketplace."— Presentation transcript:

1 Selling Hosted Services Customer Benefits John Krzykowski General Manager 19Marketplace

2 2 Agenda Hosted Services/SaaS Overview Customer Perspective –Why They Buy –Why They Dont Market Opportunity Case Study Whats in it for You

3 3 On-Demand Software Overview Hosted solution –Centralized software/hardware management by specialist rather than each customer No software loaded on customers servers Upgrades included –Hosted in tier 1 data center –Services accessed via Internet Access services from any internet connected device from anywhere Priced on a per person per month basis Internet Remote/home Office Headquarters Tier 1 Data Center

4 4 ASP Versus SaaS ASP MODEL One-Time License Fee & Annual Maintenance Complex Upgrade Process Multiple Versions in Marketplace Need to Support Multiple Environments Dedicated Infrastructure Per Customer SaaS MODEL Tighter Relationship with End Customers Predictable, Recurring Revenue Upgrade Applies to All Customers One Version of Software Common Environment for All Customers Multiple Customers on Same Platform Whats Driving SaaS Viability? Increasing broadband penetration Improvements in remote access technologies General increases in computing capacity and corresponding cost reductions Virtualization technologies Improvements in technologies for development of web-based applications Software as a Service Software on Demand Hosted Application Management (ASP) Source: Amy Konary, IDC Directions, 2006 Private InfrastructurePublic Infrastructure One-to-OneOne-To-Many Perpetual LicenseSubscription

5 On-Premise Versus Hosted Services

6 6 Customer Challenges – On Premise Software Implementation is time consuming and costly Maintenance costs unpredictable –Initial purchase price is 5% of ownership cost - Microsoft –78% of IT Budget Required for Maintenance - Gartner High availability & disaster recovery not cost effective Challenging accessing software outside the office

7 7 Why are Business Adopting SaaS? Low cost of entry Lower staff requirements IMPROVE INFRASTRUCTURE REDUCE COSTS Built in disaster recovery Fully redundant Quicker implementation Upgrades included/painless SPEED

8 8 Common Customer Objections ObjectionResponse Lack of customization Reconfiguration capabilities Simplifying integration Poor performanceRedundant architecture Increased broadband speeds Hidden costsFees for SaaS applications clearly stated Easily allocate IT costs to staff Scales with business Poor supportRelatively low switching cost require: Quality support Continuous product improvements Reasonable fees

9 Market Opportunity

10 10 Market Opportunity 84% revenue growth Acquiring 12,000 new customers a month 70% revenue growth Industry 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. On-Demand & Web-Native Applications Analyst Projections

11 11 Strong Buyers: Large Enterprises But, SMB is catching up Expected Use of SaaS Solutions over next 24 months Highly Likely Likely Not Likely Source: THINKstrategies/Cutter Consortium © 2007

12 12 SaaS Deployment Plans Source: THINKstrategies/Cutter Consortium © 2007

13 13 Top SaaS Applications Source: THINKstrategies/Cutter Consortium © 2007 Implemented SaaS Considering SaaS Selected SaaS CRM (Customer Relationship Management)35%22%14% Collaboration Technologies (i.e. Web Conference, Exchange)48% 26% 19% ERP (Enterprise Resource Planning)28%14%8% HR Management38% 20% 14% Web Analytics30%18%12% Real-time Dashboards/Productivity Tools39% 15% 9% e-commerce25%11%8% Procurement/Supply Chain18% 10% 6% Compliance/Risk Management25%15%9% SFA (Sales Force Automation)15% 8% 5%

14 14 Target Profile Staff –Distributed workforce (home office/branch locations) or mobile workforce –Limited in-house IT skills Business Data –Information is critical to run their business –Limited or no access to company information while on the road or at home –Poor data backup processes New regulatory pressures Business continuity – tape backup Customers & Suppliers Corporate office Branch Offices Home Office On the road Information Communication – is just as or more important than the phone –Use to share documents Infrastructure –Main office & remote locations have high speed Internet access

15 15 Case Study Situation –31 employees –Construction management firm for major sporting and entertainment complexes –Project managers work on site in hazardous environment –Used as an electronic file cabinet –POP mail service with no backups or wireless synchronization with Blackberry devices –Marketing manager is also IT manager Problem –Losing would be disastrous –Blackberry devices ineffective - no wireless synchronization –Rely on manual data backup process – i.e. it doesnt happen

16 16 Case Study Solution –Hosted Exchange and Blackberry Enterprise Server –Implementation: Preparation: 3 – 4 days Migration completed in two days Results –Improved productivity –Greater Reliability

17 17 Void Hosted Services Customers SaaS Eco-System - SMB Whats Needed Customer Education – SaaS vs. On – Premise Hosted Services Evaluation/Selection Implementation The Opportunity IT firms own SMB market (< 30 PCs) Clients looking for options to ownership SaaS gaining traction w/ SMBs

18 18 Revenue Opportunities Implementation Fees –Solution Definition – Trusted Advisor Identify Business Problems Analyze Requirements Selection Process –Project Management –Configuring Service Recurring Revenue –Agent Fees –Private Label

19 19 Hosted Services Advantage Zero Upfront Costs Only Pay for Services as Long as Needed Built-in Disaster Recovery Upgrades Included

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