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Agenda Hosted Services/SaaS Overview Customer Perspective

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Presentation on theme: "Agenda Hosted Services/SaaS Overview Customer Perspective"— Presentation transcript:

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

2 Agenda Hosted Services/SaaS Overview Customer Perspective
Why They Buy Why They Don’t Market Opportunity Case Study What’s in it for You

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 Tier 1 Data Center Headquarters Remote/home Office Internet

4 ASP Versus SaaS What’s Driving SaaS Viability? ASP MODEL SaaS MODEL
Software as a Service Software on Demand Hosted Application Management (ASP) Source: Amy Konary, IDC Directions, 2006 Private Infrastructure Public Infrastructure One-to-One One-To-Many Perpetual License Subscription 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 One-Time License Fee & Annual Maintenance Complex Upgrade Process Multiple Versions in Marketplace Need to Support Multiple Environments Dedicated Infrastructure Per Customer What’s 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

5 On-Premise Versus Hosted Services

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

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

9 Market Opportunity

10 Market Opportunity On-Demand & Web-Native Applications Analyst
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. Analyst Projections SMB’s are overwhelmingly the early adopter of On Demand apps. Why? TCO, Quality of experience, and lack of enterprise complexity.

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

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

13 Source: THINKstrategies/Cutter Consortium © 2007
Top SaaS Applications 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% 8% HR Management 38% 20% Web Analytics 30% 18% 12% Real-time Dashboards/Productivity Tools 39% 15% 9% e-commerce 25% 11% Procurement/Supply Chain 10% 6% Compliance/Risk Management SFA (Sales Force Automation) 5% Source: THINKstrategies/Cutter Consortium © 2007

14 Target Profile Staff Business Data Communication Infrastructure
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 Case Study Situation Problem 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 doesn’t happen

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

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

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

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