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Cloud & Smarter Infrastructure SaaS 101 - Introduction to Software as a Service (SaaS) for Partners The goal of this presentation is to provide an.

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1 Cloud & Smarter Infrastructure SaaS 101 - Introduction to Software as a Service (SaaS) for Partners
The goal of this presentation is to provide an introduction to Software as a Service (SaaS), as well as lay out C&SI’s SaaS plans for 1H 2014.

2 What is Software as a Service (SaaS)?
Software as a Service (SaaS) is a software delivery model in which software and associated data are centrally hosted in the cloud. SaaS is typically accessed via a web browser. Payment for the service is through a subscription model. You are using SaaS today if you access applications like Facebook, Twitter, or gmail. Consider how we do taxes: In the past you would get the 1040 booklet in the mail from the IRS. You would go to the library to get all of the other forms. Spend a late night putting in the information, double checking the math, mailing a copy to the IRS, and praying you didn’t get audited because you weren’t a tax accountant and the U.S. tax code is very complex. Next, you could purchase tax software from companies like H&R Block or TurboTax. You would get a CD (or maybe download software) to your laptop, enter information, and submit electronically. The software had build in tax accountant intelligence. Your tax data lived on your laptop. Now we have companies like taxslayer.com or TurboTax online. The software lives in the cloud. Your data lives in the cloud. You always have access to the most current tax knowledge. The simplest version is free. Note the change in risk, in where the software resides, in where the data resides, and how you enter & submit your tax form. See the last page in this deck for additional resources on SaaS, Cloud, and utility-based computing

3 What is driving the move to SaaS?
IBM Pulse2013 4/19/2017 What is driving the move to SaaS? Market dynamics and disruptive technologies are driving the shift to SaaS consumption models Developers want Low touch, easy to consume, continuously updated software Cloud Social Mobile Lines of Business want CxOs want Access from anywhere To create new offerings by composing services from multiple providers Predictability Lower costs Quicker business value Embedded Intelligence Developers - 56% of B2B technology buyers seek product info on social sites. These buyers are increasingly influenced by the Developers in the LOB, who have “done their homework” on social sites. Lines of Business - By 2016, 80% of new investments will directly involve LOB execs with LOB leading decisions in more than 50% of those investments CxO - OpEx will reach 50% of the market share by 2013 due to shifting from on-premise to a subscription (SaaS) model. The shift to OpEx allows companies to claim the expense as it occurs, rather than amortize it over multiple years. IT Operations - By 2016, over 25% of high end data center space in the U.S. will be in service provider data centers. Mid-Size enterprises are leveraging SaaS as the model for IT growing cloud consumption from 16% in 2010 to 36% in These off-premise data centers must still be managed. For composable services, think of Google Maps. If you look up a hotel, you get a map. If you look up a person on Google, you see their Wikipedia entry. Mix and Match. Big Data IT Operations wants To manage on-premise, Cloud, and hybrid environments GS202_LeBlanc_v12 3 3

4 … and the decision making process is changing
Decision making power is shifting from the traditional IT buyer to a new audience - the Line of Business owner & practitioner By 2016, 80% of new investments will directly involve LOB execs with LOB leading decisions in more than 50% of those investments 48% discover brands they are not aware of while searching, 24% decide which brand to purchase solely from their self directed digital research  60% of the IT purchase process decision is completed before the prospect engages a vendor CIO CTOs IT Managers IT Operations Manager Data Center Manager Decision Makers Economic Buyers Decision Makers Who is this guy on the bottom left? He is the new influencer. He is likely a millennial (or Gen Y), born in the early 1980s to the early 2000s. He grew up with smart phones, the internet, and easy access to technology. Don’t know something – look it up right now. He or she loves games, new technologies, and flashy things. In many companies, the practitioner is driving something called Shadow IT. The practitioners are finding new, useful software on the web. If it is below their department’s $50K clip level, they convince their manager to purchase it for the department. The IT group was not part of that decision. Lots of different, possibly incompatible software across each department. And what she uses at home or on her phone, she will want to use at work. Microsoft pushed this policy to move from consumer to enterprise with Windows. If you used Windows at home, you would want something similar in the office. Influencers Developers Technical Leaders System Administrators IT Operations Data Scientists Recommenders Practitioners Users *Source: Google & Compete B2B Customer Study, June 2012

5 How can SaaS help? Improved TCO due to lower infrastructure cost
Flexible subscription pricing Minimal upfront investment Continuous delivery of new capabilities allows rapid innovation and access to immediate code fixes Lower risk with try & buy approach Accelerates evaluations and decision making Infrastructure costs – hardware (e.g. servers), software, people Minimal upfront – no servers, no staff. Just try it. Continuous delivery – how often is gmail updated? It could be daily. Try & buy – if you don’t like it, just switch. The less you invest up front, the easier it is to switch.

6 Remember these? The speed of destructive innovation is accelerating
Remember Kodak? They missed digital photos. The iPod was innovative, until people started listening to music (and storing pictures) on their smartphones. Garmin is a fairly new company, making GPS systems. Big market for portable car GPS systems. The problem is they didn’t update … and you could get an app for it. The speed of destructive innovation is accelerating SaaS has already changed the game Don’t be a footnote in the history of computing.

7 Single Digit, Flat, Negative Growth
Traditional competitors have high revenue, but are losing share to a new breed of competitors .. the Digital Engagers New Vendors Double Digit Growth “While the Old Lions fight, the Hyenas are stealing the food” C&SI on the April 2014 TT Study Fiberlink Total revenue 1.3B (without VMWare) New Relic ServiceNow Splunk YTY Growth (‘11-’12) Traditional Vendors Single Digit, Flat, Negative Growth SolarWinds VMWare Commvault EMC CA BMC HP IBM C&SI BMC Symmatec Revenue ($B) 7

8 Market Demands Competition Delivers C&SI Delivers
Ability to progressively add capabilities Leverage existing and new IT investments Pay per use predictability Visibility across the entire “IT Supply Chain” C&SI products integrate across SaaS and on-premise. Consider Monitoring (SaaS) + Application Diagnostics (SaaS) + SCCD (SaaS). You would need New Relic + AppDynamics + ServiceNow to work together to get the same visibility. Competition Delivers C&SI Delivers Niche-level capabilities Narrow delivery model – SaaS only Limited out of the box integrations Limited end-to-end visibility Broad portfolio of capabilities Support for On-Premise, SaaS, or hybrid Seamless integration across multiple offerings Visibility across entire enterprise

9 Learn • Explore • Try • Use (Buy) • Extend • Support
What is IBM Service Engage? A New Way to experience and acquire our on-premise and SaaS solutions IBM Service Engage Learn • Explore • Try • Use (Buy) • Extend • Support New way…. Engages our clients with the right information, demos, and the ability to try & buy --- while you’re off selling to someone else. Very compelling – feedback from analysts and beta customers “this is not your father’s IBM”. for engaging clients and partner via live guided demos available 24x7 to POC your clients … start a POC in 30 minutes, anytime, anywhere your client wants to accelerate the close to extend what your clients are already buying at lower total cost via Software as a Service IBM Service Engage

10 Welcome to IBM Service Engage
Cumulative Data since 2/23/14: 14,877: Number of total visitors to Service Engage website 8,132: Number of unique visitors to Service Engage website 4378: Number of demos run across all payloads starting from Pulse Number of Trials Currently Active on 3/16/14 406: Number of Trials currently provisioned across all payloads Number of Customer Purchases Passport Advantage SCCD: 5 eCommerce None 10

11 How this offering helps User scenarios Typical buyers
IBM Performance Management for Applications and Infrastructure solutions increases your end user satisfaction with complete visibility and control of your application environment. Pain points How this offering helps User scenarios Typical buyers Increasing maintenance costs No end-to-end view of app health Missed SLAs Find the root cause of application problems 90% faster Improve the availability of critical applications by 60-90% with integrated analytics Reduce the length of outages and slowdowns by 50% Quickly identify and resolve a bottleneck Ensure SLA and KPI compliance Manage all types of workloads Prevent outages IT Ops Managers - reduce infrastructure costs LOB Owner - accelerate delivery of new services App Developers - monitor their apps List Price Competitive Differentiators Questions to ask IBM Monitoring (SaaS): $25/month per Average Managed Virtual Server (aMVS) IBM Application Diagnostics (SaaS): $120/ month per Average Managed Virtual Server (aMVS) Flexible delivery options allow for SaaS, on prem, and hybrid environments Integrated analytics for faster root cause analysis and problem resolution Broad application coverage from new cloud based languages to traditional enterprise workloads Do you have apps moving to – or already in – the Cloud, with connections to your data center? Are your app teams decentralizing and gaining independence? Are your app lines of business moving to an OpEx model? The goal of this “eye chart” is to provide something you could post on the wall of your cubicle. Look at “how this offering helps”. These same bullets are on the Service Engage site. 11 11 11 11

12 IBM Workload Automation (SaaS) drives the execution of Business Processes with the lowest TCO across all environments, servers and applications. It offers speed of automation, power to business and precise governance. Pain points How this offering helps User scenarios Typical buyers Need to reduce expenses No resources to build an automation infrastructure Lack of technical know-how hinders automation 30% reduction in execution time of business workloads, resulting in millions of $$$ in savings 90% reduction in labor costs and total control of business SLAs 35% savings in operation costs and improved staff productivity to support additional workloads Get time back by automating your processes - Automate BI & ERP processes in minutes Manage your business SLA’s - Run and monitor workloads wherever you are IT Ops managers - wants to move to a service-centric delivery organization LOB owner – wants low cost solution with immediate benefits, ease of use and scalability to grow with evolving needs. List Price Competitive Differentiators Questions to ask Starts at $70 per 1,000 executed jobs per month Price decrease for larger volumes of jobs 1k - 25k jobs  each 1k job pack is priced at $70/mth 25k - 250k jobs  each 1k job pack is priced at $56/mth 250k – 1,000k jobs  each 1k job pack is priced at $35/mth > 1,000k jobs  each 1k job pack is priced at $21/mth Get started with ZERO investment. Competitors force you to make an upfront commitment. Faster TTV with a ready-to-use application catalog. Competitors need your to reach out to business partners to get started. Powerful and Proven solution : Industry leading technology which offer robust optimization mechanisms to support changing business needs while still maintaining SLAs. IBM’s strong commitment to Open Standards - With OSLC, workload automation is easily integrated with other OSLC-enabled applications like monitoring, ticketing, etc. IT Ops manager: Are you spending too much time & money, building and managing your workload management infrastructure? LOB owner: Is it taking too much time to automate your processes, and monitor them for critical SLAs? The goal of this “eye chart” is to provide something you could post on the wall of your cubicle. Look at “how this offering helps”. These same bullets are on the Service Engage site. 12 12 12 12

13 SmartCloud Control Desk (SaaS) delivers a unified service management solution to simplify business processes, maximize asset efficiency, and improve the end user experience Pain points How this offering helps User scenarios Typical buyers Fragmented service management processes are causing inefficiency No visibility of assets across the enterprise Hard to manage multiple apps on different platforms Reduce IT change related outages by 70% Improve first call resolution rate by 25% Reduce request response times by 60% Lower help desk calls by 80% through end user empowerment and service request automation Combine processes controls with runbooks Synch data across unified domains Get a working environment up and running in hours, not weeks LOB owner: Low cost, quick TTV, ease of use and scalability to grow with evolving needs. IT Manager: Reduce infrastrasture costs List Price Competitive differentiators Questions to ask $99/month per Authorized User $297/month per Concurrent User Consistency – Single offering for both Enterprise & SMB, and SaaS and On-Premise Capability –Provide deeper functionality than competition Integration - With a wide range of IB/3rd party products to satisfy any clients needs Do you want a complete, integrated service management solution that includes configuration, change, asset, and/or license management? Is IT infrastructure support a core competency or an ongoing headache? Are your lines of business moving to a SaaS and/or OpEx model? Entitlement Price $49/month per Authorized User In addition to avg S&S cost of $26//month per Authorized User Note: Entitlement is the discounted price we provide to our existing SCCD clients who wish to move from On-premise to our SaaS offering. They will continue to pay their S&S costs but will receive a substantially discounted rate to move to SaaS. This rate does not include the migration cost which will be a separate services offering. We are building a cost case that shows the benefits over several years, including estimated migration costs. The goal of this “eye chart” is to provide something you could post on the wall of your cubicle. Look at “how this offering helps”. These same bullets are on the Service Engage site. 13 13 13 13

14 Maximo Asset Management (SaaS) reduces the complexity and cost of managing and maintaining enterprise assets, while increasing efficiency in work scheduling and inventory levels Pain points How this offering helps User scenarios Typical buyers Lack of visibility and control over critical assets that affect compliance and business performance Inefficient allocation of work resources Costly asset failures causing increased asset downtime Improve workforce utilization by 10% or more Reduce inventory carrying costs by 20% or more Increase Asset Utilitization by 3% - 5% Consolidated asset and work management system Robust planning and scheduling of work based on criticality of job task and availability of resources Detailed inventory planning to react quickly to changing demand patterns VP of Engineering, CIO, Maintenance Directors, Asset Reliability Officers List Price Competitive differentiators Questions to ask $159/month per Authorized User Scheduler add-on: $40/month for Authorized User license only $477/month per Concurrent User Market leading capabilities in a SaaS model, You no longer have to settle for ‘good enough’ Scheduling & Mobility as integral part of Maximo EAM solution Support all your enterprise assets, including operational technology Ability to transition to 'on premise' if business requirements change Do you want a complete, integrated asset management solution that includes configuration, change, asset, and/or license management? Is IT infrastructure support a core competency or an ongoing headache? Are your lines of business moving to a SaaS and/or OpEx model? Do you want the flexibility of being able to move from SaaS to on-premise (or the other way)? Pain Point: Costly asset failures and reduced operational efficiencies Asset utilization increase % - 5% 14 14 14 14

15 Maximo Inventory Insight (SaaS) – Pre-configured inventory decision support system delivered as a service. Pain points How this offering helps User scenarios Typical buyers Inventory over- and under-stock conditions increase expenses and risk. Inventory management ties up many resources. Reduces inventory holding costs by 15-20% in first year. Increases asset availability and utilization by avoiding parts outages Automatically generates optimal stock replenishment plan. Increase asset utilization and productivity Automatically update Reorder Points in Maximo, at users discretion Predict over-stock and out-of-stock conditions to generate optimal reorder management. Identify stagnant inventory Asset / maintenance / inventory managers List Price Differentiators Questions to ask Based on BOTH inventory value AND # users Inventory value: Up to $100M - $3500/month $100M-$500M - $7500/month Over $500M - $15K/month # Users $100 per authorized user per month Business: Pre-configured, EAM-integrated SaaS-delivered Technical: Multiple analytics, small data collector, pure add-on Do you know how much excess inventory your organization has? How many dollars is your organization tying up in inventory? Do you know the risk in asset downtime due to potential out-of-stock conditions? How many people are involved in inventory management? Pain Point: Costly asset failures and reduced operational efficiencies Asset utilization increase % - 5% 15 15 15 15

16 MaaS360 Mobile Device Management (SaaS) will simplify management, security, and maintenance—across all enterprise devices and all mobile platforms Pain points How this offering helps User scenarios Typical buyers Management and security concerns due to Bring Your Own Device (BYOD) Growing number of new mobile platforms and devices used in the enterprise Need to manage everything from policy to deployment, operations, content, compliance, security and monitoring. Must balance employee productivity, privacy and corporate security. Enroll, provision and configure devices, settings and mobile policy Remotely Locate, Lock and Wipe lost or stolen devices Enforce device security compliance: passcode, encryption, jailbreak / root detection Separate corporate and personal data with a full dual persona container Secure access to corporate mail, calendar, contacts, documents and intranet Secure applications: provide DLP, micro-VPN, remote wipe Enterprise needs to secure mobile devices (Mobile Device Management) Enterprise need to secure, deploy and manage mobile applications (Mobile Application Management & Application Security) Enterprises need to distribute, secure and edit mobile content (Mobile Content Management) IT Operations CIO / CISO Line of Business Application Developer List Price Differentiators Questions to ask MDM - $3/device/month MDM Suite - $5/device/month MAM Suite - $5/device/month MCM Suite - $5/device/month Proven cloud service – with customers Dual persona container Part of IBM MobileFirst strategy and key integrations with Trusteer, Worklight, Qradar and ICS Are you concerned with employees using their own devices to access your corporate network? Does your IT infrastructure embrace, secure, and manage all types of mobile platforms and devices? Do you have automated policies to support the management of your mobile platform? Pain Point: Costly asset failures and reduced operational efficiencies Asset utilization increase % - 5% 16 16 16 16

17 Why is this important to YOU?
Service Engage faster time to value for your clients POC in days not weeks / months with 30 day evals Earn quick wins, close more often, earn more money via 2x ACV (PCO1 & PCO2) Expand your footprint in your accounts using a land and expand strategy Displace competitors, on flexibility, broad capabilities, lack of comparable offer Service Engage puts you and your clients in the drivers seat. Service offers demos, trials, and (eventually) e-commerce to accelerate deal progression. The integrations with other SaaS and on-premise offerings provide the foundation for a “land and expand” strategy. See the later chart. Competitors don’t have hybrid. Nor do they have the extensive integrations. And selling SaaS pays well. Close quicker. Win more often. Take a drive today! 17

18 What is the SaaS Sales Cycle?
Organic & Paid Search Re-targeting Content Syndication Social Media Advertising 3rd Party Practitioner Events Social Casts Digital & Practitioner Marketing Tactics Digital & Practitioner Marketing Tactics IBM Service Engage IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions Sold into LOB business Focus on Business Objectives Time to Market Return on Investment Speed of Deployment Sold into LOB business Focus on Business Objectives Time to Market Return on Investment Speed of Deployment Sold into LOB business Focus on Business Objectives Time to Market Return on Investment Speed of Deployment Learn, Explore, Try, Buy – Service Engage Understand, Explore, Develop, Implement, Confirm & Repeat - Client Value Method (CVM) EXPLORE LEARN Your Client’s Business Problem and/or Objective EXPLORE SaaS capability to deliver “best practice” process & capability TRY Client trials SaaS offering, delivering business process & capability BUY Close the deal Understand Explore Develop Implement Confirm & Repeat Service Engage 30 day evaluation removes the POC dependency, and shortens the sales cycle from weeks/months to days 18 18

19 Choice is something only IBM can offer.
Tremendous opportunities to up-sell and cross-sell It is a huge differentiator that other vendors cannot match! If your customer has this Sell them this Scenario SmartCloud Control Desk (SaaS) IBM Monitoring (SaaS) Detect an issue, automatically open a ticket Netcool OMNIbus Generate alerts when monitored KPI exceeded Business Service Management Improve MTTR for monitored business processes SmartCloud Analytics Predict and prevent problems with insight into patterns and trends present in log files Workload Automation Quickly and easily identify system and application problems that are impacting your workload  Cognos, Datastage, Informatica, Netezza, WebSphere MQ, Platform LSF, Sterling Connect Direct Workload Automation (SaaS) Integrate scheduling needs of business applications like Cognos, Datastage, Netezza,etc. Create alerts for workload problems Open incidents for workload failures IBM Endpoint Manager Trigger automatic provisioning of a desktop Netcool Omnibus Generate tickets based on selected events Tivoli Application Dependency Discovery Manager (TADDM) Use Configuration Information (CI) and relationship data to manage unplanned change Why do burger joints say “Do you want fries with that?” That is cross-selling. Why do they say “Do you want the Meal Combo?” That is up-selling. The good news is you can do both with our C&SI SaaS offerings. This is a brief summary of the integrations for the 3 SaaS offerings – Monitoring, Workload Automation, and SmartCloud Control Desk. Note that all of the offerings in the middle column have on-premise versions Choice is something only IBM can offer.

20 Tremendous opportunities to up-sell and cross-sell – part 2
If your customer has this Sell them this Scenario Netcool Omnibus Maximo Asset Management (SaaS) Generate tickets based on selected events Maximo Inventory Insights Optimized inventory levels through analytics Smarter Cities Link assets to municipal operations Maximo Asset Management Maximo Inventory Insights (SaaS) Leverage Pre-configured inventory decision support system to generate optimal reorder management and obtain insight on “stagnant” inventory Why do burger joints say “Do you want fries with that?” That is cross-selling. Why do they say “Do you want the Meal Combo?” That is up-selling. The good news is you can do both with our C&SI SaaS offerings. This is a brief summary of the integrations for the 3 SaaS offerings – Monitoring, Workload Automation, and SmartCloud Control Desk.

21 Where are the C&SI SaaS solutions hosted?
Active Data Centers - SoftLayer Amsterdam Dallas Singapore All C&SI SaaS offerings are currently hosted in SoftLayer data centers. In 2014, additional data centers will be provided (SoftLayer or partner), based on business needs. IBM plans to invest over $1.2 billion to expand its cloud services operations. The computing services company said Friday that it will build 15 data centers around the world this year to add to the 12 it already operates and the 13 it recently acquired through its $2 billion purchase of cloud computing company SoftLayer last year. Some of the newest data centers to launch are located in China, Hong Kong, London, Japan, India, Canada, Mexico City, Washington, D.C., and Texas. IBM said it plans to have data centers in all major geographic regions and financial centers with plans to expand in the Middle East and Africa next year. IBM said the new investments will give its business clients the ability to place and control their data globally. Emphasize choice. Read more: - vcstar.com

22 What do I need to know about Data Privacy?
Personal data generally includes information relating to an individual -think business card (e.g. names, addresses, home address) In some countries, also includes information about identified partnerships, associations, or corporations. IBM is a data processor, entity that processes personal data on behalf of the data controller, who would be the client responsible for entering the data. In most cases, Passport Advantage agreement covers data privacy for personal data. EU and Switzerland have additional data privacy regulations but have established the ability to create a framework with the U.S for accessing personal data. C&SI SaaS is in the process of obtaining EU Safe Harbor certification. This requires a risk assessment after we Go Live. In the meantime, we have security measures in place to restrict access to EU client data and for IBM non-U.S. employee access to Amsterdam hosting center in order to comply. IBM has an Online Privacy Statement which is another EU Safe Harbor requirement Where is my data hosted and who will have access to it are big issues when the data is in the cloud. You’ll hear about the U.S. Patriot Act and EU Safe Harbor. See the SaaS Center of Competency web site for further details on country-unique privacy requirements

23 Service Engage Sales Center of Competency
The Center of Competency (CoC) serves as a war room to provide resources for sellers to help close SaaS deals. The CoC web site provides the following general information: Overviews FAQs Terms & Conditions Privacy SaaS vs on-premise Competition Pricing ELAs & SaaS Sample User Scenarios Typical sales cycle for a SaaS deal Links to payload info The CoC web site provides the following information for each SaaS payload: Offering Capabilities Scalability & Security issues References FAQs SaaS versus On-premise Dealing with competition Typical Sales Cycle for this payload Pricing, entitlements, trade-ups Terms & Conditions TCO calculators Integrations & Extensions Doing evaluations For IBM Sellers: For Partners:

24 What should I do next? Go to Service Engage, learn about it, provide feedback Learn about SaaS and C&SI’s 1H 2014 SaaS offerings. Approach your top 5 customers with these questions: Does the overwhelming cost of maintaining their infrastructure hinder developing new services that could bring in additional revenue? Do they need to gain access to new capabilities quicker to innovate faster and stay ahead of their competitors? Do they want to lower their Total Cost of Ownership (TCO) ? Determine where your customer wants to be, and how they should get there. Encourage them to test drive Service Engage today Look for opportunities to up / cross-sell Make a SaaS proposal. C&SI Strengths: Customer choice: On-premise, SaaS, integrated experience Integration with broader Service Management capabilities Accelerate sales velocity with Service Engage Unsurpassed breath of capabilities Become an expert at showcasing the value of the C&SI portfolio through Service Engage.

25 Where can I learn more? Working on Q2 enablement schedule Sales Kits:
SaaS sales kit SSW, PartnerWorld See the SaaS updates to these sales kits: Performance Management sales kit IBM, PartnerWorld SmartCloud Control Desk sales kit IBM, PartnerWorld IBM Workload Automation sales kit IBM, PartnerWorld Important web sites Center of Competency – for IBM sellers Center of Competency – for partners IBM Service Engage Software Sellers Workplace (SSW) To learn more about the technologies: Cloud, Cloud computing SaaS: WWW, YouTube 25


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