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