Rackspace Feb 2010 with Text

Aim of Today To help you make better revenue decisions How did we get here from legacy? What are the key differences in SaaS? Revenue Streams available in SaaS Better Revenue = More Profit http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Who am I? Justin Pirie Blogger- This Week in SaaS Community- Run the biggest in SaaS Social Media- #3 in SaaS influence Consultant- Specialise in SaaS product and market strategy http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Why SaaS? Richer user experience Rapid implementation Frequent cycles of innovation Minimal upgrade hassles Always on deployment Subscription pricing Scalability Ray “R” Wang http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

But there’s a catch Beware of the Recurring Revenue Mirage It’s easy when you’ve had $120m in funding... It’s a lot harder to acquire customers that people often think It becomes the classic- market risk as opposed to technical risk http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Legacy Software Business Architecture Is Disconnected Everything Siloed creating Value Separately Little or no outward facing technology http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Legacy Software Customer Ecosystem Companies sold software primarily through traditional channels like Value Added Resellers (VAR’s) VAR’s sold, installed and maintained the software for the end customer Customers were disconnected from the Software Vendor http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

SaaS Customer Ecosystem The biggest change is that the web has become the de-facto delivery method for software Channels haven’t gone- they’re just different Key difference in SaaS is that Customers now produce data as well as consume it and developers produce software as well as consume customer data http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Network Effect Is the KEY DIFFERENTIATOR for SaaS Not just the “obvious benefits” listed before by Ray Wang- they can’t overcome satisfactorily the security, reliability, compliance, ROI arguments Network Effects drive the true ROI of SaaS http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Channels Haven’t gone away completely- just are different Value provided by traditional VAR’s is eroding New type of Channel partner emerging who builds on the ecosystem, creating apps and widgets on your platform- Ecosystem http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

SaaS Business Architecture Is Connected If it’s disconnected, it fails. Marketing has to talk to Sales who has to talk to Engineering who has to talk to IT. Failure to connect leads to very public issues Customer Acquisition Cost is the key indicator http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Network Centricity Intellectual Property Revenue Model Ecosystem Advertising Subscriptions Products Services Ancillary Marketing Technology SaaS Revenue Model Network Effect Revenue Model made up of Revenue Streams http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

At Scale Everybody hates you (like SAP) You become expensive (at least 3x cost of each person) Questionable value if you’re delivering repeatable work that could be automated Doesn’t sit well with the SaaS proposition http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Advertising Have you ever seen a beautiful SaaS app with great UX with Adwords? Yes, Google Apps is cool But Google has $25bn of revenue and $4bn of free cash flow a year, and they’re in the Advertising business- KEY DIFFERENCE http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

The idea that software on the Web is going to be largely funded by advertising is just so wrong-headed, I hardly know where to start. Phil Waineright http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Spiceworks Is a great example of an Ad funded software company They recognise what business they are in- Advertising They have their own ad team and sell to their 125 customers- no adwords! They have 850,000 users and have had $25m in Venture funding over last 5 years http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

But Also Different Recognise that there are also different types of subscription revenue: Pay per use Percentage And others... The key is customers now transact through you- giving you opportunities to align payment and value http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Ecosystem Ecosystem creates lock in for your brand Apps for the Apple iPhone- most successful consumer ecosystem to date AppExchange for Salesforce- pre built integrations making it the de-facto CRM http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

Network Effect The Key Differentiator between SaaS and legacy Software @ray - the aggregated data aspect is often underplayed. To me there is the potential for that to have more value than the application itself. Dennis Howlett http://sixteenventures.com Copyright© 2010 Sixteen Ventures. All Rights Reserved

SaaS Revenue Modeling &Business Architecture +44 (0)7799 625 787 jp@justinpirie.com http://justinpirie.com @justinpirie

Rackspace Feb 2010 with Text

Recomendados

Recomendados

Más contenido relacionado

Similar a Rackspace Feb 2010 with Text

Similar a Rackspace Feb 2010 with Text (20)

Más de Justin Pirie

Más de Justin Pirie (20)

Último

Último (20)

Rackspace Feb 2010 with Text

Notas del editor