Transcript Corporate Presentation

Transition to SaaS: The Challenges and
Solutions
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Panelists:
Dani Shomron
SaaS Expert, Calia Consulting
US: 1 888 436 6494/ 1 866 581 2411 (Toll Free)
UK: 08000518866/ 08081681734 (Toll Free)
Audio Conference ID: 30300218
Janaki Jayachandran
Head – SaaS Specialization, Aspire Systems
Moderator:
Date: Thursday, September 24th, 2009
Kanchana Rajagopalan
Time: 12:00 noon ET/ 09:00 AM PT/ 05:00 PM BST/ 09:30 PM IST
Marketing, Aspire Systems
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About Aspire
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Thought leader in Outsourced Product Development
1100+ product releases to date
80+ customers; 475 producteers
63% CAGR over the last six years
Offices in Chennai (India), San Jose, CA, and London, UK
ISO 9001:2000 certified
Awards
Ranked in the top 500 fast growing technology companies
in Asia Pacific for 3 years in a row
Ranked 7th in Business
Today Survey featuring
the Best Companies to
work for in India in 2005
Panelist
Dani Shomron
SaaS Expert, Calia Consulting
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A recognized thought leader on the issue of SaaS, posting his ideas
on ‘Dani’s Perspective on SaaS’ and lecturing to CIOs on SaaS.
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Held positions of VP Service Operations at a number of SaaS startups as well as Business and Operations Manager at Mercury
Managed Services (now HP-SaaS), and has consulted on-demand
companies on service operations and traditional ISVs on the
transition to SaaS
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Co-authored the book ‘CIO Perspectives’ (Kendal Hunt Publishing,
November 2007), contributing the chapter on SaaS and is now
writing a book on SaaS Service Operations.
Transition to SaaS
The Impact on the ISV
Dani Shomron
June 2009
Agenda
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Do or Die
The paradigm shift
Changes across the organization
Recipe for failure
How do we succeed?
Do or Die
• SaaS has become mainstream. Adoption – 76%
• SaaS in no longer a point solution but strategic
• Within five years 95% of ISVs will be delivering software
as a service
• All new S/W will be offered as SaaS.
• Beyond niche markets every ISV will deliver through the
Cloud
• Companies that do not, will become obsolete, irrelevant
• ISVs are getting it – but a ‘me too’ approach will fail
Total Upheaval
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The transition to SaaS is a paradigm shift
Not another delivery mechanism
Selling a Service not a Product
Will affect every silo in the organization
Introduce new functions and entities
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Operations
24X7 support
Service Marketing
Technical Account Managers
SLAs
Engineering
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Modify (rewrite?) architecture
Simpler development – single platform
Support ‘service readiness’
Support scalability & high availability
Release cycles reduced to weeks
Adopt agile S/W development (e.g. SCRUM)
Engineers interact more closely with end-users
QA
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Shorter release cycles
Support single platform (multiple browsers)
Performance and Load testing
Security testing
Test interaction between H/W & S/W
Operations
• New group with responsibility for ‘keeping
the lights on’. 24X7
• Build, manage, monitor, improve.
• Improve uptime, performance
• DBAs, System & Network, App Engineers
• Work with R&D, QA, Sales, Support, PS
• The hub of the offering, process oriented
Customer Support
• User experience, customer sat and success are
paramount
• Therefore support has important role, higher skills,
higher pay
• All IT communications at your doorsteps
• Customer services will switch to a 24X7 mode
• Knowledge upgraded from installation /
maintenance to app level knowledge
• Develop problem resolution skills
Sales
• Substantial changes
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From Elephant hunting to cyber sales
From selling a product to selling a service
From perpetual to subscription
From hunters to farmers
From flying around the globe, wining and dining to closing
deals over the phone
– Compensation up-front to spread over a year or more
– Sales cycles shorten dramatically
• Partners, channels, resellers, SaaS aggregators play a
more important role for maximum exposure
Marketing
• Marketing and Sales become tightly coupled with a ‘Sales
2.0’ approach
• More dependence on automation and lead generation tools
• Guerilla Marketing thru web analysis tools, email
campaigns, newsletters, resource center, free trial
• Less control over what information is available to potential
customers
• Consider building an open community around users and
developers.
Finance
• Revenue stream and revenue recognition will change with
an effect on the company’s financial outlook.
• Financial systems capturing and forecasting deferred
revenue will be needed.
• Billing will become more complex, dealing with metering,
collections, service level compensation and renewals
• New systems will need to integrate with the existing
financial systems.
Professional Services
• Switch from installation and upgrades to
application know-how
• Configuration, integration, reports.
• Most of the work will be done remotely - traveling
time and costs will be reduced
• Education services will drop part of the
curriculum pertaining to installation and
maintenance
Legal
• As the company will be selling a service, Service contracts will be
needed not software contracts.
• New entities: SLAs, renewals and add-on services
• Contracts with service providers such as hosting and ISPs.
Compliance
• How would selling a service differ from selling a product?
• Do you need to be compliant to all the requirements that your
customers are?
• Would you need a SAS 70 certification?
• Would your hosting provider need one?
• All of these are still unclear in this emerging market.
Success is Not Guaranteed
• The more successful the ISV, the more
entrenched in the old paradigm (SAP)
• Not in company’s DNA. Switch from
product to service. Shift of focus to
operations and customer service. Change
the pace of dev and delivery.
• Expect push back - Internal resistance to
change: R&D, QA, Services, Sales. (MMS)
• Fear of cannibalization of existing sales
So How Do You Thrive?
• Paradigm shift – need C&V level commitment to
switch to SaaS model
• Ensure a buy-in at all levels – make it a company
goal - get Sales involved at early stages
• Offer a sub-system as a POC
• Most companies will go thru a hybrid phase
• If possible – spin out company, whether as a
separate entity or conceptually.
• Integrate existing solutions.
• Get help
Summary
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SaaS is here to stay
Transition is akin to a DNA transplant
Expect pushback
Get a full buy-in from key holders
Just Do It! It is worth it – get help
Panelist
Janaki Jayachandran
Head – SaaS Specialization, Aspire Systems
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Currently heads the SaaS Specialization Business unit at Aspire
Systems
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In his current capacity, he is responsible for the business
development and delivery functions focused on SaaS
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Key person in customer interactions and new customer acquisition
by getting feedback and adding value to their business
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Instrumental in defining Aspire’s focus in SaaS and Cloud
Computing. He closely monitors industry trends in SaaS and
collaborates with Aspire’s SaaS CoE to build internal expertise
Agenda
 Feasibility Assessment
 Architecture Aspects
 Strategic Approach
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SaaS Capabilities
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Pushing to the cloud
Feasibility Assessment
LOW
SaaS Benefit Scale
HIGH
Nature of your product
Graphics Oriented
Highly Interactive
Highly Transactional
Typical IMS
Number of
customized source
code versions
0 to 3
4 to 6
7 to 10
>10
Number of current
installations
0 to 25
26 to 100
101 to 250
> 250
Expected business
growth
0% to 5%
5% to 10%
10% to 25%
> 25%
Integration
requirements with
external systems
Very High
High
Medium
Low
Stage of your product
Declining
Matured
Growth
Start-up
Customer acceptance
for remote storage of
data
Not Acceptable
Very Concerned
Less Concerned
No Concern
Current spend on
implementation
Low
Medium
High
Very High
Number of releases in
a year
<= 1
<6
< 12
>12
Current challenge in
selling on-premise
Lack of Features
Customization
Huge CAPEX
Infrastructure
Unavailability
Architecture Challenges
Parameters
Challenges
Scalability
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Design to handle current and future loads
Optimum use of hardware and other resources
Performance
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Response time with/out concurrent users
Bandwidth constraints
Availability
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SLA Compliance
Offline mode of working
Security
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Physical and Network Security
Role based access
Data Encryption
Integration
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Support for in-bound and out-bound integration
Standards compliance (HL7, cXML, etc.)
Extensibility
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Custom field support
Support for dynamic forms
Multi Tenancy
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Single code base
Independent Schema/Shared Schema
Configurability
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Personalization/”Org”analization
UI/Business Rule/Workflow
Auditing
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Entity/Data level tracking
Demystifying the Cloud
Your P
own App.
R
O
Force.com, Google App,
V
Long Jump
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EC2,RAzure, Rackspace
S
Application
SaaS
Framework
PaaS
Hardware
IaaS
Developers, Rapid
Development of
Functionality
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Software Architects,
Tested andEProven
Architecture
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Network Architects, Security,
Hosting
Strategical Approach – Reuse Vs. Rewrite
SaaS
PaaS
Is a concept
Is a software/technology
Defines only the delivery model of your
software
Defines how your software will be build and
delivered
Software is delivered over the internet
with no setup required at the customer
end
Software is build on top of the platform and
delivered over the internet
Allows reusing your content software
Mostly requires complete rewrite of the
software
Can easily support hybrid model (ondemand and on-premise)
Will be very expensive to support hybrid
model
No lock-in on technology/provider
Vendor lock-in
Choosing your SaaS Maturity Level
Cost
Time
Business Volume
Product Size
Maturity Model Factors
Factors
Level 1
Level 2
Level 3
Level 4
Time
Very Low
Medium
High
High
Transition Cost
Very Low
Low
Medium
Very High
Maintenance
Efforts
Extremely High
Medium
Low
Very Low
Scalability
Extremely Poor
Low
Medium
High
Engineering
Skillset
NIL
Medium
High
Very High
Customer Value
Add
High
Very High
N/A
N/A
Very Low
Low
High
Very High
Operational
Efficiency
Considerations for SaaS
 Availability of Technical Skill Sets
 Choose the right maturity model – depending on your immediate and future
business needs
 Level 1 and Level 2 provide more value to customers, where as Level 3 and
Level 4 are intended to provide more value to the ISVs
 Evaluate virtualization as an alternate for multi tenancy
 Leverage pre-built SaaS Frameworks
Ideal Scenario for PaaS
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Focus on functionality rather than engineering aspects
Current software uses legacy technology – anyway it’s time to change
Leveraging vertical/domain support by PaaS providers
One stop solution for SaaS + IaaS
Considerations for PaaS
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Availability of Technical Skillset
Vendor Lock-In
ROI (SaaS Vs. PaaS)
Support for product vertical
Support for Non Functional Requirements
Evaluate platforms that does not mandate complete rewrite Ex: SaaS Grid
Business Risk in storing data at an external location
SaaS Administration Challenges
Capabilities
Details
Tenant Management
• Adding/Removing/Modifying Tenants through software
• Configuration/Customization of features
Metering
• Recording of usage based on License Model
• User based/Transaction based
Billing
• Publish invoices based on metered usage
• Payment tracking
Payment Gateway
• Customers to make online payments
• Integrated with Billing & Licensing
Licensing
• Support for multiple license models
• User based/Transaction based/Data based
Product Analytics
• Usage of features/modules
• Errors recorded/reported
Pushing To The Cloud
Self Hosting
IaaS Providers
Data Centers
Hosting Challenges
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Availability- complying with the SLAs
Physical/Network Security
Back-up of application and data
Internet Bandwidth/Redundant Lines
Storage Capacity
Hardware Scalability
Ease of upgrades
For more details
Dani Shomron
SaaS Expert
Calia Consulting
E-mail: [email protected]
Website: www.calia.biz
For more details
Janaki Jayachandran
Head – SaaS Specilization
Aspire Systems
E-mail: [email protected]
Website: www.aspiresys.com
For more details
Kanchana Rajagopalan
Aspire Systems
E-mail: [email protected]
Website: www.aspiresys.com
Ph. No: +91-44-67404000
Questions