SaaS Presentation

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Sheila Brisland Product Manager sheila.brisland@snowdrop. co.uk Software as a Service (SaaS)

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Transcript of SaaS Presentation

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Sheila BrislandProduct Manager

[email protected]

Software as a Service (SaaS)

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Agenda

• Introduction

• What is Saas?

• Some examples

• The market

• Architectures

• Implications for the buyer

• Implications for the service provider

• Questions

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Introduction

• Who are Sage?– Business management software– Worldwide turnover 1,157.6m (2007)– Worldwide employees - 13900– UK turnover 217.7m (2007)– UK employees - 1800– The only remaining FTSE 100 technology stock

• Who are Snowdrop?– HR and payroll software and services– Companies with 100+ employees– UK employees - 200

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Snowdrop software & services

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Snowdrop software & services

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What is Saas?

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Saas definition

Software as a service is a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it. They use it through an API accessible over the Web and often written using Web Services or REST.

Wikipedia 2008

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Saas definition

Software that is:• Owned, delivered and managed remotely by one or

more providers• The application is based on a single set of common

code and data definitions• It is consumed in a one-to-many model by all

contracted customers• It uses a pay-for-use model or a subscription model

based on usage metrics

Gartner Group 2008

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Saas definition

Software applications hosted on remote servers and made available to end users via a Web browser and on a subscription-based business model

Key characteristics:• Network based access and management• Activities managed from a central location, enabling

users to access applications remotely via the web• Applications delivery closer to one-to-many model

(multi-tenant architecture) including architecture, pricing, partnering and management characteristics

Sage Group 2007

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Saas is not:

• Outsourcing - utilising any external agency or organisation to fulfil an element of business management, for instance to man a call centre or run a company’s payroll

• Hosting – provision of access to software installed remotely, probably including data management

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Some examples

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Sage CRM

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Ebay

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Snowdrop HR

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The market

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The SaaS market

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The SaaS market

• Adoption of SaaS varies widely across software markets:– As little as 1% of total software revenue in some markets and

more than 75% in others

• Adoption is highest in applications that support: – simplified, common business processes or

– large, distributed virtual workforce teams

• On-premise sales growing in single figures (9%)• SaaS sales growing in double figures (22%)

Gartner 2007

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The SaaS market

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Architecture

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Architecture

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SaaS stack

Metering & Billing

Subscription& Provisioning

Indexing, App servers, Mobile support

Hardware, Hosting and IT Support

IdentitySecurity Session

Presentation Frameworks

SaaS Applications

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Factors driving adoption

• A shortage of skilled professional resources, within internal IT departments and system integrator organisations

• Painful reminders of lengthy, unsuccessful deployment cycles spur buyers to investigate simpler, quicker alternatives

• Increasing familiarity with the Internet, improvements in security and an increase in broadband availability

• The benefits of rapid deployment, less upfront capital investment and a decreased reliance on limited implementation resources

• Responsibility for continuous operation, backups, updates and infrastructure maintenance shifts to vendors or service providers

• Line-of-business ownership reduces dependency on internal IT

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Market inhibitors

• Concerns about data security and critical customer information

• Initial investment costs required to create an on-demand infrastructure environment restrict new market entrants

• Investments in applications, capital and organizational expertise limit growth

• Complex process requirements constrain adoption of simplified, standardized solutions

• Regulations governing data privacy and protection vary by country and may restrict adoption of some vendors' solutions in certain areas

• An inability for vendors to shift to a service-based model for either architectural or cultural reasons

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Implications for the buyer

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Buyer benefits

• Low cost infrastructure• Low cost of entry & ownership – subscription

model • Rapid deployment • Simplified configuration & customization tools • No ongoing resource requirements for back-end

system management• Access from anywhere - ideal for distributed

workforce• Creates environment allowing collaboration

between many different parties• Upgrades are included and regular• Lower switching costs• Experimentation with emerging technologies is

less risky

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Collaboration

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Buyer issues

• Integration requirements with existing

applications

• Security of data

• Lack of competitive differentiation

• Less ability to negotiate customized contracts

• Weakened IT management control

• More basic functionality in some cases

• New vendor management skills required

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Implications for the service provider

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Service provider benefits

• Low initial cost for users makes buying cycle short• Getting customers to add more users and buy

access to more functionality later is easier– Can start with a simple application

• Leveraging the "long tail” – you can service more smaller customers that are

unreachable at traditional price/performance ratios SaaS thus should feature less complexity at a lower price, offered to large numbers of prospects

• No need to support many older versions• Growing market

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Service provider issues

• For existing software houses:– Organizational implications of moving from a product-

centric to a service-centric delivery model

– Beware cannabilising the on-premise market

• For start-ups:– Cashflow develops over time – building a business is

hard

• For both:– Strong incentive to make adoption as viral as possible

– so usability is key

– Reliability of hosted service is critical

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Session Summary

• SaaS is a growing market

• Most suitable for supporting simpler processes

• Good for distributed processes

• Risky revenue model for start-up businesses

• Good for ‘long tail’ markets

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Questions?