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Transcript of SaaS: The Business Opportunity Karl Roe Partner Hosted Services – Middle East & Africa Microsoft...
SaaS:The BusinessOpportunityKarl RoePartner Hosted Services – Middle East & Africa
Microsoft [email protected]
Agenda
SaaS Opportunity
SaaS Enablement Programs
Connecting The Ecosystems
Q&A
SAAS OPPORTUNITY
Software-as-a-Service Defined
S o f t w a r e D e l i v e r y M o d e l s
Traditional Software Software as a Service
On Premise In the Cloud
Centralized Decentralized
Large Upfront Cost Pay As You Go
S o f t w a r e - a s - a - S e r v i c e B u s i n e s s M o d e l
Application Hosting Net-Native Software-as-Services
Perpetual License Subscription
One-to-Few One-to-Many
Private Infrastructure
Public Infrastructure
Source: Software On Demand’s Impact on the Software Industry: Transformation, Extinction or Rebirth?; July 2005
Source: U.S. Software On-Demand Delivery Model 2005–2009 Forecast; IDC #33493 June 2005
SaaS vs. Software+Services
1st generation “SaaS”:All about the browser
2nd generation “Software+Services”:Weave together hardware, software and services to build a specific solution…
2005 2006 2007 2008 2009 2010 2011 $-
$2,000,000,000
$4,000,000,000
$6,000,000,000
$8,000,000,000
$10,000,000,000
$12,000,000,000
$14,000,000,000
$16,000,000,000
WW Software on Demand Revenue 2005-2011:Comparison of May 2006 & March 2007 Forecasts
May 2006 forecast March 2007 forecast
SaaS Market Opportunity IDC’s position
Source: Worldwide Software on Demand 2007.2011 Forecast: A Preliminary Look at Delivery Model Performance, IDC #206240 March 2007
IDC believes establishing partnering relationships and
focusing on ecosystemdevelopment will be key to maintaining software-on-
demand adoption and growth.
SaaS Application UptakeProminent SaaS applications
Note*: Sample size: 42, Respondents’ profile: Software decision makers at companies of all sizes that are currently piloting or using SaaS, Geography: Europe
Source 1: Forrester The State Of Enterprise Software Adoption In Europe Jan 2006
Companies (incl. SMB’s) using or piloting SaaS software applications, HR , messaging, security and supply chain management all
top customer relationship management (CRM) in adoption.
Last year, respondents were much more likely to adopt SaaS for ERP (31%) and CRM (27%):
CRM has in fact grown by 11% while ERP remained static.
Other
Enterprise resource planning (ERP)
Customer relationship management (CRM)
Supply Chain Management
Security
Messaging (incl. email, calendar, contacts, IM)
Human Resources (HR)
0% 10% 20% 30% 40% 50% 60%
Preferred suppliersSoftware on Demand (Worldwide)
Buying SaaS SolutionsISVs are the preferred suppliers
38%
19%
8%
0%
10%
20%
30%
40%
50%
ISV providing software on
demand
System Integrator Business process outsourcer
According to a survey1 conducted by IDC , ISVs are the preferred suppliers for on demand software solutions with nearly 40% of organizations preferring them
System integrators are the second most preferred suppliers with 19% of organizations approaching them for SaaS solutions
Lack of formalized channels in the broad software on demand landscape is a major reason for ISV popularity
ISVsTechnology & connectivity makes it possible
Recurring revenue stream
Single version for all customers
Strong customer feedback loop
Easier to trial
Reach broader target market
End UsersPricing matches economic benefits
Reduced initial outlay; complexity and risk
Reducing IT Operations cost
Shift Capex to Opex
Easier to trial
Focus on core business
Drivers for SaaS Adoption
Ecosystem Opportunity
Many ISVs face challenges with expanding into hosted offerings because they lack the necessary expertise
Microsoft can help ISVs grow their businesses by providing programs and tools to support the delivery of hosted software
Connecting ISVs with key distribution channels such as hosting providers and telecoms operators creates new business opportunities
SOFTWARE + SERVICES ENABLEMENT PROGRAMS
SaaS Enablement Programs
SaaS Incubation Center ProgramSelected partners to cover strategic marketsDepth engagement from Microsoft Focused on ISV business
Transition from traditional modelsConnecting with ecosystem
S+S Developer MarketplaceAny certified hoster with Windows-based infrastructureBreadth engagement from MicrosoftFocused on developing the Hosters business
Get Hosters up the value chainConnecting with SharePoint ISV ecosystem
Tier 2Certified Hosters with
Windows-based infrastructure
Tier 1
Serv
ice
Prov
ider
Lic
ensi
ng A
gree
men
t (S
PLA)
Catalogue
SaaS Incubation ProgramStructured Engagement focused on accelerating ISVs into the SaaS model using Microsoft technology
The program provides the SaaS ISV with:
Business consultancy (BDS)Infrastructure and architectural consultancy (ADS)Access to Microsoft selected SI partners Hosting expertise from Microsoft Gold Certified hosting partnersAccess to new channels to market
Additional technical & business guidance available outside of standard program
Proof Of
Concept / Launch
Architecture Design Session
Business Design Session
© Microsoft & Mural Ventures Corp 2006, All Rights Reserved
Assessing Go-To-Market Maturity for SaaS
The BDS methodology for assessing Provider maturity with respect to 8 Key “Go-To-Market” Success Factors that are required in selling & marketing Software-as-a-Service offerings:
Competitive DifferentiationMessaging & PositioningPackaging & PricingWeb-Driven Business ModelDemand GenerationOnline Customer ExperienceDirect/Indirect Sales ProcessesOrganizational Effectiveness
Optimized
Competitive
Inhibited
Ineffective
Predictable
Business Design Session
LevelCompetitive
Differentiation
Messaging & Positioning
Packaging & Pricing
Web-DrivenDemand
Generation
Online Customer
Experience
Direct/Indirect
Sales Process
Organizational
Effectiveness
Focus & Behaviour
5(Optimized)
Provider has created true Blue Ocean (aka uncontested market
space) by differentiating along a unique axis that reaches beyond current market boundaries and
existing demand
Vertical (e.g. Real Estate), Horizontal specialization (e.g.
Finance), or other micro-market specific
positioning. User focus groups or surveys are pro-actively used to
incorporate customer feedback into product
life-cycle.
Micro-market specific packaging/bundling of service with vertically
focused add-ons. Market research used to
understand customer price-point sensitivities.
Micro-market sales sites for specific
vertical markets (e.g. real-estate). Fully
integrated PPC/SEO and pro-active analysis
of web-analytics
Micro-market specific demand generation
campaigns with integration across all
forms of demand generation (e.g. PPC, Banner Ads, email, direct mail, print)
Integrated up-sell and cross-sell activities into
customer "control panel". Pro-active and
ongoing customer feedback management (surveys of customer panels by segment to
assess overall customer experience, satisfaction,
and future needs).
Vertical or micro-market focused channel
partners with lead flow integrated into micro-marketing campaigns.
Channel partner branded sales sites.
Integration of channel partner into knowledge
base, live chat, etc.
Organization is designed and
internally aligned for change. Specific
processes for continuous
improvement. Healthy balance of
management (stability) and
leadership (fostering change).
Target Market Focused w/ Continuous
Improvement
4(Competitiv
e)
Provider has differentiated with a vertical market focus
with vertical (or micro-market) specific add-on
capabilities/features.
Best Practice positioning based on a well-defined messaging & position framework
(see template). Customer centric
positioning that blends customer-benefit as the
solution for the customer pain point/problem.
Some type of unique differentiation of
packaging or pricing that sets the provider
apart of the reset of the pack.
Differentiated sub-sites and/or landing pages aligned with
best-practice positioning of value
proposition according to messaging &
positioning framework
Demand generation campaigns drive to a specific sub-site or landing page. All
campaign activities are well coordinated and integrated. Pro-active
PPC/SEO campaign management with
periodic (e.g. bi-weekly) refinement.
Integrated online knowledge-base and
live-chat for both sales support and post-sales
support. Pro-active email communication during first 30-60 days provides training, tips,
tricks, etc.
Integrated lead/opportunity flow for
channel partners. Mature process for lead qualification and routing
of leads. Customer segmentation and
qualification "drives" the opportunity
management. Willing to "walk away" from bad
opportunities.
Strong executive sponsorship for
improving existing offerings and adding
new value-added service offerings.
Proven organizational agility and rapid time-to-market in response
to competitive threats.
Transition Phase - Focused on Competitive
Differentiation & Discrete
Improvements
3(Predictabl
e)
Provider has differentiated from the
competition by bundling additional services or
capabilities not offered by the competition.
Customer centric positioning with
Benefits (e.g. Anytime, Anywhere access), then
supporting benefits points, then features as appropriate. Consistent
application of messaging throughout
ALL collateral.
Small number (2-3) of different customer/user
"plans" that align correctly with end-user or customer personas. Value differentiation
between different price plans is clear and
significant.
Best-practice site that allows customers to 1) Search; 2) Find; 3) Self
Qualify; 4) Try (Free Trial where possible); 5) Make the buying decision; 6) Buy; 7) Activate. Web-site is the focal point of the
business.
Makes use of pro-active PPC/SEO campaigns. All
demand generation activities lead to one place -- the web-site.
Self-guided sales experience, self-admin capabilities, no barriers
to sale via web, or phone. Easy signup and
activation.
Pro-active management of direct sales, inside sales, and channel partners. Focus on
customer segmentation and lead qualification.
Pro-active training. Overlay sales team with deep solution expertise supports all channels.
Organizational alignment around
business objectives and customer needs. Organizational ability to repeatedly follow a relatively short and defined life-cycle for
the successful introduction of new or
revised product offerings.
End-Customer Focused &
Service-Driven
2(Inhibited)
Provider's offering is functionaly equivalent to that of other providers,
resulting in a "my feature X beats your
feature X" competitive differentiation tactic, but ultimately resulting in a price-competitive sale.
Still product and feature centric positioning with
progress towards customer-centric
benefits positioning. Typically a lack of
consistent application of messaging across all
channels and collateral.
Competitive pricing and correct packaging, but
actively working to eliminate other
inhibitors (e.g. contract minimums).
Customers can search, find, and buy. Provider is actively working to ensure that all of the
information required to make a successful
buying decision is on the site and correctly
presented, eliminating any final inhibitors to
selling.
PPC/SEO and other demand generation
capabilities are leveraged, but with
some inhibiting factors that limit their
effectiveness (e.g. mismatch between PPC terms and landing page
positioning). Active progress is being made to eliminate remaining
inhibitors.
Self-guided signup, support, and/or self-administration but
inhibited in some way -- e.g. overly complex registration process, complex activation.
Active progress is being made to eliminate
remaining inhibitors.
Direct Sales, indirect channels, telesales, but
with ineffective processes for lead
qualification and routing of leads to "best
qualified" channel. Provider is actively
working to train sales and revise processes to improve effectiveness.
Good executive leadership in place and committed to drive change and improve business performance by
driving improvements in accordance with the "key success
factors".
Transition Phase - Focused on Initial Change
1(Ineffective
)
Provider is offering the exact same service
offering as other providers (perhaps
based on third-party technologies) with no opportunity for true
differentiation, resulting in a Red Ocean in which
the only remaining competitive
differentiator is price.
Positioning is completely product and
feature centric. Positioning is effective only for customers who already know what they
need and are already familiar with the specific
application domain.
Typically characterized by uncompetitive pricing, minimum contract terms,
minimum # of users, confusing pricing, too many tiers of service,
multiple tiers instead of "add-on" options.
Customers are unable to find offering, presentation is
confusing, no online self-subscription is
available.
No PPC/SEO campaigns. Other demand
generation activities (e.g. Print ads, direct
mail, etc) do not leverage the web-site.
No self-signup capability, direct sales
interaction required. No offering self-
administration.
Direct sales only. No pro-active lead qualification.
No customer segmentation by size or industry. Characterized
by tendancy to focus too far up-market. Long sales cycles. Lack of "solution specialist" capability results in
inability to overcome common objections.
Ad-hoc organizational and departmental
behaviors with a lack of internal alignment towards achieving a common vision or
business objectives.
Product-Dependent
Focus & Ad-Hoc Behaviour
Assessing Go-To-Market 8 Key Success Factors
© Microsoft & Mural Ventures Corp 2006, All Rights Reserved
Self assessment before BDS
After implementing
the actions from the BDS
Business Design Session
Business Development SessionISV feedback… “The Business Design Session helped us to recognize
that there are two key but clearly separate threads
available within our go to market strategy; because of
that input we are now successfully pursuing mid market
opportunities as well as our original Enterprise targets.”
… Sam Nixson, CEO, Sunergeo“The Microsoft SaaS Enablement Program helped us find
answers to questions where we knew we didn’t know
the answer, and identify answers to some questions
where we didn’t know we didn’t know. All in all a very
good program for information, putting us in contact with
the right people, and enabling us to commit with
confidence to a SaaS offering in our next release.”
Robert Hobbs, CEO, INPHASE
“The Business Design Session was a great investment
of our time to get a new perspective of our business
and the future potential of SaaS. It is was great way to
quick start our 2.0 business with competent Partners
helping avoid the pitfalls. “ Soren Krarup, Brixx
Solutions
Architecture Design Session
Help ISVs to understand how to make their SaaS application benefit from the features provided by the Windows-based Hosting for Applications (WBHA) Solution.
This solution offers Hosting Partners and ISVs:Lower TCODecreased management costsImproved securityAbility to deliver an SLA
Provide guidance on how to connect to Microsoft Connected Services Framework
Architecture Design Session
Windows-based Hosting Solution Overview
Flexible Windows-based hosting platformModular components let you deploy what you need Windows platform lets you centralize and automate
Hosted Messaging
and Collaboratio
n
Data Services
ASP.NET Hosting
Web Hosting
Microsoft® Solution forWindows®-based Hosting for Applications
3rd Party Application Hosting
Architecture Design Session
CONNECTING THE ECOSYSTEMS
Taking SaaS Apps To Market“At BT, we’re always focused on extending the breadth and reach of our service portfolio to ensure we are catering for the needs of our end customers.”
“Using our service delivery environment based on Connected Services Framework, our vision is to aggregate these SaaS-enabled ISV applications with our own existing services to create compelling new offers which we jointly take to market.”
Bill Murphy, Managing Director, BT Business
Catalogue
Connecting a SaaS EcosystemTelco 2.0 Application Distribution
SaaS ISV
Telco 2.0 / CSF
SaaS Incubation Center
Self Hoste
d ISV
NTT Europ
e Online
7global
Telco
Telco
Vision-App
Siennax
Telco
SMB Customer
SMB Customer
Telco’s are becoming a platform for distribution of SaaS applications
Microsoft Hosting partners are expert on building and operating the right infrastructure for scale against best TCO
Microsoft Partner Program ISVs benefit from overall ecosystem, getting access to previously unavailable distribution channels
SaaS App
Call To ActionAnyone: Visit our online resources to find more details on our SaaS Enablement programs
http://www.microsoft.com/saashttp://www.microsoft.com/saasincubation
Hosters: Contact your PAM/HSS if you are interested in joining one of our SaaS Enablement programs
http://www.microsoft.com/serviceproviders
ISVs: Sign-up for an engagement in one of our BD/AD Sessions.
EMAIL : [email protected]
© 2008 Microsoft Corporation. All rights reserved.Microsoft, Active Directory, Excel, FrontPage, Internet Explorer, SharePoint, Visual Basic, Visual Studio, Windows, the Windows logo,
Windows Media, Windows NT, Windows Server, and Windows Server System are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the
trademarks of their respective owners.The information contained in this document represents the current view of Microsoft Corporation on the issues discussed
as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of
publication. Schedules and features contained in this document are subject to change.This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
AS TO THE INFORMATION IN THIS DOCUMENT.The example companies, organizations, products, domain names, e-mail addresses, logos, people, places, and events
depicted herein are fictitious. No association with any real company, organization, product, domain name, e-mail address, logo, person, places, or events is intended or should be inferred.
This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.
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