Tech Startup DayThe Cloud Challenge

Eugenia ForcatPartner Business Evangelist DX@eugeniaforcat

Cloud-Oriented-Partners Outperform Their Peers

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The Marshmallo

w Test

Stanford 1970, Walter Mischel

Repeated around the world

Studies on Delayed Gratification with children (4-6 yrs)

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The Deal: 1 Marshmallow

now Or 2 if you wait

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The Deal: 1 Marshmallow

now Or 2 if you wait

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The Deal: 1 Marshmallow

now Or 2 if you wait

2/3 of kids ate the Marshmallow

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The Follow-up: ~18 years later Children who

waited had better life outcomes

SAT Scores, Education, BMI

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So what does this mean for

IT solution providers?

Selling softwareTwo approaches.

Software as a Product (SaaP)On-premises software

Software as a Service (SaaS) Cloud software

• Customer engagement

Pricing and revenue

Customer segmentsSaaP business model.

Medium to large enterprisesWant a powerful offering for large projectsWilling to pay a substantial amount for the product

Customer segmentsSaaS business model.

Medium to large enterprisesWant a powerful offering for large projectsWilling to pay a substantial amount for the product

Small and medium

businesses

Simple and easy-to-use

Small to medium

Moderate

• Customer engagement• Pricing model

Pricing and revenue

Subscription Such as per user per

month or per device per year.

Might allow advance payment, such as first year up front.

Per Unit Such as per

transaction, per gigabyte of storage, per connection, etc.

Free Provide free service

to one set of users, then charge another set of users, e.g., advertisers.

SaaS pricingThree approaches.

• Customer engagement• Pricing model• Build and Track Revenue

Pricing and revenue

Revenue streamsSaaP business model.

License feesCustomization servicesTraining

Revenue streamsSaaS business model.

License feesCustomization servicesTraining

Subscriptions

A simple app doesn’t need much training

Limited with a multi-tenant

service

Comparing SaaP and SaaS revenuesAn illustrative example.

Time

Money

SaaP (On-Premises) ApplicationSaaS Application

Takes longer to break even

Potential for more long-term revenue

(and profit)

Slower but smoother revenue growth

Larger initial investment

Sales processComparing SaaP and SaaS sales.

Buying decision made for an on-premises application

Buying decision made for a SaaS application

Customer is introduced to the

product

Customer has an initial perception of the product’s value

Customer has hands-on experience with the

product

Customer understands the

product’s real value

The Sales process

•Compensating the sales force• Commission plan• Seasonality

•Working with partners• Less incentives for partners

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Focus on the future revenue streams that

you can build Don’t focus on the marshmallow in front

of you

And may you build a WEALTH of

Marshmallows

Thank You…