the three things every aspiring saas company should know!

21
3 Things Every Aspiring SaaS Company Should Know Ashley Stirrup, SVP of Product & Solution Marketing – ServiceSource Guest Speaker: Amy Konary, Research VP – IDC Research

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This informative slide deck was the foundation of a webcast with ServiceSource and leading analyst firm IDC exploring the opportunities and challenges for companies making the transition to a SaaS or cloud-based business, including: - The top 3 keys to success for software and hardware vendors to effectively manage the customer lifecycle and pave a shorter path to profitability - Managing financial expectations in the marketplace - Examples of companies that have successfully made the SaaS transition - How usage and consumption insights are now the foundation for customer success driving successful SaaS businesses Here is the link to the webinar! http://corporate.servicesource.com/LP=279

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Page 1: The Three Things EVERY Aspiring SaaS Company Should Know!

3 Things Every Aspiring SaaS Company Should Know

Ashley Stirrup, SVP of Product & Solution Marketing – ServiceSource

Guest Speaker: Amy Konary, Research VP – IDC Research

Page 2: The Three Things EVERY Aspiring SaaS Company Should Know!

1

Agenda

1

1

2

3

4

5

What’s happening in the SaaS market?

What does it take to build a SaaS business? What are the economic realities?

The 3 things every aspirational SaaS company must know.

Who has successfully made the transition to a SaaS business?

Q & A

Page 3: The Three Things EVERY Aspiring SaaS Company Should Know!

SaaS Market Snapshot Amy Konary

Research VP, Software Licensing and Provisioning

Page 4: The Three Things EVERY Aspiring SaaS Company Should Know!

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 3

Page 5: The Three Things EVERY Aspiring SaaS Company Should Know!

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

2012 2013 2014 2015 2016 2017

Software Revenue

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

2012 2013 2014 2015 2016 2017

SaaS/PaaS Revenue Packaged Software Revenue

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

2012 2013 2014 2015 2016 2017

SaaS/PaaS Revenue Packaged Software Revenue Revenue from companies with No SaaS/PaaS

5.9% Growth CAGR (2012-2017)

4

XaaS Drives Revenue Growth How Does Cloud in the Portfolio Impact Revenue?

Source: IDC, 2014

2012-2017 CAGR

19.8%  

8.1%  

91.9%  83.5%  

16.5%  

9.1%   -­‐9.4%  

3.9%  

22.1%  

Page 6: The Three Things EVERY Aspiring SaaS Company Should Know!

Key Stats: Importance of Cloud Traditional IT Dominates, but Public Cloud Drives New Growth

34% of replacement

apps spend (replacing

capability) was on SaaS

$1 for every $6 spent on

software was for SaaS delivered software

91% of new apps spend (new

capability) was on SaaS

84% of net new commercial apps will be developed specifically for cloud in 2014

31%+ of companies will source greater than 50% of total IT spend from the Public Cloud by 2016*

>80% of Global 2000 will still have >70% of IT onsite in 2016

Source: IDC, 2014

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 5

$1 for every $5 spent on apps was for SaaS delivered apps

Page 7: The Three Things EVERY Aspiring SaaS Company Should Know!

Key Questions for SaaS ISVs

6

Develop Rebuild?

Architecture Runtime Environment

Services Single-stack or

Composite?

How Is It Built?

Operate Ops Responsibilities

Hosting Solution Hardware Location

Patch and App Maintenance

How Is It Run?

Market Customer type

Business Model Monetization Strategy

Ongoing Support Marketplace

How Is It Consumed?

Target customer: Who will be the buyer? How will they access? Business Model: How will you make money? Manage costs? Monetization Strategy: Metrics? Terms? Ongoing Support: How do you grow accounts and keep customers? Marketplace: Who sells it? Who promotes it? How do you reinforce value?

Page 8: The Three Things EVERY Aspiring SaaS Company Should Know!

7 7

Monetization Strategy

•  Move beyond “Wild West” •  From user pricing to usage pricing •  Process and structure, but with flexibility

Page 9: The Three Things EVERY Aspiring SaaS Company Should Know!

8 8

3 Things you must know

Small changes in retention, upsell and cross-sell can have a huge impact

Usage data can help you optimize how and when you reach out to customers

Roles and responsibilities are critical to getting the right outcomes

1.

2.

3.

Page 10: The Three Things EVERY Aspiring SaaS Company Should Know!

9 9

Accelerate time to profitability

On-boarding Adoption Training Upsell Cross-sell

Customer lifetime value

Time

Initial Sale

Page 11: The Three Things EVERY Aspiring SaaS Company Should Know!

10 10

SaaS economics R

even

ue

Page 12: The Three Things EVERY Aspiring SaaS Company Should Know!

11 11

Best-in-class Customer Lifecycle Management

Acquire Onboard Adopt Achieve

Customer Success

Intelligent Engagement

Upsell Cross-sell

Renew

Proactive Retain

Advocacy

Grow

Nurture

Page 13: The Three Things EVERY Aspiring SaaS Company Should Know!

12

Roles and responsibilities

Customer Success Manager

•  On-boarding

•  Adoption

•  Retention

Renewal Sales Rep

•  Renewals

•  Up-selling

•  Cross-selling

Page 14: The Three Things EVERY Aspiring SaaS Company Should Know!

13 13

Customer coverage models

Customer Success Manager

Renewal Sales Rep

Marketing

Automation System

Customers

Page 15: The Three Things EVERY Aspiring SaaS Company Should Know!

14 14

End user strategies

Customer Success

Nurturing and

advocacy

Feature training & adoption

High usage of key features

Not using the mobile app

Page 16: The Three Things EVERY Aspiring SaaS Company Should Know!

15 15

Maximize Customer Lifetime Value

Initial Sale

Renewals

Up-Sells

Cross-Sells

Usage Charges

TIME

90%+ of revenue is captured

after initial sale

CLV ($)

Page 17: The Three Things EVERY Aspiring SaaS Company Should Know!

16 16

Customer usage informs which growth levers to pull when

Initial Sale

Renewals

Up-Sells

Cross-Sells

Usage Charges

Before Sale

CLV

How best to drive

conversion?

Did the customer get good value

from the product or service?

What is time to value?

Is usage meeting

expectations?

Is the service underpriced

compared to usage?

What is the next best offer based

on value derived?

What are the right plans?

TIME

Page 18: The Three Things EVERY Aspiring SaaS Company Should Know!

17 17

Customer Lifecycle Management

Grow Retain Adopt

Increase adoption & retention

Grow incremental revenue

Predictive analytics for subscription businesses

*Based on internal studies, companies who worked with ServiceSource increased retention by 15 points

20% increase in sales productivity

15pt Increase in customer retention* Selling Services

Customer Success

Renewal management, workflow and analytics

Page 19: The Three Things EVERY Aspiring SaaS Company Should Know!

18 18

Who has successfully made the transition?

Page 20: The Three Things EVERY Aspiring SaaS Company Should Know!

19 19

3 Things you must know

Small changes in retention, upsell and cross-sell can have a huge impact

Usage data can help you optimize how and when you reach out to customers

Roles and responsibilities are critical to getting the right outcomes

1.

2.

3.

Page 21: The Three Things EVERY Aspiring SaaS Company Should Know!

20 ServiceSource Confidential Information

Thank you!

Q & A