SaaS Business Model

Ted Keating / M.D. ‘IT’s Logical’

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SaaS

PaaS

IaaS

The Business Model

Five keys issues for SaaS success– Sales construction to suit SaaS– Services to Survive– Service Costs / Productivity– Cash to survive– SaaS KPI’s

Sales construction to suit SaaS– Team Construction• Customer focus… Security & Reliability• Product life cycle - Tipping point?• Is it the same?• Hunters & Gatherers

– The Rule of 78• Kill off Sales Heroics

– Incentives

Structure yourSales operation to suit a SaaS model

Normal Partner Model

Hardware & Software

VAS & Break n Fix

Margin

SaaS Model

SaaS ProductMargin

Technical Services

Customer Sav-ings

Services to Survive

– Initial Sale Services• Proof of Concept … Build - Migration

Support, Training, Security

– Other Service Growth Areas• Integration • Managed Services

– … Outsourcing?

‘Services’ to survive

Service Productivity

– Labour cost pressure - CASS– Structure teams

• Efficiency – for P&L• Measure

– Automate – Cloud?• Ticketing / Knowledge Systems• Out-of-Town resources

Service efficiency will

grow in importance

Cash needs strict management

– Core Problem• Incentives• Discounts• Services

– Negotiate– Capital?

Cash is not only king,

it’s the dictator of success or….

Key Performance Indicators

– Service Revenue– Cash– Churn–Monthly Recurrent Revenue (Not

Sales /GP)

Measure, for success

The keys to SaaS success…

– 1 - Sales To suit SaaS– 2 - Services to Survive– 3 - Service Cost / Efficiency– 4 - Cash is core– 5 – Measure - KPI’s - MRR, Churn,

Service Rev, Cash