Saas- Business Model

SaaS – BUSINESS MODEL

Debmalya Khan

DEBMALYA KHANDEBMALYA KHAN

AGENDA

Definition and Logic

Key Characteristics

SaaS Platforms

Preferred hosting - trends

SaaS Database Architecture

SaaS benefits for customer groups

SaaS perceived disadvantages

SaaS - benefits to vendors


DEFINITION AND LOGIC

Application hosted as a service across the internet

Alleviates the burden for maintenance , ongoing operation and support

Vendors control and limits use, prohibits distribution and version control

Hosting – Own Web Server / third party application service provider( ASP )


KEY CHARACTERISTICS

Network based access to commercial software

Management from central location rather than each customer site

Single user – multi-tenant architecture

No Need for downloadable patches/ upgrades

Providers leveraging economies of scale in

– Deployment

– Management

– Support


SaaS PLATFORMS

DEVELOP, INTEGRATE , DEPLOY AND HOST THESE APPLICATIONS

Delivery Platform – Delivery as a core competency

– Managed Hosting

– Cloud Computing

Development Platform

Application Led Platform


DELIVERY PLATFORM- MANAGED HOSTINGContract hosting provider to host infrastructure

Developers setup their own infrastructure from a provider who manages it.

Provided with superior support and infrastructure


DELIVERY PLATFORM- CLOUD COMPUTING Vendor provides on –demand access to infrastructure

capacity over the cloud to deploy applications, obtain other components separately

Efficient scalability and provisioning of capacity possible


DEVELOPMENT PLATFORM

Providing IDE in addition to hosting

Obtain a general purpose programming language

Cost effective alternative to providing on- premise SDK’s to developers


APPLICATION LED PLATFORM

Utilize platforms of popular SaaS applications (e.g. Force.com

Suiteflex etc.) to develop and deploy the application

Deliver a business application and establish the foundation for the platform as a separate offering

Rapid deployment of new applications to customer base


SaaS PLATFORM OPTIONS


PREFERRED HOSTING - TRENDS


SaaS DATABASE ARCHITECTUREDedicated Tenant Database

– Cater to specific customer requirements

– Easy for customization, preferably for enterprise customers

– Enterprise customers willing to pay more for the customization


SaaS DATABASE ARCHITECTURE( CONTD )SEPERATED SCHEMA DATABASE

– All tenants using the same central database

– All tables duplicated by the vendor to suit the number of tenants

– Different set of permissions

– Three customers using the same central database


SaaS DATABASE ARCHITECTURE( CONTD )SHARED DATABASE

Fixed set of extensions

– Additional columns for customers to store the predefined data

Extension Value-Pair

– More Flexible

– Define your own extensions in another table linked to the parent table using keys


SaaS BENEFITS FOR CUSTOMER GROUPS Try before use Software – creating new trial users without cost

Automatic provisioning – Multi- tenant system – designed to add a new tenant within a minute

No Hardware Compatibility issue:

Free software updates

Effective Maintenance: No investment in a testing server with the same specifications as a deployment sever

Low cost of Entry and TCO :

Outsourced Expertise dramatically reduce risk

Unmatched infrastructure and security measures:

Community: Encourage user participation, harness collective activity

SALESFORCE.COM CASE STUDY

Microsoft Office Word Document

SaaS BENEFITS FOR CUSTOMER GROUPS( CONTD )

Criterion for selecting providers for this modelCriterion for selecting providers for this model


SaaS PERCEIEVED DISADVANTAGESDifficult to relinquish control and trust third party to manage their applications and data

Non – availability of some business applications required for specific verticals

Depends on the competitive strategy of the organization – Cost Leadership or Differentiated

Weak integration ability not only with other systems but also with people and processes


SaaS - BENEFITS TO VENDORS

Enable a new group of customers

Making the product cheaper

Enable customer segmentation– Large customers -

Corporations– Typical customers – Low

level configuration customers– Non – addressable

customers – Customers using default configuration

Centralize the servers and the service team


SaaS - BENEFITS TO VENDORS( CONTD )New model of monetization

– Subscription model : major income from number of concurrent users

– Pay- Per-Click model : major income from number of application processing

– Transaction based pricing model : major income from profit sharing with customers


THANK YOU


Saas- Business Model

Business

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