Presentation: The Road to “SaaS-ification” for Software Vendors

Host: cleverbridge co-founder and vice president of marketing, Craig Vodnik

Guest: Forrester Consulting principal analyst, Brian Walker

Craig Vodnik: Good Morning, good afternoon, and good evening to everyone and thank you for tuning in to this cleverbridge hosted webinar; The Road to “SaaS-ification” for Software Vendors. I’m Craig Vodnik, vice president of marketing and co-founder of cleverbridge. cleverbridge is a full-service e-commerce provider for digital products. A flexible platform and unrivaled service fuel the performance of B2C and B2B businesses around the globe. Drawing from years of experience and expertise, cleverbridge provides, customized multi-channel e-business solutions. International corporations count on cleverbridge to support their SaaS and subscription based e-commerce needs. Get to know us at www.cleverbridge.com, our Building Keystones blog, Twitter, LinkedIn, and Facebook.

Today I am joined by Forrester Principal Analyst, Brian Walker. Brian is the leading worldwide expert in e-commerce platforms, multi-channel commerce, marketing technology, and mobile commerce. Brian, thank you for being here today.

Brian Walker: My pleasure Craig Vodnik, thanks for having me.

Craig Vodnik: Please feel free to post questions anytime by using the question feature on your screen. We will answer them during the Q & A session at the end of this webinar. If you’re following along on Twitter, the hash tag for this webinar is Shift to SaaS, all one word. If you have questions during or after the webinar, you can also tweet @cleverbridge and use the twitter hash tag Shift to SaaS, and we will make sure to respond. Brian is joining me today to discuss the cleverbridge commission study; Software Vendors: The Shift to SaaS. During the next 60 minutes, we’ll talk in detail about the benefits SaaS can bring to your business, how others who have switched to SaaS have reaped significant rewards, proven strategies to navigate the barriers to entering the SaaS market and the type of investments necessary to succeed in the B2B SaaS market. And with that, I will let Brian take over.

Brian Walker: Thanks so much Craig Vodnik, again it is my pleasure to be here today. I’m looking forward to sharing with everyone here some really interesting and pretty compelling research that we’ve done that helps business leaders within the software vendors, understand the buying preferences, goals, and objectives of your audience. And also to understand some of the opportunities, barriers and challenges, that those who you may be competing with directly or who may be working on SaaS solutions in other software verticals and how they’re addressing it.

Many of you are probably familiar with Forrester Research; I just want to talk quickly about the fact that Forrester is a role based research organization. Each of the over 200 analysts here at Forrester are focused on a specific role within our client organizations. I myself have focused largely on the e-business and channel strategy leader. The research that we do and the work that we might do with clients, tends to be very role focused. In this case, working with cleverbridge, we really wanted to understand the

opportunities and objectives of the e-business channel strategy leader inside software solution providers who are interested in driving increased business through B2B websites and B2B e-commerce capability that solution providers like cleverbridge are able to provide. And how companies like yours, face the challenges that are presented by moving to SaaS and some of the channel conflict issues and so forth, and what are the opportunities in doing so that can help grow the business and extend your competitive advantage.

The presentation today is going to be broken up into a couple of key sections. First of all I want to focus in on the buyers of software and how they are looking at SaaS solutions today. Why would they consider moving to SaaS, what are the goals and objectives they have in doing so, and what are their concerns and objections that they have to face in considering SaaS versus traditional license software or on-premise solutions.

One of the really interesting findings to start off with here was the fact that already today, 31% of companies are moderate to heavy users of SaaS software. One of the other interesting findings that really sort of jumped out at me was the fact that larger enterprises are actually kind of leading the way. It’s not necessarily true that smaller companies would be early adopters of SaaS solutions, if anything they are kind of lagging behind their larger competitors. We see here already that SaaS solutions are already being used to a greater degree within larger enterprises, with 24% of larger enterprises talking about a mix of SaaS based applications and traditional desktop software already in use today. And an additional 33% talking about they may have a few SaaS applications already although the majority is still traditional applications installed and internally hosted.

When talking to prospective buyers about what their top business goals are that are mentioned by their internal IT organization when considering SaaS, by and large a vast majority of them identified cost reduction as sort of the key factor as the thing they’re most interested in. There’s also some other interesting call outs here such as improved data security, with the move to SaaS solution and improved business process execution speed. You can also see that improved collaboration and information exchange is another key driver here, which might indicate that solutions that are focused on enterprise collaboration, social solutions, content management, and enabling the businesses to work together, internally and with clients, have an interesting opportunity with SaaS today. As shown by 17% of prospective clients that we surveyed talk about that as a very important factor in the move to SaaS.

One of the other things that I think was really an interesting finding here was how SaaS is an opportunity to remove the risk of orphaned or old and unsupported software within these enterprises. The ability to maintain an up to date version rather than having to go through an upgrade process for internally hosted software. Certainly the key ways life cycles and project funding and support required to upgrade internally hosted solutions present a pretty significant challenge for many IT organizations today and SaaS is a terrific opportunity to remove some of those challenges and take them off the plate so that those resources can be focused on other higher value tasks. There’s also some other interesting opportunities within the purchaser’s interest to see how SaaS removes acquisition costs and enables faster time to market which really enables the IT organization to be the hero in many cases and improve time to market and the ability to solve business challenges faster. Another interesting call out is that

SaaS software may have a better 3 year TCO than traditional licensed software. Although that’s relatively low here, I think that’s a really interesting call out that we’ll talk about later on here in the webinar.

When acquiring and implementing SaaS software, many of the folks that we surveyed here mention that speed of implementation and deployment is a key factor. And increasingly that time to market and that ability to react to the changing business needs is really driving the interest in SaaS solutions. One person that we interviewed for the report talked about when comparing on-premise software solution versus SaaS they were actually very happy to compromise on their requirements and features that they needed from that solution in order to implement the solution faster. In this particular case, they talked about an 8 week deployment cycle versus a 9 month deployment cycle. And how the fact that the SaaS solution was limited, perhaps more simple, was actually a benefit even though even though it was not able to deliver on everything that they could imagine. The fact that they were able to get started with a solution and improve an existing business process, solve a problem and then build on that was more valuable to them. For many buyers of SaaS solutions that is a tradeoff that they are very willing to make, in particular, when the decision rests with a business leader versus an IT leader.

I want to transition a bit to talk about SaaS from the prospective of the software vendors themselves and how software marketers are increasingly turning to SaaS as a faster, less expensive, and less resource intensive way to deploy business solutions and acquire customers and deliver value. SaaS opens the door to new markets especially in small business and medium sized clients, although we actually see larger companies leading the way in many cases in their adoption of SaaS. One of the interesting findings that we saw within the smaller business segment was how SaaS solutions had a very interesting opportunity in a replatforming scenario, where moving from a hosted or packaged product to an equivalent SaaS solution with 39 percent of the most recent purchasers of SaaS solutions talking about that being the scenario within the small business segment. The larger client base, typically the SaaS solution was acquired as part of a formal RFP process. But it is also an interesting finding here for both the larger and the smaller client which is a key to how SaaS in many cases is being adopted out there in the market place that is the fact that the application was initially used by a functional department without IT approval or probably even knowledge and because of the success of that solution it grew in popularity until IT adopted it as a company wide application. SaaS opens the door for this in many cases for the business to go out and a find solution to the problem begin working with it, have the budget for that out of their operational budget or their marketing budget and begin working with it to the point where they can demonstrate success, they can show value and perhaps other departments and divisions within the company begin to adopt it. In many cases that is a bit of a Trojan horse for a SaaS solution to enter into an enterprise environment without having to displace a different solution to prove that is as capable as an internal hosted solution and have that sort of takeoff and face some of the challenges that a SaaS solution may face or any solution for that matter may face. By being able to solve a specific business problem or business challenge you’re able to demonstrate that value and begin working with those key stake holders who own the budget and then start to demonstrate how you can solve those problems for them and hopefully demonstrate the opportunities across the enterprise and lead to further adoption.

We talked to quite a few vendors of software who are moving to SaaS and talked to them about some of the results they saw. A director of marketing for a software solutions provider that focuses on the health insurance industry said, “The beautiful part of SaaS based products is once you have the structure and delivery set up, your investment is sunk and everything you are receiving off the top is pretty high margin. You have to invest in the security, performance, bandwidth, etc. but now that we have that, we create greater and greater margin the more customers we bring on. The level of margin is almost embarrassing, it’s so high, so I don’t want to divulge.” The key take away here being the margin improvement and the fact that being able to deliver a solution directly via a SaaS approach in many cases limiting some of the challenges around selling, implementing, and sharing the sales process with third parties they were able to improve the margin significantly in the course of delivering a SaaS solution.

Some other characteristics from the survey that I think are really important; the SaaS solutions are able to help onboard new customers faster and improve the process for them getting started working with the software. This is no big surprise, I think it’s really interesting to see how software purchase decision makers this is really an important value at enabling them to take advantage faster that’s a key deciding factor for them in deciding to work with a SaaS solution versus an on-premise hosted solution that they may need additional resources and may need to factor in how they will maintain and support that solution over time. They’re convincing in many cases other parts of the organization that the decision that they’re making is going to be the right one for the long term and not lead to higher costs and friction. The ability to adopt a SaaS solution quickly enables them to overcome a lot of those objections and develop proof points that they can then rely on to move forward and develop that solution further.

Trials are obviously easier to offer and simpler to convert clients on with a SaaS solution. This is a pretty proven tactic in the marketplace. Enabling a user to begin working with the solution perhaps a limited version of the solution in many cases because it needs to be somewhat within the box the integration may be very lightweight to non-existent as they begin working with the trial. But be wary that to work with the product and play with it, see how it works, understand their day to day life with the product depending how they are going to be using it depending on what kind of software solution it is allows them to see the value immediately. In many cases even the interfaces and the tools it would be using on a day to day basis in an on premise kind of more traditional licensed implementation. Those kinds of tools and interfaces may not be available until quite a ways down the process of implementing the solution. In many cases the trials are a great way to drive early adoption and to help prove it’s real and prove the value before they begin truly rolling out that solution and implementing across the wider part of the organization.

As I said before, SaaS solutions in many cases can represent for the vendors of solutions a bit of a Trojan horse. It’s an opportunity for the customer to start small, start simple and add more bits, more seeds, and more complexity to the solution over time. In a way it’s a way to start simple and start in a way that’s easy for the client to consume, easy for them to learn, easy for them to train resources on, and over time build out more complexity and more integration with the solution if necessary. I don’t really think that it’s really a trick. I think it’s really about providing great value to the customer very quickly. It’s not a situation where you’re sneaking in the back door intentionally; it’s truly about driving business

values and driving a solution that the customer needs. Through proof points and through their use of the solution growing that customer to use more and more and perhaps implement a more complex variation or integrate a solution more comprehensively over time.

We also talked to folks about the fact that the vendors can react quickly to the changing market requirements and innovate at a rapid pace. In many cases, aggregating the requirements and needs across different clients hearing about how different clients are adapting and using the solution and building up the product based on that. This is an innovation burden that organizations are always going to be challenged to do on their own. So they may be working with a solution and they may have if they’re doing it on premise or a licensed product of course there will be upgrades over time. In many cases clients want to limit the number of upgrades they have to deal with to maybe once a year or maybe twice a year. In some cases they are going to have to skip upgrade versions or point releases because it’s just too much to try to support. At the same time actually implementing those upgrades and driving out that feature or capability to the business is not as easy as just flipping a switch. In many cases it would be a lot of work to integrate or enable those additional features or capabilities. SaaS represents a great opportunity to skip a lot of those headaches and provide a more seamless upgrade path and enable features more quickly. It’s not always the case, there still may be some work involved but because the platform is continuously maintained and they’re not dealing with multiple versions of the solution reduces the supports costs for the vendor of the solution and reduces the implementation and maintenance costs on the part of the customer. In many cases those implementation and maintenance costs are really connected to the total cost of ownership equation and the ROI evaluations of SaaS solutions that’s really a key to demonstrating why what may appear to be a higher cost SaaS solution may in fact be apples to apples in terms of cost or may actually present more efficiency than an on premise licensed application that has to be maintained over time. As things get more complex as the business relies on those applications more and more the around quality assurance and testing and regression testing becomes greater and greater as well which only adds to the time and cost associated with maintaining them and developing upon them so you can deliver on the requirements. SaaS solutions represent an opportunity to move beyond that and that’s something that we certainly see coming true from purchase decision makers in organizations using SaaS today.

SaaS is not always a silver bullet. There are many limitations and challenges in adoption that still exist inside many different client organizations when they think about SaaS solutions. There are a number of different internal hurdles and organizations that feel they need to get involved in approving any solution including SaaS solutions. It’s interesting the way we ask the question, what approvals does your organization typically require? IT feels that in most cases they should approve the adoption of SaaS software. What’s interesting about that is of course that implies that they even know about it, and I think in a lot of cases they don’t know about it. It’s so easy now for the business to kind of work around the IT organization and just acquire a capability and depending on the amount of integration required the IT organization may not know necessarily anything about it. For a business to go off and start working with a measurement and management solution and around human resources IT may not ever know anything about that until one day they’re asked to use it. The businesses may be motivated to hide this in some cases or even individual users who may be using SaaS solutions to perform any number of

different tasks from marketing to productivity to project management. They might just keep that to themselves and they may not even let IT know, therefore IT is 90 percent interest in approving those solutions may never even enter in the equation. It’s interesting to see that only 76% of the business leaders felt that IT needed to approve the solution which reinforces that point.

Security concerns still are seen as the largest barriers that would prevent a firm from using SaaS solutions. Other issues like integration and performance and cost concerns still are also significant. But security is one that the vendors of SaaS solutions are still going to have to work very hard to overcome. Insuring that everything from the way the solution is architected to how focused they are in mitigating these concerns to indemnification from a contractual standpoint may also be important. This is an issue where trust has to be built, has to be delivered, and of course from an actual solutions standpoint, security is an absolute must. Any issues or failures to ensure the security of your client’s solutions will absolutely undermine your opportunity to build that business and serve customers. And certainly the degree to which those concerns go public can drastically undermine your opportunity to build that business over time.

Similarly integration challenges with other applications are a concern. It’s interesting to see some of the differences that are jumping out with German software purchase decision makers identifying that to a greater degree than their counterparts in the US and UK. Although based on our sample sizes I think we have to be a little bit cautious about paying too much attention to that difference but none the less it’s interesting to see that it is a key factor. It demonstrates some savvy on the part of these buyers to identify that as a key issue. In many cases, it’s not an issue where the SaaS solution can’t be integrated it may be an issue that exposing the internal application environment to integrate to a SaaS solution is actually the biggest barrier. From a professional service standpoint SaaS solution providers have to continue to focus on solving for integration with best practices, perhaps adaptors that can be configured and implemented into a client environment and where training systems integrators and agencies and solution providers as well as client’s internal IT organizations to deliver on that will continue to be very important.

It’s also important to recognize that some software solution verticals are going to better suited to SaaS than others. There are categories where SaaS solutions are very nascent today. Just now beginning to be adopted or where we’re just starting to see some examples where that’s happening. To categories where SaaS solutions are just now emerging and becoming relevant and of interest, and where we’re starting to see competitors, whether they be start-ups or whether they be incumbent solution providers who are starting to use SaaS to compete within a different market or a different segment of their existing customer base. To categories where SaaS largely dominates in terms of its penetration where there’s a significant opportunity for it to be rolled out more quickly and in some cases that may be based on not only on how the solution is delivered but who the solution is being sold to.

Buyers of SaaS solutions software of course have different needs and the vendors of SaaS solutions have to be prepared to satisfy them or mitigate some of the concerns and objections that SaaS software buyers have. One of the key issues that I think software vendors have to resolve is how difficult it is for the buyers of these solutions to buy from them, to work with them. It may be their website, it may be

the business processes around it or it may be how the solutions can be implemented and the value is realized more quickly. Some of the things we found here is that the buyers of solutions find that working with the B2B user experience very frustrating. In many cases, will actually go to work with B2C online store first. Of course that assumes that there is a B2C offering and it’s a solution that can be purchased that way. But also recognizing that many vendors’ B2B sites only allow a buyer to submit quote requests and they are forced to complete their purchase with a sales rep. Or they really only allow you to work with a sales organization compared with purchasing on a vendors’ B2B site. Again an important key take away here is you as a vendor of solutions if that’s the case need to absolutely be focused in on making your solutions easier to buy in a web based environment so that you can facilitate customer acquisition and not put barriers in place. Of course there’s going to be challenges with respect to mitigating channel conflict inside your organization, adapting to more of a direct sales process for SaaS solution and those are real and have to be dealt with but the buyers of solutions increasingly want self-service they don’t want to have to be forced down a particular path there will always be cases where they do want extra service they do want to talk to a rep there may be more complexity or there may be feeling compelled to negotiate, in which case that’s absolutely appropriate for them to work with a sales person through that process. In many cases they want to start working with your solution right away and they don’t want to be put through a bunch of hurdles to do so. And they may want a web based self-service solution and prefer that over working with your existing channels.

We talked specifically about preferences for how purchasers want to purchase commercial software in the future. It’s really interesting to see that 21 percent of the larger companies’ buyers want to work direct with a vendor’s B2B website. That is actually greater than working with a dedicated vendor account rep. That’s a very interesting finding and it’s actually greater than within the smaller customer bases. The smaller customers may actually want to prefer to work with some of the existing channels that you already have including value-added resellers. That may be because they may feel like they have a little bit more special treatment from value-added resellers who might see them as valuable customer and they are worried about them getting lost in the mix. That is again something you could overcome by approving some of the self-service tools available to your smaller customers but today it’s certainly an interesting finding here.

Another interesting thing from a buyer’s perspective is businesses don’t want to depend on their IT organizations for day-to-day tasks. So in the case of SaaS solutions it really needs to be about enabling the business user to support the majority of their needs with your application. There may be a need for an administrator or a super-user for example, to have extra controls over how the solutions are integrated or configured. But a majority of the use and changes and support for that tool should be put in the hands of the business users so that they can be efficient and able to drive value and see the flexibility in the solution to use it and adapt it to their business needs more quickly with a limited number of barriers put in place. So the availability of online account portals for administrative tasks and the ability to manage the users and add seats and a variety of different things are all going to be really important to a SaaS solution and delivering that value to the business user and increasing the opportunity for that to be grown so that customer can adopt it more widely inside multiple different groups and divisions and regions within that prospective client.

Business users are in many cases blurring the line between about how they think about personal tools they might use for themselves both in terms of a hobby and so forth and what they’re using for work and SaaS in many cases is going to blur the lines. Dropbox is an example where many of their new customers are really businesses or users inside of businesses using that solution as a tool to share files to move between devices including their personal laptops and their work laptops or what not. And that’s a consumer geared solution that is already being adopted widely within the enterprise. We see other examples like Google Docs or even solutions like Flickr these are just a handful and there’s many other examples of solutions that may have been geared for personal use that are increasingly being adopted by users inside the enterprises to help drive productivity and it’s really about the user inside the business making decisions on their own about what’s the best tool for them to accomplish their needs versus having to receive, approve, support, and improve application from their internal IT organization. They really want to take action on their own and it’s really about their personal productivity and the tools they’re used to using and the tools that are geared that a consumer being able to use them on their own with a lot of additional support in it. That’s really resonating quickly. Of course there are a lot of other opportunities for solutions for enterprises that have also been very successful from a SaaS prospective. Salesforce, I think many are very familiar with the story there, but in many cases why that worked so well was sales managers or sales executives needing to have control over their sales pipelines and their sales forces and here’s a tool that they can implement without a lot of additional steps and approval and see value in almost immediately. Now over time that solution may be increasingly integrated to other enterprise applications and they may require more approval and steps along the way. In most cases, Salesforces will be adopted by the business with very little interaction or knowledge of an IT organization as a user gets started, as a business gets started using those tools. Similar with some of these others such as Concur and SuccessFactors over time the solutions have grown in complexity and certainly can be integrated more tightly with other enterprise applications. In a lot of cases businesses may begin to use them without a lot of interaction or approval from an IT organization.

Some recommendations to round off on and hopefully we can get to some questions here. You want to pick the right battles, some software categories will remain resistant to SaaS or others that are specifically those that are geared at business users and even consumers are going to be adopted more quickly and more readily. Also, the software categories that are very much focused on core enterprise data management may have a little bit more challenging time being adopted from the SaaS perspective although we do see that many government entities and large enterprises are interested in SaaS solutions from a private cloud perspective maybe a single instance the inside there will be organizations that will be distributed and deployed in a sense a SaaS fashion within their organizations. Also, incumbent software vendors must get on the SaaS bandwagon and not leave open that door for up-starts or key competitors to deliver solutions that may be a lot simpler but can be adopted more easily and quickly. This not only will come inside perhaps a smaller market segment we may not be addressing today and grow that business but also many perspective clients as we said before those buyers are interested in seeing value very, very quickly and they have a point they want to solve for and if there’s a simpler solution that they can implement very quickly there’s a high likelihood that they’re going to

adopt that versus a more complex higher cost solution. Often I see for example is traditional licensed application providers now delivering on-demand or SaaS solutions in addition to their more complex on-premise applications that enable them to sort of to solve for both. I think increasingly software vendors across a wide variety of categories are going to have to consider doing that in order to not lose out on a significant number of customer engagements. Also of course software vendors must reorganize their sales processes and really deal with some of the channel conflict issues that SaaS represents as I said before, this is not easy but customers increasingly want self-service tools they don’t want to have to be put through the grinder, they may not even want to talk to anybody in order to start working with your solutions. There may be ways that you can mitigate some of the channel conflict by sharing some of the benefits by territory or such with your existing channels so that they don’t see it as such a threat to their existing businesses. But none the less the buyers of the solutions in many cases want to be able to take action, work with your site, convert and begin working with the solution immediately and not have to be put through existing business processes or work with sales people in the course of doing that. Of course you always want to leave open the opportunity for them to do so because as I said before they may have special terms or conditions or needs that they do need to work with somebody on or it may be a large enough deal that you want to ensure that they have someone that they can work with to get what they need. And of course the last point is that the transition to SaaS requires much more than just an investment in R&D and technology so there is of course the design and development of a SaaS based solution that’s a huge endeavor. But beyond that, it gets into the ability to support, direct transactions and be able to integrate to your clients environment and it requires an adoption of a different way of engaging the customer and marketing to the customer and serving the customer in a more self-service fashion and in a sense a multi-channel fashion. You have to be able to blend in your traditional sales and support organization with that self-service to enable your users to move in between in an effective way. In a sense that sales and marketing effort is perhaps the most challenging one for companies who are moving to SaaS. In some cases they may know quite well how to design and deliver their particular software solution in a SaaS hosted fashion. But it’s the transition to different business processes in supporting that direct to consumer interaction that may actually represent the greatest challenge for them to really realize the value of delivering a SaaS solution.

I hope I was able to share some interesting data points with you that will help you make a decision about whether SaaS is right for you, what you need to be focused on, and some of the key considerations in doing so. Particularly how your prospective buyers are looking at these particular types of solutions and what’s going to be important for them to ensure your success in beginning to deliver and market solutions to them. Craig Vodnik, back to you.

Craig Vodnik: Great, thanks a lot Brain. We’re going to take a few questions, we have about 10 minutes or less here and we have a few people who have asked some questions via the webinar tool so please respond via the webinar tool to my messages to you. We also have one that came in from Twitter and that question is, what software categories have you seen that are resistant to SaaS?

Brian Walker: I think in many cases we’ve seen things like procurement platforms be a bit resistant to SaaS we’ve also seen things like data bases be somewhat resistant to SaaS. Things like order management being an interesting one where we’ve seen SaaS based order management solutions within the small business segment but we’ve seen a challenge in delivering enterprise order management solutions for large scale enterprises for example, or delivering application development of solutions being another example of categories that are challenged by delivering to a SaaS environment. There is sort of key enterprise assets and data being managed by these solutions. That’s where concerns around security and privacy of the data are going to dominate the discussion around whether a SaaS solution is the right one. And of course, where we see significant integration challenges such as ERP solutions where there’s many different integration points required to solve for business problems that software is geared at as those integrations add up obviously the complexity around delivering that in a SaaS environment increases and you may also see increased challenges around latency creep in as well. Those are some examples of categories where I think SaaS solutions have a greater challenge in being adopted within the marketplace. Although, I still think there are opportunities within the mid-market or small business segment to deliver a simplified solution set up and we see that for example in the ERP segment which we just said can represent some challenges.

Craig Vodnik: Great, thanks for that answer Brian. I’ve got a couple of other questions that have come in. First one being, what are your insights of how enterprises have adjusted their sales force with the deployment of SaaS solutions? Is that something that you have looked at as part of this or have an experience that you can communicate to the followers here?

Brian Walker: Yeah I think that assigning a sales organization to a territory or to a group of clients and not necessarily setting up that challenge, that sort of competiveness over the customer between traditional licensed applications and a SaaS solution. Building in incentives to support the acquisition of customers to the SaaS solution and reward them for that. Over time, you may change and tweak the compensation model on how you may share commissions and margins with your traditional sort of channels as SaaS solutions grow and change and in many cases I think the best way to get started is to not set up conflicts between the two and really incentivize your traditional channels or your direct sales forces to market and talk about the SaaS solution as another way the client can take faster advantage. There may be an upsell to an on-premise licensed application. And the SaaS solution may be positioned as a faster time to market or lower costs or simpler solution maybe a different tier of solution. But I think the real key to success for companies who have largely marketed their solutions as on-premised licensed solution with the direct sales force or through value added resellers is to design a solution that enables a customer to work directly with you and transact directly with you but then reward back your existing channels with commissions and incentives so that they see that as another opportunity to convert the customer versus a competitive situation.

Craig Vodnik: Great, thanks for that response, Brian. We’ve got time enough for one last question and the question is; on average, how long is too long for the implementation of a SaaS product? I would like to tie it into some data that we received and learned through this process. We talked about 31 percent of companies are using heavily SaaS or some SaaS, 69 percent of companies are using little to no SaaS. But obviously this market is expected to grow. What does it mean for companies just looking to get in

to SaaS or have they missed the boat? What’s that sort of timeline in your opinion that you see companies should be spending on this in order to be successful in the near term if their categories is going the way of SaaS?

Brian Walker: There may be pockets where if you don’t have a SaaS solution you may have “missed the boat” or there may be categories that largely are delivered via SaaS solutions today. I think for a vast majority of software categories there’s absolutely still an opportunity to add a SaaS solution that might address a different kind of customer need or a different market segment. In most cases you know full well those opportunities where you’re struggling to convert a customer based on cost, time to implement, or the complexity of the project and of course those are key opportunities for SaaS solutions to be positioned as a solution. I think over time we will see those kind of being a point of entry for companies to begin working with your solutions and maybe over time your SaaS solution can kind of either grow in complexity and how it can be integrated or you may migrate a customer to a more traditional on-premise solution as they may need more control or want to customize the solution to their specific needs. The bottom line is I think our data here shows that companies really need to seriously consider development of a SaaS solution and or a hosted managed offering right now is the time to be at work. What is the window to have a SaaS solution available in the marketplace? Hard to say, I think that’s going to vary considerably. If you think about enabling your business users to take faster advantage of your solution, not put barriers in place for them to begin working and seeing value, I think you can see that a SaaS solution is really the best path there. In a sense, you enable them to begin working with your product within weeks versus many months and you limit the amount of variables that are in play in their ability to see value without having a large project of systems integrators, consultants, the skill sets of the developers , decisions around configuration, decisions around the amount of features that can be supported in a B1, decisions around how to support the ongoing roll out of that application all being put in as barriers to the client seeing value. A SaaS solution is a way to simplify a lot of that and demonstrate some value immediately and then build from there with the business and of course they’re going to want to bring in their IT organizations as partners in many cases.

Craig Vodnik: Great, thanks for the answer Brian. We’ve hit the end of the webinar. Thanks again Brian for taking the time to share your knowledge and expertise with us. We hope this webinar has given you some helpful information on how to navigate your personal journey to SaaS. If you haven’t already, you can download the entire Shift to SaaS report for free at www.cleverbridge.com . If you would like additional information about moving to a SaaS model or would like to dig deeper into the data and statistics behind this report, we’re more than happy to share our insight with you. Just contact us at webinar@clevebridge.com. Check our exclusive blog posts about SaaS and other important digital e-commerce topics on our Building Keystones blog, www.buildingkeystones.com. Forrester Research also has an abundance of beneficial reports and in-depth information about the SaaS market. Go to www.forrester.com to learn more. If your business is already on the road to SaaS-ifcation, and are looking for an e-commerce partner with the technology and the expertise to handle the intricacies of SaaS and the B2B market please contact us at webinar@cleverbridge.com or visit www.cleverbridge.com or Twitter, LinkedIn, or Facebook. The presentation is available on

www.slidesure.net already so feel free if you want to download a copy of the presentation you can grab it there. Thank you all for your participation today and have a great day from wherever you’re calling.