Transition To Saa S The Challenges And Solutions
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Transcript of Transition To Saa S The Challenges And Solutions
Transition to SaaS: The Challenges and Solutions
Panelists:
Dani ShomronSaaS Expert, Calia Consulting
Janaki JayachandranHead – SaaS Specialization, Aspire Systems
Moderator:
Kanchana RajagopalanMarketing, Aspire Systems
For Webinar Audio, Dial in:
Conference LineUS: 1 888 436 6494/ 1 866 581 2411 (Toll Free)UK: 08000518866/ 08081681734 (Toll Free)Audio Conference ID: 30300218
Date: Thursday, September 24th, 2009 Time: 12:00 noon ET/ 09:00 AM PT/ 05:00 PM BST/ 09:30 PM IST
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Thanks for your participation and enjoy the session!
Housekeeping Instructions
Thought leader in Outsourced Product Development 1100+ product releases to date 80+ customers; 475 producteers 63% CAGR over the last six years Offices in Chennai (India), San Jose, CA, and London, UK ISO 9001:2000 certified
Awards
Ranked in the top 500 fast growing technology companies in Asia Pacific for 3 years in a row
Ranked 7th in BusinessToday Survey featuringthe Best Companies towork for in India in 2005
About Aspire
Dani ShomronSaaS Expert, Calia Consulting
•A recognized thought leader on the issue of SaaS, posting his ideas on ‘Dani’s Perspective on SaaS’ and lecturing to CIOs on SaaS.
•Held positions of VP Service Operations at a number of SaaS start-ups as well as Business and Operations Manager at Mercury Managed Services (now HP-SaaS), and has consulted on-demand companies on service operations and traditional ISVs on the transition to SaaS
•Co-authored the book ‘CIO Perspectives’ (Kendal Hunt Publishing, November 2007), contributing the chapter on SaaS and is now writing a book on SaaS Service Operations.
Panelist
Transition to SaaS The Impact on the ISV
Dani ShomronJune 2009
Agenda
• Do or Die• The paradigm shift• Changes across the organization• Recipe for failure• How do we succeed?
Do or Die• SaaS has become mainstream. Adoption – 76%• SaaS in no longer a point solution but strategic• Within five years 95% of ISVs will be delivering software
as a service• All new S/W will be offered as SaaS. • Beyond niche markets every ISV will deliver through the
Cloud• Companies that do not, will become obsolete, irrelevant• ISVs are getting it – but a ‘me too’ approach will fail
Total Upheaval• The transition to SaaS is a paradigm shift• Not another delivery mechanism• Selling a Service not a Product• Will affect every silo in the organization• Introduce new functions and entities
– Operations– 24X7 support– Service Marketing– Technical Account Managers– SLAs
Engineering
• Modify (rewrite?) architecture• Simpler development – single platform• Support ‘service readiness’• Support scalability & high availability• Release cycles reduced to weeks• Adopt agile S/W development (e.g. SCRUM)• Engineers interact more closely with end-users
QA
• Shorter release cycles• Support single platform (multiple browsers)• Performance and Load testing• Security testing• Test interaction between H/W & S/W
Operations
• New group with responsibility for ‘keeping the lights on’. 24X7
• Build, manage, monitor, improve.• Improve uptime, performance• DBAs, System & Network, App Engineers• Work with R&D, QA, Sales, Support, PS• The hub of the offering, process oriented
Customer Support
• User experience, customer sat and success are paramount
• Therefore support has important role, higher skills, higher pay
• All IT communications at your doorsteps• Customer services will switch to a 24X7 mode• Knowledge upgraded from installation /
maintenance to app level knowledge• Develop problem resolution skills
Sales• Substantial changes
– From Elephant hunting to cyber sales– From selling a product to selling a service– From perpetual to subscription– From hunters to farmers– From flying around the globe, wining and dining to closing deals over
the phone– Compensation up-front to spread over a year or more– Sales cycles shorten dramatically
• Partners, channels, resellers, SaaS aggregators play a more important role for maximum exposure
Marketing • Marketing and Sales become tightly coupled with a ‘Sales
2.0’ approach• More dependence on automation and lead generation tools• Guerilla Marketing thru web analysis tools, email
campaigns, newsletters, resource center, free trial• Less control over what information is available to potential
customers• Consider building an open community around users and
developers.
Finance
• Revenue stream and revenue recognition will change with an effect on the company’s financial outlook.
• Financial systems capturing and forecasting deferred revenue will be needed.
• Billing will become more complex, dealing with metering, collections, service level compensation and renewals
• New systems will need to integrate with the existing financial systems.
Professional Services
• Switch from installation and upgrades to application know-how
• Configuration, integration, reports.• Most of the work will be done remotely - traveling
time and costs will be reduced • Education services will drop part of the
curriculum pertaining to installation and maintenance
Legal• As the company will be selling a service, Service contracts will be
needed not software contracts. • New entities: SLAs, renewals and add-on services• Contracts with service providers such as hosting and ISPs.
Compliance• How would selling a service differ from selling a product?• Do you need to be compliant to all the requirements that your
customers are? • Would you need a SAS 70 certification?• Would your hosting provider need one?• All of these are still unclear in this emerging market.
Success is Not Guaranteed
• The more successful the ISV, the more entrenched in the old paradigm (SAP)
• Not in company’s DNA. Switch from product to service. Shift of focus to operations and customer service. Change the pace of dev and delivery.
• Expect push back - Internal resistance to change: R&D, QA, Services, Sales. (MMS)
• Fear of cannibalization of existing sales
So How Do You Thrive?• Paradigm shift – need C&V level commitment to
switch to SaaS model• Ensure a buy-in at all levels – make it a company
goal - get Sales involved at early stages• Offer a sub-system as a POC• Most companies will go thru a hybrid phase• If possible – spin out company, whether as a
separate entity or conceptually.• Integrate existing solutions.• Get help
Summary
• SaaS is here to stay• Transition is akin to a DNA transplant• Expect pushback• Get a full buy-in from key holders• Just Do It! It is worth it – get help
Panelist
Janaki JayachandranHead – SaaS Specialization, Aspire Systems
•Currently heads the SaaS Specialization Business unit at Aspire Systems
•In his current capacity, he is responsible for the business development and delivery functions focused on SaaS
•Key person in customer interactions and new customer acquisition by getting feedback and adding value to their business
•Instrumental in defining Aspire’s focus in SaaS and Cloud Computing. He closely monitors industry trends in SaaS and collaborates with Aspire’s SaaS CoE to build internal expertise
Feasibility Assessment
Architecture Aspects
Strategic Approach
SaaS Capabilities
Pushing to the cloud
Agenda
SaaS Benefit ScaleNature of your product
Graphics Oriented Highly Interactive Highly Transactional Typical IMS
Number of customized source code versions
0 to 3 4 to 6 7 to 10 >10
Number of current installations
0 to 25 26 to 100 101 to 250 > 250
Expected business growth
0% to 5% 5% to 10% 10% to 25% > 25%
Integration requirements with external systems
Very High High Medium Low
Stage of your product Declining Matured Growth Start-up
Customer acceptance for remote storage of data
Not Acceptable Very Concerned Less Concerned No Concern
Current spend on implementation
Low Medium High Very High
Number of releases in a year
<= 1 < 6 < 12 >12
Current challenge in selling on-premise
Lack of Features Customization Huge CAPEX Infrastructure Unavailability
LOW
Feasibility Assessment
HIGH
Parameters ChallengesScalability • Design to handle current and future loads
• Optimum use of hardware and other resources
Performance • Response time with/out concurrent users• Bandwidth constraints
Availability • SLA Compliance • Offline mode of working
Security • Physical and Network Security• Role based access• Data Encryption
Integration • Support for in-bound and out-bound integration• Standards compliance (HL7, cXML, etc.)
Extensibility • Custom field support• Support for dynamic forms
Multi Tenancy • Single code base• Independent Schema/Shared Schema
Configurability • Personalization/”Org”analization• UI/Business Rule/Workflow
Auditing • Entity/Data level tracking
Architecture Challenges
PROVIDERS
NEEDS
Demystifying the Cloud
Hardware
Framework
Application
IaaS
PaaS
SaaS
EC2, Azure, Rackspace
Force.com, Google App, Long Jump
Your own App.
Network Architects, Security, Hosting
Software Architects, Tested and Proven
Architecture
Developers, Rapid Development of
Functionality
Strategical Approach – Reuse Vs. Rewrite
SaaS PaaS
Is a concept Is a software/technology
Defines only the delivery model of your software
Defines how your software will be build and delivered
Software is delivered over the internet with no setup required at the customer end
Software is build on top of the platform and delivered over the internet
Allows reusing your content software Mostly requires complete rewrite of the software
Can easily support hybrid model (on-demand and on-premise)
Will be very expensive to support hybrid model
No lock-in on technology/provider Vendor lock-in
Business Volume
Product Size
Cost
Choosing your SaaS Maturity Level
Factors Level 1 Level 2 Level 3 Level 4
Time Very Low Medium High High
Transition Cost Very Low Low Medium Very High
Maintenance Efforts
Extremely High Medium Low Very Low
Scalability Extremely Poor Low Medium High
Engineering Skillset
NIL Medium High Very High
Customer Value Add
High Very High N/A N/A
Operational Efficiency
Very Low Low High Very High
Maturity Model Factors
Availability of Technical Skill Sets Choose the right maturity model – depending on your immediate and future
business needs Level 1 and Level 2 provide more value to customers, where as Level 3 and
Level 4 are intended to provide more value to the ISVs Evaluate virtualization as an alternate for multi tenancy Leverage pre-built SaaS Frameworks
Considerations for SaaS
Focus on functionality rather than engineering aspects Current software uses legacy technology – anyway it’s time to change Leveraging vertical/domain support by PaaS providers One stop solution for SaaS + IaaS
Ideal Scenario for PaaS
Availability of Technical Skillset Vendor Lock-In ROI (SaaS Vs. PaaS) Support for product vertical Support for Non Functional Requirements Evaluate platforms that does not mandate complete rewrite Ex: SaaS Grid Business Risk in storing data at an external location
Considerations for PaaS
Capabilities Details
Tenant Management • Adding/Removing/Modifying Tenants through software• Configuration/Customization of features
Metering • Recording of usage based on License Model• User based/Transaction based
Billing • Publish invoices based on metered usage• Payment tracking
Payment Gateway • Customers to make online payments• Integrated with Billing & Licensing
Licensing • Support for multiple license models• User based/Transaction based/Data based
Product Analytics • Usage of features/modules• Errors recorded/reported
SaaS Administration Challenges
Self Hosting
Data Centers
IaaS Providers
Pushing To The Cloud
Availability- complying with the SLAs Physical/Network Security Back-up of application and data Internet Bandwidth/Redundant Lines Storage Capacity Hardware Scalability Ease of upgrades
Hosting Challenges
Dani ShomronSaaS ExpertCalia ConsultingE-mail: [email protected] Website: www.calia.biz
For more details
Janaki JayachandranHead – SaaS SpecilizationAspire Systems E-mail: [email protected] Website: www.aspiresys.com
For more details
Kanchana RajagopalanAspire SystemsE-mail: [email protected] Website: www.aspiresys.comPh. No: +91-44-67404000
For more details
Questions