The Numbers Behind A Successful SaaS Business
Posted by Jim in Migrating to the Cloud on April 6th, 2010
Kudos to David Skoks at For Entrepreneurs, who has created a really great blog site that’s full of good info. In particular, his post on SaaS Metrics is worth sharing because it goes into great detail on the economics of building a successful SaaS business – that is, selling software as a service.
Warning: Skoks’ article is not a typical (i.e. short) blog post. It’s practically a whitepaper (complete with charts and graphs), so give yourself ample time to read it. I think he’s really onto something with his breakdown of SaaS business goals: Profitability, Cash, Growth, and market share.
I commend the software companies who have made the transition to selling SaaS instead of installed software. It can be a tricky move, particularly in the areas of sales and marketing. SaaS businesses need to look at customers differently than when they sold installed licenses. The focus expands from just generating new leads / new customers all day long. They begin to also work the sales cycle of renewals to increase Monthly Recurring Revenue (MRR). Sustained success means a shift in how they market, as well. Think “retention programs” in addition to “demand gen.”
It’s interesting to watch the progression, as so many software providers switch to selling only SaaS. Many of our application partners (Quickbooks, NetSuite, WebEx, and many others) who once sold installed software have made the transition to SaaS. It’s not just the wave of the future. It’s the wave of right now.
So, even if you don’t sell software, you can still get “in the cloud” from an internal perspective and optimize your infrastructure by making it SaaS-based. It’s cheaper, more secure, and more reliable than the old way.
There are many different ways to approach it. At Bi101, we transition lots of different businesses to SaaS-based infrastructure and I can say for certain that long-term success and ROI requires each organization to examine their unique business and look for the biggest software / hardware capital expenses, whether it’s a pricey financial management application, CRM package, etc. Our consultants are here to help, if you want to continue the conversation.
Eliminate the “Version Control” Police with Google Docs
Posted by Jim in GoogleApps & Postini, Messaging & Collaboration on March 22nd, 2010
Google Docs from Bi101
Picture me scrolling through my Inbox, scanning for attachment icons. Where oh where is the latest version of that document? Wait, maybe it’s in my Sent Items. That’s right; I think I made the last round of changes and sent it back. More scrolling and scanning…
Or did I save it down to a folder? More searching… More wasted time. More uncertainty about whether the document I eventually found and am now editing is in fact the latest one.
I know you’ve been there, too. We are all flooded with documents (particularly in the form of email attachments). Whether it’s searching through email to find “the latest” or comparing timestamps on docs that you saved, managing “version control” is a real pain and a big inefficiency – especially at highly collaborative companies.
It’s time to put an end to this! Whenever possible, please boycott the practice of sending email attachments back and forth with clients and colleagues, as a rickety form of collaboration. Email is for communication, not collaboration! Plus, there are great solutions available that increase collaboration, rather than hinder it.
Google Docs to the Rescue
Personally, I’m a fan of Google Docs (a part of the Google Apps suite.) It allowed me to quit being the version control police and focus on actually being productive. I won’t go into how it works. Many of you already know. If not, check out the little YouTube video below to see the app in action.
Suffice it to say that I no longer engage in what I described above. I just log into Google Docs and grab the latest work-in-progress. Collaboration is a good thing!
Feel free to connect with us to get a free trial of Google Docs.
Cloud Computing Continues to Grow in the Enterprise
Posted by Jim in Cloud Technology News on March 1st, 2010
Recently Gartner announced that worldwide software-as-a-service (SaaS) revenue is forecast to reach $7.5 billion in 2009, a 17.7 percent increase from 2008 revenue of $6.4 billion.
The cloud computing market continues to evolve, with more vendors creating cloud computing offerings and more companies becoming comfortable moving to the cloud.
Bi101 deploys cloud apps to both the enterprise and small business. From our experience, two computing areas are driving both groups to the cloud: content, communications and collaboration (CCC) and customer relationship management (CRM). Garner confirms that these two areas are driving the transition to cloud computing within the enterprise:
Worldwide Software Revenue for SaaS Delivery Within the Enterprise Application Software Markets (Millions of Dollars)
| 2009 | 2008 | |
| Content, Communications and Collaboration (CCC) | 2,573 | 2,143 |
| Office Suites | 68 | 56 |
| Digital Content Creation (DCC) | 62 | 44 |
| Customer Relationship Management (CRM) | 2,281 | 1,872 |
| Enterprise Resource Planning (ERP) | 1,239 | 1,176 |
| Supply Chain Management (SCM) | 826 | 710 |
| Other Application Software | 472 | 387 |
| Total Enterprise Software | 7,521 | 6,388 |
Source: Gartner (November 2009)
What’s interesting about this cloud computing evolution is a single SaaS offering’s ability to provide the same impact to both the enterprise and small business. Rarely have we seen this in software markets of the past; the enterprise and SMBs have typically required vastly different offerings, in terms of complexity and scale. And it was rare that a single vendor could deliver both. Now, the same version of Google’s Postini can serve 15 users or 1,000 users equally well.
Cloud Computing Value Differences
The drivers of the shift to the cloud are different though. From what we’ve experienced, enterprises are switching to offerings like Google’s Postini for email security and encryption and Google Apps for collaboration to lower IT costs. Enterprises typically have the sophistication and resources to have in-house solutions already in place. Cloud apps simply deliver the same functionality at lower costs, allowing companies to move from expensive legacy solutions like Microsoft’s Sharepoint to SaaS offerings.
For smaller businesses, the main drivers of cloud applications are increased productivity, security and reliability. Small companies typically don’t have a sophisticated WAN or LAN already in place to provide remote access for collaboration and data sharing, so cloud computing expands their computing power at a very reasonable price.
Gartner predicts that SaaS revenue will continue to increase in the enterprise application markets through 2013. It will be interesting to compare these growth rates to the SMB market growth rates, and to see which segment provides a greater overall impact to the economy.
My bet now is that cloud computing will have a greater economic impact in the SMB market, allowing small companies to dramatically increase productivity to contribute more jobs to the economy.
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The Value of Cloud Computing
Posted by Jim in Migrating to the Cloud on January 22nd, 2010
- Image via Wikipedia
SaaS and cloud computing have changed the landscape for businesses worldwide, from SMBs to the enterprise.
No longer do you need to purchase expensive hardware and software for many business functions. If you have an Internet connection, you can move much of your business computing to the cloud.
What’s the cloud? “Cloud” is a metaphor for the Internet. It’s an abstraction of how networks of computers are connected, in the old days by LAN and WAN, now by the Internet.
Over the last 5 to 10 years more and more companies have been delivering software that’s accessible from the Internet. They “own” the software and deliver it as a “service,” instead of having customers own and maintain it. Software-as-a-Service, or SaaS, is an application that businesses access and use via the Internet. The actual software applications reside on servers all over the web, in the cloud.
Why is there so much buzz about cloud computing?
- Reduced Cost — You typically pay as you go instead of making an upfront investment
- Security – SaaS is often more secure than your existing network
- Reliability — Redundancy in the cloud ensures it’s always on and accessible from anywhere
One of the main drivers of the move to the cloud is cost; for many businesses, it’s cheaper to use software-as-a-service in the cloud than purchasing and maintaining software in-house.
Cost savings should be evaluated on a case-by-case basis, but analysts are starting to make the research available to the public.
For a fun overview of the cloud, check out this video created by Salesforce. They have been pioneering the “No Software” model for a decade.
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Postini Adds Message Log Search
Posted by Jim in Cloud Technology News, SaaS for Financial Management on January 19th, 2010
If you’re using Google’s Postini for email security and encryption, tracking your email history just got easier.
By February 4, 2010, Google will add this helpful feature to Systems 5, 6, 7, 8, 9 and 200.
From Google:
With the new Message Log Search function, users can now track what happened to an inbound or outbound message — whether it was delivered, quarantined, archived, encrypted, or other disposition — and see if the message triggered a specific filter. Message Log Search also enables users to track all messages for a specific sender, recipient, domain, or IP address.
While the message security service stores information about your messages in a log (such as the message header and how the message was processed), it does not store the actual messages. If you want to save search results for later analysis, you’ll be able to export a .csv file.
This is a nice feature for Postini users and will help us to determine what has been happening to our messages: how messages were processed, filtered and delivered, and it will give insight in the traffic patterns for our domain.
We’ll try running some searches on the data using a variety of criteria and queries and let you know what we think.
