I just completed the last two stops in a multi-city tour of full day educational sessions on best practices for rolling out Software as a Service (SaaS). During the past couple of weeks I have had the privilege to present to and learn from audiences in Boston, Santa Clara, Tel Aviv (a hotbed of startup activity), and London. I was also privileged to be able to call on the tremendous presentation skills and knowledge of some experienced people that live the business of cloud services day to day. For anyone interested, all the presentation material is available on slideshare.
I would like to take this opportunity to thank:
There were some key themes that emerged at these events…
Churn is something we all have to deal with in the software industry, whether it is repeat customer churn (hard to measure) or subscriber churn (easier to measure).
Repeat customers are those that come back for more (seats, years etc…) – and in order to measure churn you have to define what period of time needs to pass before you decide they are not coming back. Subscribers sign contracts that have known end dates – so it’s much easier to keep track of churn.
There is no question that SaaS as a business model is becoming more and more attractive. According to Saugatauk Technology, Inc., 45% or more of new enterprise IT spend will be devoted to cloud-based applications by 2014.
Even today, SaaS revenue growth remains much higher than on-premise software growth rates. So it’s no surprise that most organizations are beginning or at least thinking about transitioning current business models to include SaaS. Chances are, YOUR ORGANIZATION IS ONE OF THEM.
These days it seems like there are multiple opinions about the decision making process of CIO’s as it relates to software license acquisition, management, and their respective budgets. Multiple industry participants will wax eloquent on what the current generation of CIO’s will choose as their next move as a software acquisition strategy. Will they try to implement some sort of Software Asset Management tool to help them tag and track software which they have licensed (and as the argument goes, thereby reduce their expenses by only paying for what is being used if their contract allows for that), or will they go to a SaaS model where pay-per-use becomes a standard service model that achieves the same goal, albeit quite differently? View this article for one take on the CIO decision making process: http://www.siliconrepublic.com/strategy/item/17491-the-cloud-is-more-secure/
As the head of new product development at SafeNet one of my key areas of focus is around bringing to market the types of tools and services ISVs need to help them manage the shift to the cloud – as you can imagine this means that I spend a lot of my time keeping an eye on what the industry is buzzing about!
Most people in the US subscribe to bundles of TV content that is packaged through a 3rd party. There might be 3 or 4 tiers to an offer. A while ago, those people that packaged TV content for you also started to offer on demand services (or pay-per-view). Over the last few years – the ratio of the on demand to the all-you-can eat model has started to shift. Increasingly people use Netflix, Hulu, and iTunes to consume only the shows they want to watch (and usually ad-free too!). Read how an estimated 800,000 US households abandoned their TVs for the web.
The math is pretty simple. Most people are lucky if they spend less than $700 a year for cable. If you could buy only the shows you want to watch at $8.99 with Netflix ($110/year) and 15 must see shows at $40/season – $600. Together that adds up to about the same you might pay for an entry level subscription. If you watch more than that, go with your monthly plan. For a lot of people – the ability to just consume what they want is compelling and driving a big move towards pay-per-view. The internet and the iPad are also changing how you can get and watch content.