SaaS Business Principles 1/11/2017 Copyright Thomond Technology SaaS Applications Are Here and Real 1/11/2017 Copyright Thomond Technology Managing a SaaS Business SaaS Business Principles SaaS Challenges Financial Matters Marketing SaaS Telemarketing Selling SaaS Attrition & Renewals SaaS and Alliances Supporting & Consulting SaaS 1/11/2017 Copyright Thomond Technology Talk on First Three Today SaaS Business Principles SaaS Challenges Financial Matters Marketing SaaS Telemarketing Selling SaaS Attrition & Renewals SaaS and Alliances Supporting & Consulting SaaS 1/11/2017 Copyright Thomond Technology SaaS Business Principles Pay as you go • Monthly subscription as the pricing basis • But does not need to reflect contract Customer Success • It’s a Service not a product Have employees to educate/talk to prospects • If Not, then build it and they WILL LEAVE Accept Attrition as a fact Renewals are critical Multi Tenant / Single Tenant Architecture Shared Risk – Opex not Capex 1/11/2017 Copyright Thomond Technology SaaS Business Principles Ease of Use Time to Value is significantly better Bi-Furcated Distribution model on company size Hub Based Selling Free Trial for appropriate time period • Must be supported by rigorous process Data Export Facility so that Customers feel they can easily get their data back 1/11/2017 Copyright Thomond Technology SaaS Business Principles Seed and Grow (be willing to start small) Be Open about Availability and Performance of Service Annual Contracts/Size for Discount Manage Business metrics on a Monthly basis Support is part Service Price Multiple Service offerings differentiated by users/ functionality 1/11/2017 Copyright Thomond Technology SaaS Business Principles Service Integration with other SaaS / OnPremise systems Service is Multi Lingual/ Multi Currency Webinars for Education / Soft Selling Multiple small events for Customer meetings / Viral Marketing Public Privacy Statement on all Websites Public Terms of Use on all Websites 1/11/2017 Copyright Thomond Technology Managing a SaaS Business SaaS Business Principles SaaS Challenges Financial Matters Marketing SaaS Telemarketing Selling SaaS Attrition & Renewals SaaS and Alliances Supporting & Consulting SaaS 1/11/2017 Copyright Thomond Technology SaaS Challenges Takes a long time to be profitable Generating Cash flow can be difficult Difficult to have multiple distribution channels System Integrators make less money versus on-premise solutions SLA (Performance, Reliability, Security etc.) Low Market Acceptance of SaaS / Cloud Computing 1/11/2017 Copyright Thomond Technology SaaS Challenges Hybrid Competitors trying to confuse positioning Data Protection Attrition – • manage and model Renewals Customers are used to being regularly visited by traditional sellers 1/11/2017 Copyright Thomond Technology Managing a SaaS Business SaaS Business Principles SaaS Challenges Financial Matters Marketing SaaS Telemarketing Selling SaaS Attrition & Renewals SaaS and Alliances Supporting & Consulting SaaS 1/11/2017 Copyright Thomond Technology Financial Planning in SaaS Revenue Model Σn = n(n+1)/2 • Invoiced • Deferred Revenue • Off Balance Sheet Pricing by unit per month • Base Price • Multi Service Offering • SMB to Enterprise Offering Profile of New Business versus Add On is very different from traditional model 1/11/2017 Copyright Thomond Technology Financial Planning in SaaS Annual Contracts Multi Year Contracts What is the correct discounting Strategy? Contribution by market segment • Cost per order € • Start at SMB, Enterprise or Both Is there an indirect model that is more effective than direct option? 1/11/2017 Copyright Thomond Technology Financial Planning in SaaS How many Sales people are appropriate • OTE, Quota, • One size doesn’t fit all What level of supporting resources (Ratios) • • • • 1/11/2017 Sales Engineers – In Country Sales Engineers – Hub Inbound Telemarkeing Outbound Telemarketing Copyright Thomond Technology Financial Planning in SaaS Cost per lead • By Source, By Market, By Campaign Pipe to Spend • By Source, By Market, By Campaign Number of new business leads per sales group • (((Quota * 0.8 * No. Of AEs * % New Business) / (Average Deal Size))/ Conversion Rate) 1/11/2017 Copyright Thomond Technology SaaS Business Principles 1/11/2017 Copyright Thomond Technology