Top tips for selling SaaS

Director Cloud Practice (EMEA)

Kevin Collins, Director Cloud Practice (EMEA)

In my last blog I covered the key challenges and benefits of implementing the SaaS model. In part two of the SaaS series, I’d like to offer some top tips for selling SaaS.

 

What’s the right SaaS model for you?

So you have decided to build your own application and it is now time to take it to market; but where do you start and what is the right model for you? Well first of all you have to decide if you are going to just licence your software and have a third party support it or you are going to stand up the software yourself and deliver it out as SaaS. While the first option may seem appealing due to the fact you are only selling software and licences it does come with a number of drawbacks:

  • You may have a service provider licence programme but essentially you will look like any other software vendor and that’s a competitive market place
  • You will have to manage all software updates for the partners or customers you have, whereas if you stand up a SaaS you have centralised control
  • You will have to train the partner or customer to set up and maintain the solution. With SaaS they just have to understand the user interface
  • Badly implemented solutions are likely to reflect badly on your software, even if it’s not your software that’s at fault
  • Ultimately you lose control of your intellectual property.

Delivering as a SaaS does mean that you will have to manage the infrastructure but the service providers are more mature now and can take much of the headache away, leaving you to get on and deliver a great software service to your customers. This is where you have to make your next decision: who is going to host your service?

 

Hosting and SLAs

Different service providers offer different packaged services; from basic infrastructure, where they offer an SLA only around the resource you consume and you manage everything else, to fully managed PaaS services, which not only include the platform but could also include backup, DR and even a managed database service. The choice is down to a balance between the level of control you want and the cost of management. The next point to consider when picking your service provider is ‘will your customers have data residency issues?’ in which case does your service provider have a DC in the countries you want to trade in? Last but not least, what sort of SLA are your customers going to demand and how are you going deliver it? It’s much easier to deliver an SLA if your underlying SP has the same SLA, i.e. you want 9999 up time and your SP offers 9999 up time.  Otherwise, you have to build the extra resilience into the software, which can add considerable complexity to your solution.

 

Pricing models

So you have decided to stand up the solution and offer out SaaS and you have picked you service provider; now how do you price this service so you can make money and yet be competitive?

Let’s start with granularity under the pay as you go model. Customers only want to pay for what they use, therefore the more granular the pricing the more comfortable the customer will be. Charging for concurrent connected users is a popular model as you only pay for the software when the system is running. The final charging model will depend on the type of service you are offering. For example, if you are data mining then you are likely to have only a few connected users but consume large amounts of resource, so concurrent connected users probably won’t be profitable. The other factor that can affect granularity relates to third party software you may be using in your service. If that is priced in three-month increments then that is likely to be the limiting factor.

Next, you have to decide what to charge; you could just divide the cost by 365 days in the year, but that is not exactly ground-breaking and is unlikely to succeed in the new world of SaaS. You have to be flexible and offer innovative price plans to your customers. Here we can learn a lot from the telecom providers. If you think about it the technology is essentially the same across all the big providers and the differentiation comes with how those services are packaged to meet the different customer usage requirements. This should be the same for SaaS, as in my opinion, success in this market will rely on innovative pricing plans.

 

Access and extensibility

Unlike on-premise software solutions, you can’t offload security as someone else’s problem; you have to ensure your solution is robust enough to be exposed on a public network and meets all the industry standards required for a multi-tenant service. Remember your reputation is only as good as your first breach.

With the increased popularity of BYOD within the industry, the most successful SaaS providers offer services that are compatible across all software platforms. These not only include Mac and Windows desktops but also smart devices running on iOS and Android.

Extensibility will become key as SaaS matures. Your product is unlikely to run in isolation within a customer’s enterprise and so how you pass data in and out of your system could be the deciding factor in whether you service succeeds over the competition. As stated in my last blog, other partners will be looking to integrate your service into a cohesive business solution for their customers, so the more support you can give them, with full featured APIs and pre-packaged connectors, the greater your success will be.

 

Where is ‘value add’ going to be delivered?

With traditional solution sales, the end user often has a direct relationship with the vendor for support e.g. if a piece of EMC kit goes wrong, an EMC engineer comes out to fix it.  In an XaaS model, however, the sale is to the next link in the chain.

This is for good reason and is demonstrated in the following example. An IaaS supplier sells resource to the SaaS provider, the SaaS provider then sits their software on top of it and the integrator packages it up with other services for an end customer. As a result, when problems occur they must be traced back through the layers of service to the point of origin within the supply chain, with each provider signing off to say the issue is not within their part of the service. That being said, it’s essential to know your supply chain well and document where your responsibility starts and ends.

 

In our third blog in the SaaS series we will explore the role of the SaaS integrator. 

 

Posted under Cloud Computing

SaaS and the cloud: the channel should look to service provider models

Director Cloud Practice (EMEA)

Kevin Collins, Director Cloud Practice (EMEA)

SaaS (Software as a Service) and the cloud is in a state of flux at the moment with traditional hardware vendors delivering converged solutions to service providers who in turn are looking to grow their IaaS (Infrastructure as a Service). At the same time independent software vendors are looking to move their products to SaaS to meet increasing customer demands.

 

Gartner recently reported that 71 percent of organisations in 10 countries have been using SaaS for less than three years. According to the research, investments in SaaS are expected to increase across all regions; 77 percent of respondents expected to increase spending, while 17 percent planned to keep it stable.

Licence to SaaS

The interest in SaaS comes with end users seeing the benefit in not holding onto a lot of software licences for long periods of time. They now want to be able to use the right quantity of licences ‘on demand.’ If they’re increasing the size of their workforce, they want to easily be able to upscale their licences. The industry is beginning to look to a ‘pay-as-you-go’ approach through SaaS – something service providers have been doing for years and have had plenty of success implementing.

 

Dispelling SaaS myths

Implementing the SaaS model is not necessarily a ‘cheaper’ solution but what it can do is focus finances exactly where they’re needed. A company can reduce licence expenditure in ineffective areas of the business while trying out a new system more cost effectively: they don’t have to fork out lump sums up front. This dynamic approach to software usage allows a company to try out whole new business models utilising specific software solutions for say – six months – and still keep a grasp of IT expenditure.

 

I believe SaaS is on a journey right now – we have started with IaaS which is becoming more mature; customers are running this quite happily now in a number of key areas such as test and dev, DR and big data analysis. This will lead to larger PaaS (Platform as a Service) requirement as partners start to write their own software that end users will consume as SaaS.  Business partners are beginning to evolve their business strategies. While offering IaaS they are becoming aware that the real opportunity is with the applications and application integration. Some partners will switch their focus to building applications in the cloud, while others will integrate these disparate applications into a cohesive business solution; it is this area that is largely untapped and very interesting.

 

Look at LinkedIn, Facebook, Google Mail and Twitter – they’re all managed independently and all have their own interfaces. Now here is the challenge, could you synchronise all the contacts across these applications? Probably yes. Could you segregate it so LinkedIn and Facebook entries were keep apart but were all in your Gmail? With tags maybe. Would it be robust and reliable? I doubt it. Could it be done reliably by everyone without any IT skill? Realistically no.

 

Moving forwards in the Big Data business world, we really can’t work in those silos. Therefore as SaaS matures there is going to be a great opportunity for business partners to integrate those applications and build connectors which will enable data to flow more freely and securely between them. This won’t be a short term process – it’ll be over the next five to ten years.

 

Key benefits

Essentially, with SaaS, management overheads decrease considerably as the interface must be intuitive and therefore less complicated to use. It should be as easy as setting up a personal Gmail or Yahoo account and managing that on a daily basis. You can offload the software complexity to experts who manage it for you and the interface is something you just ‘plug in’ and use.

 

Key challenges

A key challenge is security. Let’s take your Google account again; what are the consequences of letting the world see your personal calendar as a friend of mine did. No big deal until I pointed out that I could see a party he had three months ago, which included his address on the invite and he was telling the world he was about to go on holiday for two weeks “so help yourself”. Now map that mistake onto your business, multiply it by your staff count and overlay your compliance and you can see the risk you are taking. This is where your companies IT staff will deliver their value in the future. Far from being redundant in this new SaaS world they will be there to work with the business partner to not only deliver on the SaaS that is being demanded by the business but also ensure it is done in a compliant, secure and efficient manner.

 

Learning from service providers

In the future it will become more important to remove yourself from the traditional ‘solutions sell’, or in other words, you sell a solution, move on to the next piece of business, returning in two years to hopefully repeat the process.

 

It’s a ‘hands on’ approach now, which is new to some partners in the channel. It’s about being in touch with the customer every single month and being flexible enough meet customer needs. Similar to the way a service provider works, resellers are dealing with smaller amounts of money up front but over the long-term, continuous billing can be rolled out to reduce customer churn and improve loyalty. Resellers offer the scalability service providers need. This isn’t going to be a quick win. Resellers need to work with trusted and experienced partners to help them to migrate slowly from traditional solution sales today to an annuity based XaaS business in the future.

 

Read our second blog in the SaaS series to learn ‘top tips for selling SaaS’ coming up next week.

 

Posted under Cloud Computing

The channel’s need for Open Source Sofware (OSS) strategy

 

OSS expert, IT software expert

Ed Bateman, Director Storage, Software & MOB Business EMEA

Most businesses today are looking at ways to further improve IT efficiency, to provide scalability, flexibility and to lower overall costs. As a result, I believe Open Source Software (OSS) and what it offers has never been more relevant to helping address these challenges. OSS continues to grow in prevalence and relevance, millions of mobile devices rely on the technology in one way or another without us even realising it. From standard Operating Systems (OS) to virtualization, from middleware technology to applications, the number of systems and devices using this technology continues to increase substantially. Consequently, it’s vital the channel embraces and understands OSS to best provide choice for customers.

So, what is open source?

OSS is how all software was originally developed. Software applications are built from source code but OSS generally refers to software for which the source code is freely available to the public for personal use. OSS source code can be shared with all developers for modifications, which enables programmers to build and maintain OSS technology for a faster turnaround on making improvements, increased flexibility and some may even argue: better security.

What are the key benefits?

OSS available on the market today is a collaborative, public offering which is highly interoperable with existing systems, making deployment much simpler and more cost effective. OSS offers the opportunity to increase the quality, integration and pace of software throughout an entire organisation, lowering costs and improving the flexibility of IT infrastructure.

No vendor lock-in

  • As the source code is available to all, users aren’t locked into specific vendors, developers or costly software upgrade cycles. Developed through Open Standards, OSS gives freedom of choice, more control to switch vendors and makes upgrading or scaling up/down costs much lower.

Reduce Total Cost of Ownership (TCO)

  • This is a major challenge most of today’s organisations. With no software licensing fees OSS provides a clear advantage over proprietary software as it requires less hardware power to deliver the same tasks as conventional server solutions. Companies can also stay in control of the software due to it adaptable nature, whilst keeping costs down due to this software’s low maintenance requirements.

Flexibility over proprietary systems

  • Of paramount importance in the IT infrastructure arena, OSS allows for easier migration to new hardware and offers a higher level of customisation through access to the source code.

Scalability

  • OSS is hardware independent – a feature that’s built in at design level, making OSS very scalable. This enables IT managers to meet their IT business needs for today and tomorrow, reducing overheads and helping to meet budgets.

Security

  • With the influx of private, personal and sensitive data currently being handled by organisations, security is now more important than ever before. OSS by its very nature is ‘open to all’ and since this growing ‘community’ of users regularly scan code for errors, potential security exposures are spotted early and bugs are fixed rapidly, making OSS inherently more secure.

What does this have to do with the channel?

To take advantage of the growing number of opportunities available to the channel, thanks to open source, a confident knowledge of the technology is essential. Organisations require specific expertise and skills to ensure that open source solutions are successfully implemented to make the most of what they have to offer, such as the financial gain.

By adopting an open source strategy, companies can achieve considerable cost savings in terms of reduced upfront capital investment and ongoing maintenance as the ‘open’ aspect of OSS gives users the opportunity to adjust their IT environments with ease as a response to ever changing business requirements.

Open source technology enables partners to offer high quality, highly available best-of-breed solutions to customers, thus presenting the best option for maximising the efficiency, security and cost effectiveness of computing and cloud enterprises.

Posted under IT infrastructure, IT Software

Cloud Computing: Forget the hype, what are the roles the channel can play?

Cloud computing specialist

Stephen Ennis, Director of Services, EMEA

A real opportunity

Having worked with cloud services for some time now, I’ve seen plenty of confusion around what’s reality and what’s hype where the Cloud is concerned. With well respected analysts like Gartner predicting Cloud Computing services will become a £95.7 billion ($150 billion) market in the next two years though, resellers do need to act now to seize a slice of the opportunity.

In my experience, resellers across EMEA want to know how they can step up to take real and practical cloud service propositions to market but it can be pretty daunting to work out a strategy if they’re not sure how to deal with the Cloud in general. One thing’s for sure, they need to look at achieving high ROI in their local markets.

So… how do they do this? Here are a few tips:

  • Look at how to expand your product portfolio to include the most in-demand cloud solutions for your market to quickly develop technology expertise to drive business growth
  • Work with a well-known IT partner who has the necessary skills and who possesses local market knowledge to enable you to develop strong know-how in cloud services
  • Recognise that cloud is not dissimilar to other technologies in that customers need it to be positioned, evaluated, implemented and integrated into their IT environment. Also, feel assured that the channel can fulfil these key customer requirements very well

The roles of the channel:

To deduce what cloud strategy can work best for you and your customers’ needs, you can consider five roles. You should be aware you can fit into one or more of these roles and can take on different roles depending on your customer engagement.

  1. Cloud Advisors: If you help customers demystify and understand the Cloud and provide advice on key decisions, this is your role. If an IT manager is considering outsourcing some applications, you as the Advisor, are there to offer counsel on which functions to move to the Cloud, you outline the pros and cons and create the migration strategy as well as complete a risk versus reward analysis. Building customer trust and establishing early credibility is the key to being successful as a Cloud Advisor.
  2. Cloud Builders: If you build private Cloud infrastructures either on or off-premise for your customers, you fit into this category. You will deliver cloud solutions, often turn-key, designed and built for your individual customer’s requirements. If you’re a Cloud Builder reseller you don’t generally own or operate the resulting cloud solution.
  3. Cloud Providers: Your role is similar to that of a Cloud Builder – you create cloud infrastructures. Where you differ is that you’ll deploy this “as a Service” (XaaS) and will host it yourself, making it available to your customers. As a Provider, you need to take more of an advisory role. You help your customers understand business transformation and how to evaluate the financial and technical merits of an off-premise cloud solution.
  4. Cloud Resellers: Quite simply, you sell cloud services from another organisation or a supplier. You help your end user select the correct cloud service(s) and evaluate which solution out of your portfolio best suits an organisation’s needs. For this role, you require in-depth knowledge of your customers’ businesses, which can often be a challenge if you’re not working with the right partner to show customers how to implement the Cloud.
  5. Cloud Integrators: You construct ‘the glue’ between private and public clouds or between traditional IT and other cloud infrastructures. You help take away much of the complexity of cloud solutions by providing customers with fully integrated multi-dimensional solutions whilst incorporating the best of traditional IT and cloud.

The reality of Cloud Computing for the channel

Resellers can take on many roles. If we consider a traditional IT landscape today, you may have a private cloud being built on-premise (Cloud Builder role) which may also include some external cloud services from a 3rd party (Cloud Reseller role) and they’d be integrating those together (Cloud Integrator role). In that scenario the reseller would be fulfilling three of the aforementioned channel roles.

Start with defining your role

Using these categories to define your own role in the Cloud Computing phenomenon is a great place to begin. Working with an experienced partner can reassure you about what roles you can fulfil and more importantly, can ensure you’re getting the in-depth training you need to advise customers proficiently. This will enable you to help customers make more informed business decisions for today and tomorrow’s cloud requirements.

Posted under Cloud Computing