CloudFutures Software Vendors SaaS Migration USA
San Jose, CA Dec 7-8, 2009
Earlier this month I had the pleasure of attending the CloudFutures Software Vendors SaaS Migration conference in San Jose, CA. Endeavors Technologies was there to support our partner VisionApp in their launch of their new App Store: Piazza.
I really enjoyed day 1 of the conference and listening to keynotes from Terry Wise of Amazon Web Services and Mark Trang of Salesforce.com. However the presentation I found the most useful was by CEO of Saugatuck Technology, Bill McNee. Bill went into detail of what the upcoming SaaS market will look like and what to expect from the future. Here is what I took away not only from his speech, but also from the conference in general:
- The software industry is moving from product centric to services centric. There will be a new level of customer intimacy and ISVs who wish to be successful will have to rethink how they engage selling services. They will be required to leverage more web 2.0 technologies and social networking sites. It will be very important to make customers successful. Saleforce.com’s motto is “Make customer success a religion” by building a special customer success team (different than customer support team)
- SaaS is recession resilient with purchases getting stronger through 2011. Companies with 100-499 employees will be the most aggressive adopters of SaaS followed by 500-1000 employees. By 2014 cloud computing will capture 40% of ALL IT spending.
- On premise (traditional software) will bounce back in to 2010 but will not grow as fast as SaaS will. However, the on premise world is not going away, hybrid architecture will gap the bridge.
- In order for a SaaS Vendor to survive and be profitable, they must continuously reduce costs and offer Multi tenancy. Multi Tenancy is important if you want to be profitable. It is very important but it does involve extra development costs. If building for Saas, your customers may change, specs change, spend the money to see what the market wants and pretend you don’t know your current customers. ALWAYS start with your small customers. Operational costs between 14-35% of gross revenue are normal.
- SaaS will:
- Reduce IT infrastructure costs
- Reduce capital invetment
- Reduce IT mgmt/support costs
- Simplify systems mgmt
- Convert fixed IT costs to variable costs
- SaaS transition best practices
- Identify a new or adjacent business opportunity or dramatically expand the footprint/value proposition
- Size matters – salesforce will be important
- Every aspect of the company will be impacted by the shift to SaaS
- Don’t forget the IT infrastructure – lower costs, increase value
- Focus keeping your customer happy and content makes your success
- Pick your battles – rely heavily on partners
- API – very important for driving adaption. Have an API customers can easily build into. Don’t try to guess what they’ll do with the API, build it and let them surprise you.
- With on-premise infrastructure 30% of time is used on your business while 70% is used managing all of the “heavy lifting” (i.e. software development, server hosting, purchase decisions, heterogeneous hardware, etc). With SaaS you can flip the switch and spend 70% on your business and 30% on the heavy lifting.