The Three Things EVERY Aspiring SaaS Company Should Know!

3 Things Every Aspiring SaaS
Company Should Know
Ashley Stirrup, SVP of Product &
Solution Marketing – ServiceSource
Guest Speaker:
Amy Konary, Research VP – IDC
Research

1
Agenda
1
1
2
3
4
5
What’s happening in the SaaS market?
What does it take to build a SaaS business? What
are the economic realities?
The 3 things every aspirational SaaS company must know.
Who has successfully made the transition to a SaaS
business?
Q & A

SaaS Market Snapshot
Amy Konary
Research VP, Software Licensing and
Provisioning

$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2012 2013 2014 2015 2016 2017
Software Revenue
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2012 2013 2014 2015 2016 2017
SaaS/PaaS Revenue Packaged Software Revenue
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2012 2013 2014 2015 2016 2017
SaaS/PaaS Revenue Packaged Software Revenue Revenue from companies with No SaaS/PaaS
5.9% Growth CAGR (2012-2017)
4
XaaS Drives Revenue Growth
How Does Cloud in the Portfolio Impact Revenue?
Source: IDC, 2014
2012-2017 CAGR
19.8%

8.1%

91.9%

83.5%

16.5%

9.1%
-‐9.4%

3.9%

22.1%

Key Stats: Importance of Cloud
Traditional IT Dominates, but Public Cloud Drives New Growth
34%
of replacement
apps spend
(replacing
capability) was
on SaaS
$1 for every $6
spent on
software was
for SaaS
delivered
software
91%
of new apps
spend (new
capability) was
on SaaS
84% of net new commercial apps will be
developed specifically for cloud in 2014
31%+ of companies will source greater than
50% of total IT spend from the Public Cloud by
2016*
>80% of Global 2000 will still
have >70% of IT onsite in 2016
Source: IDC, 2014
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 5
$1 for every $5
spent on apps
was for SaaS
delivered apps

Key Questions for SaaS ISVs
6
Develop
Rebuild?
Architecture
Runtime Environment
Services
Single-stack or
Composite?
How Is It Built?
Operate
Ops Responsibilities
Hosting Solution
Hardware Location
Patch and App
Maintenance
How Is It Run?
Market
Customer type
Business Model
Monetization Strategy
Ongoing Support
Marketplace
How Is It Consumed?
Target customer: Who will be the buyer? How will they access?
Business Model: How will you make money? Manage costs?
Monetization Strategy: Metrics? Terms?
Ongoing Support: How do you grow accounts and keep customers?
Marketplace: Who sells it? Who promotes it? How do you reinforce value?

7
7
Monetization Strategy
•  Move beyond “Wild West”
•  From user pricing to usage pricing
•  Process and structure, but with flexibility

88
3 Things you must know
Small changes in retention, upsell and
cross-sell can have a huge impact
Usage data can help you optimize how
and when you reach out to customers
Roles and responsibilities are critical
to getting the right outcomes
1.
2.
3.

99
Accelerate time to profitability
On-boarding
Adoption
Training
Upsell
Cross-sell
Customer
lifetime
value
Time
Initial
Sale

1111
Best-in-class Customer Lifecycle Management
Acquire Onboard Adopt
Achieve
Customer
Success
Intelligent
Engagement
Upsell
Cross-sell
Renew
Proactive
Retain
Advocacy
Grow
Nurture

12
Roles and responsibilities
Customer Success
Manager
•  On-boarding
•  Adoption
•  Retention
Renewal Sales Rep
•  Renewals
•  Up-selling
•  Cross-selling

1313
Customer coverage models
Customer Success
Manager
Renewal Sales Rep
Marketing
Automation
System
Customers

1414
End user strategies
Customer Success
Nurturing and
advocacy
Feature
training &
adoption
High usage
of key features
Not using the
mobile app

1515
Maximize Customer Lifetime Value
Initial
Sale
Renewals
Up-Sells
Cross-Sells
Usage Charges
TIME
90%+ of
revenue is
captured
after initial
sale
CLV
($)

1616
Customer usage informs
which growth levers to pull when
Initial
Sale
Renewals
Up-Sells
Cross-Sells
Usage Charges
Before
Sale
CLV
How best
to drive
conversion?
Did the customer
get good value
from the product
or service?
What is
time to
value?
Is usage
meeting
expectations?
Is the service
underpriced
compared to usage?
What is the next
best offer based
on value derived?
What are the
right plans?
TIME

1717
Customer Lifecycle Management
GrowRetainAdopt
Increase adoption &
retention
Grow incremental revenue
Predictive analytics
for subscription businesses
*Based on internal studies, companies who worked with ServiceSource increased retention by 15 points
20%
increase in sales
productivity
15pt
Increase in
customer retention*
Selling Services
Customer Success
Renewal management, workflow
and analytics

1818
Who has successfully made the transition?

1919
3 Things you must know
Small changes in retention, upsell and
cross-sell can have a huge impact
Usage data can help you optimize how
and when you reach out to customers
Roles and responsibilities are critical
to getting the right outcomes
1.
2.
3.

20 ServiceSource Confidential Information
Thank you!
Q & A

The Three Things EVERY Aspiring SaaS Company Should Know!

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