Cloud Strategies Services for SaaS Vendors
The challenges of SaaS startups and companies transforming to SaaS are different.
Cloud Strategies can help.
Each client’s requirements are unique, depending on the objectives of the client, the type of SaaS company profile, the stage of the company’s adoption of a SaaS model, and the resources required. Cloud Strategies can provide an independent assessment of a software company’s SaaS strategy for investors and boards, or work directly with the company to maximize its opportunity for success. Cloud Strategies can work at a high level providing an assessment and recommendations in an advisory role, or become an integral part of the company team to make their SaaS Business Work.
SaaS Company Profiles
The SaaS delivery and business models encompass a very wide variety of types of companies. The SaaS strategy will vary greatly, dependent on five primary characteristics of the SaaS company.
Greenfield or Established Businesses
Start-ups have the advantage of a clean slate, but don’t have the resources, image recognition, or channels of established players. Existing software vendors have many advantages, but the transition to SaaS can create competition with their existing products, additional working capital requirements, and issues with their existing channel.
Low or High Price Offering
Many basic SaaS products like Dropbox have a base edition that is free and entice their customers to move up to a paid version costing $5 to $10 per user per month. SaaS products vary in price from a few dollars per month for products like QuickBooks Online at around $30 to $60 per month to enterprise products such as NetSuite or Saleforce generally cost around $50 per seat per month with a wide variation up or down depending on the features. Some high-value, specialized SaaS products may cost as much as $600 per month. Services costs add significantly to the total cost of implementation in large, complex systems. The strategies and tactics for these SaaS offerings vary widely based on their price.
Degree of Services Required
Simple SaaS products have essentially no setup, or may have a minimum end user configuration such as setting up file locations for Dropbox. SaaS products have “Customer Self-Service” as a key attribute, allowing the company and the user to perform more of the setup operations for moderately complex products such as QuickBooks Online. More sophisticated products like NetSuite software have configuration which are beyond the scope of the end users and will generally be performed by the SaaS company, their VARs or other Implementation Partners. SaaS products that must integrate into the Enterprise will require services for integration into those products. Finally, for SaaS products that are not fully configurable, or for very complex operations, some customization may be required in modules that interface to SaaS products.
Distribution Model
SaaS sales models vary widely, but all are more internet focused. Freemium models are common for low cost products which can provide a base level of functionality at no cost, ideally paid for by advertising revenue. The intent is to provide sufficient value to “up-sell” to the paid version, typically costing $10 or less per month. These SaaS products are sold by “no-touch” internet sales and marketing. Products that are somewhat higher priced rely on internet marketing supported sales with the potential for online chat. Enterprise SaaS products are sold directly or through a channel, due to their complexity and likely services component. These Enterprise SaaS products are heavily supported by internet marketing which helps educate the customer and reduce the direct sales costs.
Markets Served
Strategies vary greatly depending on the horizontal or vertical market served. Different markets have differing propensities to move to SaaS and different competitive landscapes. Generally SMB markets have a greater demand for SaaS with the desire to reduce in-house IT complexity, a reduced need for customization, and reduced integration requirements. Certain vertical markets such as medical and financial have greater security, up-time, and compliance requirements which may increase the time to move to a SaaS solution. Consumers are now very comfortable with “applications in the cloud”, and do not have a “switching cost” from current applications. Consumer markets are most cost conscious and can be highly competitive. Cloud Strategies will work with you in whatever market you focus on.
Who We Work for
Venture Capitalists and Private Equity Firms
Providing assessments and due diligence reports to evaluate the company’s SaaS business strategy, or to scope the opportunities and risks to transforming a software business to a higher value SaaS model.
Company Boards
Providing independent assessments to explore the opportunity for the company to move to a SaaS model, or assist in the implementation of a SaaS model.
Corporate Management
Providing expert SaaS resources to facilitate the financing, building, and running of a successful SaaS businesses. We work with company management to develop and build a successful new SaaS company or transform an existing software company to successfully support a SaaS model. We can augment the company’s capabilities with the SaaS business expertise to help make the company a SaaS success.
What We Do
Contact Us for a free hour review of your SaaS Strategy.
