Getting the right SaaS business model

Advice 2010-02-22 15:27

Keith Bates, chairman of the Cloud Computing Centre offers some guidance for a successful SaaS

From creating the right pricing model to gaining support in the sales process and ensuring ongoing innovation, just what are the questions organisations should ask of a potential managed services provider? Keith Bates, chairman of the Cloud Computing Centre offers some guidance for a successful partnership.

6. Can I expect support in building up the market? Look for sales collateral – from a complete micro web site that can be rebranded by the ISV to brochures, editorial and white papers to support the new business model.

7. What about during the bid process? Does the provider offer sales education and support, including coaching for the sales team to ensure they understand the benefits of cloud computing? Will the company be prepared to undertake joint sales activity, especially in the early days, to get the new business model off the ground? The chance to leverage proven expertise in SaaS delivery can transform the viability of the sales process.

8. How can I ensure my software is optimised for the Cloud? Whilst ISVs and VARs are experts in producing software for on premises solutions, when it comes to cloud computing there are software and environmental re-engineering issues to address. Can a provider offer support, guidance, advice, even training courses for software engineers? Unless organisations can work with the right experts to re-engineer the application for the cloud, there is a very real risk that customers will experience performance issues that could undermine the new business model and compromise profitability.

9. What about Business Innovation? ISVs might expect technical innovation as part of the contract – although it is always worth checking the small print – but what about business innovation? Can the provider work with the business to support ongoing change, to add new services or meet new requirements?

The move from on premise to SaaS is a significant shift in business model and will undoubtedly result in continual change for the foreseeable future. The right partnership with a managed services provider that can offer proactive consultation could be essential in resolving problems and delivering the innovation required to evolve the business.

10. Can I get a Complete Solution? It is essential to remember that an ISV’s customer base will still have desktop equipment and peripherals located on site and determine just who is responsible for the support of that equipment. Just what is delivered in the datacentre agreement and how will that affect the end customer? Does the datacentre provider take ownership of planning and supplying telecommunications, for example? Nothing can undermine a customer relationship quicker than overseeing a datacentre provider quibbling with the ISP over who is to blame for poor performance.

Ensure that the lines of responsibility are clear and, preferably, look for a provider that will take ownership of the complete solution – from datacentre to PC – to boost overall performance levels and, hence, deliver a better service to your customers.

In conclusion, while ISVs are understandably focusing on the technical issues associated with a move from on premises system delivery to SaaS, there is a raft of operational concerns that must also be considered for this new business model to be successfully delivered. The right contract, based on a viable pricing model and relevant SLA, combined with proactive sales support and consultancy from the provider cannot only ease the transition between business models but, critically, deliver the expertise and experience to provide ISVs with a significant advantage in this new marketplace.