The Cloud And The Accelerating vs Deflating Time To SaaS Revenue

Accelerating vs. deflating time to SaaS revenue

Over the past 8 months, we have seen an increase in the number of ISVs contacting us to help them plan a roadmap to SaaS. After reviewing these conversations, a trend has started to emerge.

1. On-Premise ISVs see the need to begin the journey, typically due to competitive and market pressures.
2. They understand and want to get to the technical end game — a true multi-tenanted, singular code basis — but they don’t know how or even why they should get there.
3. They want to get to that end game as quickly as possible.
4. They haven’t really evaluated and understood the financial implications of moving from a perpetual license model to a monthly recurring model.
5. They don’t understand the changes needed in their support and operations teams to maintain a true SaaS business.

Many ISVs are testing the SaaS waters by simply re-branding on-premise solutions as SaaS and developing ‘one off’ managed hosted solutions for each customer.
Unfortunately, these approaches are fraught with problems and they set the ISV up for failure. Without understanding the financial and operational impact of the above, companies often find it hard to project profitability with their SaaS solutions; many abandon their SaaS plans.

From a financial perspective, one-off ‘managed hosting’ silos for each customer can be very expensive and these costs are often passed through to end clients. End customers in turn don’t appreciate the value of the service as ISVs struggle to create the sales and marketing messaging for SaaS. This compounds the problem and results in a decline of sales. In addition, companies often struggle to understand the cash flow impact of moving from large perpetual licenses to smaller, monthly recurring revenue models.

Operationally, ISVs struggle to provide the necessary changes in their support organization to enable true 24x7x365 support. The technical skill set(s) and operational processes needed to support always-on operations with SLAs are vastly different from a traditional support model. Many ISVs don’t appreciate the increased number of technical staff required to enable a 24/7 operation (especially if you have 100’s of separate silo’d client implementations). They typically bootstrap this vital function by having fewer resources on call all the time. We have seen incidents in the press where this has backfired. Tired resources make mistakes leading to more outages and downtime due to stress related human errors. It also brings up the interesting topic of liability. Many companies today are not aware of HR laws that prohibit excessive working hours.

By Tenzing

Founded in 1998, Tenzing is a managed hosting company trusted by leading software-as-a-service (SaaS) providers and Ecommerce systems integrators to deliver business critical applications to some of the world’s largest companies and most recognizable brands. Tenzing’s mission-critical hosting infrastructure, mature IT Service Management (ITSM) practices, and comprehensive application-level Service Level Agreements (SLAs), enable the reliable, secure, and scalable delivery of complex SaaS and Ecommerce applications. Tenzing is ISO 27001 and SAS 70 Type II certified with data centres in Toronto, Vancouver and Kelowna, B.C. For more information, visit www.tenzing.com.

About CloudTweaks

Established in 2009, CloudTweaks is recognized as one of the leading authorities in connected technology information and services.

We embrace and instill thought leadership insights, relevant and timely news related stories, unbiased benchmark reporting as well as offer green/cleantech learning and consultive services around the world.

Our vision is to create awareness and to help find innovative ways to connect our planet in a positive eco-friendly manner.

In the meantime, you may connect with CloudTweaks by following and sharing our resources.

View All Articles

Sorry, comments are closed for this post.

Comic
How Secure Is Your School Campus Network?

How Secure Is Your School Campus Network?

School Networks School related networks are one of the most attacked sectors today, coming in third worldwide to healthcare and retail. Because of the ever growing threat of cybercrime, IT professionals everywhere aren’t thinking in terms of “what if our network gets attacked?” Now, they think in terms of “when will our network be attacked?”…

IBM and VMware Expand Partnership to Enable Easy Hybrid Cloud Adoption

IBM and VMware Expand Partnership to Enable Easy Hybrid Cloud Adoption

IBM and VMware Expand Partnership More than 500 new clients, including Marriott International are now running VMware software on IBM Cloud since the strategic cloud partnership was announced;Introduction of VMware Cloud Foundation on IBM Cloud helps move existing apps to the cloud within hours; More than 4,000 IBM service professionals trained to help organizations extend…

Fully Autonomous Cars: How’s It REALLY Going To Work?

Fully Autonomous Cars: How’s It REALLY Going To Work?

Pros and Cons and What the Experts Think Science fiction meets reality, and modern civilization is excitedly looking forward to the ubiquity of self-driving cars. However, an omnipresence of fully autonomous cars won’t happen as quickly as even some hopeful experts anticipate. While the autonomous car pros versus the cons race (See infographic discovered via…

The Lighter Side Of The Cloud – Bottlenecking

The Lighter Side Of The Cloud – Bottlenecking

By David Fletcher Please feel free to share our comics via social media networks such as Twitter, Facebook, LinkedIn, Instagram, Pinterest. Clear attribution (Twitter example: via @cloudtweaks) to our original comic sources is greatly appreciated.

Recent Articles - Posted by
The Age of Data: The Era of Homo Digitus

The Age of Data: The Era of Homo Digitus

The Age of Data In our digital era data deluge – soaring amounts of data, is an overriding feature. That’s why it’s fitting to focus on the concept of Homo Digitus, which I first learned about about in“The creative destruction of medicine: How the digital revolution will create better health care,” by Eric Topol, and…

Moving To The Cloud: A Smart Move Or Proceed With Caution?

Moving To The Cloud: A Smart Move Or Proceed With Caution?

Moving To The Cloud You hear it over and over again: The future of computing is in the cloud. Businesses should be moving to the cloud. If you’re not in the cloud, you’re behind the times. But trusting your essential data to a cloud may sound like a dubious proposition. Below are some of the…

The Cloud Is Not Enough! Why Businesses Need Hybrid Solutions

The Cloud Is Not Enough! Why Businesses Need Hybrid Solutions

Why Businesses Need Hybrid Solutions Running a cloud server is no longer the novel trend it once was. Now, the cloud is a necessary data tier that allows employees to access vital company data and maintain productivity from anywhere in the world. But it isn’t a perfect system — security and performance issues can quickly…

Your Biggest Data Security Threat Could Be….

Your Biggest Data Security Threat Could Be….

Paying Attention To Data Security Your biggest data security threat could be sitting next to you… Data security is a big concern for businesses. The repercussions of a data security breach ranges from embarrassment, to costly lawsuits and clean-up jobs – particularly when confidential client information is involved. But although more and more businesses are…

How To Humanize Your Data (And Why You Need To)

How To Humanize Your Data (And Why You Need To)

How To Humanize Your Data The modern enterprise is digital. It relies on accurate and timely data to support the information and process needs of its workforce and its customers. However, data suffers from a likability crisis. It’s as essential to us as oxygen, but because we don’t see it, we take it for granted.…

6 Tech Predictions To Have A Major Impact In 2016

6 Tech Predictions To Have A Major Impact In 2016

6 Tech Predictions To Have A Major Impact The technology industry moves at a relentless pace, making it both exhilarating and unforgiving. For those at the forefront of innovation it is an incredibly exciting place to be, but what trends are we likely to see coming to the fore in 2016? Below are six predictions…

Cloud Infographic – Big Data Analytics Trends

Cloud Infographic – Big Data Analytics Trends

Big Data Analytics Trends As data information and cloud computing continues to work together, the need for data analytics continues to grow. Many tech firms predict that big data volume will grow steadily 40% per year and in 2020, will grow up to 50 times that. This growth will also bring a number of cost…

Containerization: The Bold Face Of The Cloud In 2016

Containerization: The Bold Face Of The Cloud In 2016

Containerization And The Cloud “Right now, the biggest technology shift in the cloud is a rapid evolution from simple virtual machine (VM) hosting toward containerization’’ says the CTO of Microsoft Azure, Mark Russinovitch, a man who deals with the evolving cloud infrastructure every day. In his words, containerization is “an incredibly efficient, portable, and lightweight…

Cloud Infographic – Cloud Public, Private & Hybrid Differences

Cloud Infographic – Cloud Public, Private & Hybrid Differences

Cloud Public, Private & Hybrid Differences Many people have heard of cloud computing. There is however a tremendous number of people who still cannot differentiate between Public, Private & Hybrid cloud offerings.  Here is an excellent infographic provided by the group at iWeb which goes into greater detail on this subject. Infographic source: iWeb

Cloud Computing Checklist For Startups

Cloud Computing Checklist For Startups

Checklist For Startups  There are many people who aspire to do great things in this world and see new technologies such as Cloud computing and Internet of Things as a tremendous offering to help bridge and showcase their ideas. The Time Is Now This is a perfect time for highly ambitious startups to make some…

Three Factors for Choosing Your Long-term Cloud Strategy

Three Factors for Choosing Your Long-term Cloud Strategy

Choosing Your Long-term Cloud Strategy A few weeks ago I visited the global headquarters of a large multi-national company to discuss cloud strategy with the CIO. I arrived 30 minutes early and took a tour of the area where the marketing team showcased their award winning brands. I was impressed by the digital marketing strategy…