Building a Scalable and Profitable SaaS Business Model

13-Nov-2013

Building a Scalable and Profitable

SaaS Business Model

www.techcello.com

Housekeeping Instructions

Cloud Ready Development Framework For SaaS and Enterprise Software

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answered by the speakers during the Q & A session.

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Thanks for your participation and enjoy the session!

Summary


Agenda SaaS Business Model

Blind spots in SaaS

SaaS Life Cycle

Business Management Challenges

Solutions

Customer Service Challenges

Solutions

Product Engineering Challenges

Solutions

About Cello

Benefits

Questions

Speaker Profiles


14+ years of experience in architecting cloud and SaaS

solutions for both ISVs and Enterprises

Chief architect in designing and constructing CelloSaaS

framework

Plays consultative role with customers in implementing

SaaS solutions

Jothi Rengarajan

Chief Technical Architect

An ardent cloud enthusiast and a prolific speaker at

NASSCOM & Cloud Connect Events

15+ years of software development experience, he is

instrumental in defining CelloSaaS framework

Enables Enterprises and ISVs to define their cloud

strategyJanaki Jayachandran

Director of Technology

SaaS Business Model


• Expect more customers• Retaining customers is

more important than getting new customers

• Expect churn, as customers can now easily switch vendors

Scale

• Trickling revenues over a period of time

• Attractive and flexible pricing model to meet SMB budget

• Keep enriching features to increase upsell

Revenue

• Responsible for both Hardware and Software

• Security and Availability is key

• Should scale to meet increasing customer base

Infrastructure

• Responsible to meet the SLAs

• Should expect more tickets as customer base grows

• Recurring payment collection

Operations

Your SaaS

Solution

How “Complete” is Your SaaS Solution?

Selling

Blind Spots in SaaS


Idea (or) Existing Product

Technical Feasibility/PoC Architecture Develop/Migrate Testing Deployment

Solution

Servicing

ISVs typically overlook two other important areasBlind Spot Blind Spot

Hurray!!! I am on SaaS now!!!

Can you be profitable?

SaaS – Number Game


Sales & Marketing30%

Customer Service30%

R&D15%

Administra-tion15%

Profit10%

Budget Split-up MonthlyAvg. Revenue per Customer

Number of

Customers* Total Revenue

Cost of Delivery (CoD)

(30%)

1 $ 2,000 10 $ 20,000 $ 6,000

2 $ 2,000 11 $ 22,000 $ 6,600

3 $ 2,000 12.1 $ 24,200 $ 7,260

4 $ 2,000 13.3 $ 26,600 $ 7,980

5 $ 2,000 14.6 $ 29,200 $ 8,760

6 $ 2,000 16.1 $ 32,200 $ 9,660

7 $ 2,000 17.7 $ 35,400 $ 10,620

8 $ 2,000 19.5 $ 39,000 $ 11,700

9 $ 2,000 21.5 $ 43,000 $ 12,900

10 $ 2,000 23.7 $ 47,400 $ 14,220

11 $ 2,000 26.1 $ 52,200 $ 15,660

12 $ 2,000 28.7 $ 57,400 $ 17,220 *10% Month on Month Growth

Customer Service (A) Cost of Delivery includes Hardware cost, License cost, Tech Support and Account

Management

SaaS Life Cycle


SaaS Life Cycle Management Solution - Needs


Management TeamCustomer

Service TeamProduct Engineering

Team

Needs error free , efficient and innovative

mechanism to strategize, manage and monetize

subscriptions.

Needs a quick and cost effective way to roll-out customers and process their requests. Monitor

the product performance and take proactive measures.

Build high speed, scalable and secure

system.

Cello – One Stop Solution


Cello has packaged these common requirements as a suite of services, which can be easily integrated to your product.

Cello – Solution Areas


Business Management - Challenges


How can I shorten my sales cycle?

Can I provide a customer friendly subscription model?

How can I increase my trial conversion rate?

How can I increase my upsell?

How can I reduce my churn?

How can I cost effectively manage and monetize subscriptions?

How do I manage my Reseller?

Business Management - Solutions


Offer Self Subscriptions and Trials

Module wise access

Innovative pay by use model

Innovative pricing model

Analyze and act on hot/cold trials

Live Revenue Tracking

Track Customer Behavior and Usage

Real-time tracking of “pay as you go” usage

Automated Invoice Generation

Automate Payment Collection

Self Service Portal

Reseller Portal



SaaS Solution

Module:XYZ

Module:ABX

Module:C

(usage restriction)

Flat Cost: $100 Flat Cost: $125

Trial for 30 Days

Flat Cost: $125

Module:XYZ

Flat Cost: $25

Usage Cost:$1 per

transaction

Module:ABCXYZ

Commission:20%

Tenant A Tenant C Tenant DTenant B Reseller A

Payment:Pre paid

Payment:Post paid

http://www.google.co.in/url?sa=i&source=images&cd=&cad=rja&docid=7Y2YO3fCr6Gs1M&tbnid=-FUx6xjccq-izM:&ved=0CAgQjRwwAA&url=http://fairhousingoc.org/landlord.html&ei=vqaAUrjiOIaFrAffroD4Bw&psig=AFQjCNFlcz-Rpc-Cu1IezuKxX5d5H6Yayw&ust=1384249407019582


http://www.google.co.in/url?sa=i&source=images&cd=&cad=rja&docid=e3UNTb1ZIX_rHM&tbnid=p6ZAOC4esdF5UM:&ved=0CAgQjRwwADg0&url=http://www.canstockphoto.com/authorized-reseller-seal-stam-14698167.html&ei=KaeAUuWXGIT-rAfE2oHQCw&psig=AFQjCNF549J4z8QbyOKK7MnF212ZDo4hXw&ust=1384249513480016





SaaS Product Pricing Model

Trading System Number of traders in the system.

Supply Chain Management

x% of the total value of transactions.

Workforce Management System

Number of workers managed in the system.

DMS Total volume of documents maintained.

Recruitment System Number of candidates hired through the system

Health Care System Number of patients managed through the system

CMS Number of content shared with other users

Examples of Value Pricing Models

Business Management – Cello Features


•Product Editions•Multiple Price Plans•Fixed/Usage Cost•Trial and Evaluations•Upgrade/Downgrade•Activation/Deactivation

Subscription

•Tenant Provisioning•Self Registration•Customer Analytics•Customer portal•Role based access control•Support for Reseller Model

Customer Management

•Metering Usage•Invoice Generation•Proration•Applying Tax/Discount rates•Generic Adjustments•Invoice Dashboard

Invoice

•Credit card Support•Pay Pal Support•Payment Automation•Retry Policy•Revenue Tracking

Payments

Business Management – Cello Screen Shots


Customer Analytics

Filter on various usage attributes



Billing Dashboard



Customer Portal

Transparent Billing Details Payment History



Auto Generated Invoice

Customer Service - Challenges


According to a study by the Rockefeller Foundation,

According to Forum Corporation Research,

“Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. The prevailing reason for switching was poor quality

of service.”

http://www.rockefellerfoundation.org/

http://www.rockefellerfoundation.org/

http://bit.ly/f5L3Ls

Customer Service - Challenges


How quickly can I finish customer implementation?

How can I eliminate “shelfware”?

How can I provide my customer the ability to self service their needs?

How can I proactively support my customers better and increase customer satisfaction?

How can I proactively communicate with my customer at different stages?

How can I reduce the involvement of engineering team to service customer request?

How can I service more customers with less support bandwidth?

Customer Service - Solutions


Automate customer implementation and enable self service

Aim for sign-in and immediate use of the system

Adopt configuration vs. customization. Embed configurability in the respective areas within the product

Automate customer communication process

Track customer behavior

Track customer experience with the system

Track product performance



Provision Tenant Set up Data Isolation

Setup Users Set Up ACL

Set up Look and Feel

Set up Business Process Screens

Set up Business Process Workflows

Set up Recurring Reports

Import Tenant Data Set up Integration

Typical Implementation Flow



Typical Task List Of Customer Service Team

Send XYZ Report To Customer A

Send XML Data Export to Customer B

Take Data Backup of Customer C

Send Security Audit Information for Customer C

Send Subscription Reminder Email to the customers

Get the report of Customers who are not actively using the system and talk to them

Check the current performance health of the system

Customer Service – Cello Features


•Auto Tenant Provisioning•Tenant Settings Management•White Labeling•Single Sign On

Implementation

•Business process Workflow customization•Business Event Audit Streams•Event Driven Integration

Configuration

•Product Analytics•Customer Analytics•Query Builder•Chart Builder•Report Builder

Report

•Data Partition Management•Data back-up

Data Management

Customer Service – Cello Screen Shots


Business Process Workflow

Drag & Drop Interface



Configurable Notifications

Dynamic Content



Product Analytics

Exceptions in Product



Product Analytics

Performance Counters



Tenant Management Dashboard

Live Tenant Stats

Subscription Details

Product Engineering - Concerns


My Sales is doing great – oops! my product is not scaling

Machine cost is continuously going high

Hackers - why cant they leave me alone?

Two customers data in the same box!!!

God! One more system to integrate?

Are they kidding? They need 4 more fields and new workflow???

My product road map is always blocked!

Hmm.. Customer insists on on-premise deployment!

Product Engineering - Solutions


Scale-out at all layers

Adopt Data-Shards

Adopt Multi tenancy

Adopt OWASP

Automate ACL and Data Isolation checks

Adopt SOA

Adopt web hooks

Build configurable data views

Build Configurable Workflows

Build Configurable Reports

Have a proper error logging mechanism

Build your product modular

Product Engineering – Scalable Solution


Load Balanced App Servers

Multi-Tenant Database

User Load

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http://www.google.co.in/url?sa=i&source=images&cd=&cad=rja&docid=97vBMY37pfkfiM&tbnid=EMM1XGNnQMMHOM:&ved=0CAgQjRwwADgO&url=http://www.iconshock.com/icons/vista/computer_gadgets/server-icon.html&ei=t6KBUrzGMYaRrAfewYGwDA&psig=AFQjCNHw5uhZfW9pSLwB2sxFQbtIxRDHfw&ust=1384313911899654



http://www.google.co.in/url?sa=i&source=images&cd=&cad=rja&docid=YqZod3pYV2Im6M&tbnid=nnHfXulDAtqrtM:&ved=0CAgQjRwwADgU&url=http://www.cornerstonetelephone.com/enterprise&ei=bKWBUpyzFsSGrgeds4DYDQ&psig=AFQjCNHunpr2veSi-EVrOpHsRaPoSU3bAw&ust=1384314604450151




Multi-Tenant Database Dedicated DB

User Load


http://www.google.co.in/url?sa=i&source=images&cd=&cad=rja&docid=9YbFyC5mYNF_-M&tbnid=pkuEGyb0E8YWYM:&ved=0CAgQjRwwADhf&url=http://www.123rf.com/photo_13903900_database-and-computer-data-security-concept-metal-hard-disk-icon-covered-by-protection-shield-isolat.html&ei=s6GBUsCJNYeErQft8YDQAw&psig=AFQjCNF8XWdnHQCsPLN6qol5nzWhSJmthg&ust=1384313651950044







Tenant 1 to x


Tenant x+1 to y Tenant y+1 to z Dedicated DB

User Load

Tenant 1 to x Tenant x+1 to y Tenant y+1 to z Dedicated DB

Module B

Module A

















Product Engineering – Cello Features


User Management

Role/Privilege Mgmt. Single Sign-on Dynamic Data

Scope AuditingSecurityModules

Business Rules Workflow Dynamic

Forms

Enterprise Engines

Events Notification Templates

Integration Modules

Query Chart Reports

Ad-hoc BuildersCode

TemplatesMaster Data

Mgmt.Forms

Generation

Productivity Utilities

Application Multi-Tenancy & Tenant Data Isolation

Custom Fields Custom LoV Settings Template

Themes & Logo

Pre & Post Processors

ConfigurabilityModules

Your SaaS solution

Engineering Stack

Engineering Stack

Product Engineering – Cello Screen Shots


Granular Level of Access Control

Action based privileges



Data Partition Management

Multiple Physical Servers

Multiple Partitions

New Servers Can be Added



Events and Web Hooks

Multiple Events Can be Registered

Integration with external systems

About Cello – Plug & Play Integration


Cello Benefits


SaaS Solution

Scalable and Profitable SaaS Business

SaaS Life Cycle Management Solution

Cello - Awards & Accolades


2012

Summary


SaaS – Critical to get more customers

Do not ignore “Selling” and “Servicing” related needs

Monetization tools required for more “selling”

Customer Service capabilities for efficient operations

Product engineering features for a scalable and secure product

SaaS Life Cycle Management Solution – way to go

Contact Us


Web : http://www.techcello.com

General Enquiry : [email protected]

Support Enquiry : [email protected]

Sales Queries: [email protected]

http://www.techcello.com/

mailto:[email protected]



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Building a Scalable and Profitable SaaS Business Model

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