Date post: | 06-Aug-2015 |
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Small Business & Entrepreneurship |
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Tech Startup DayThe Cloud Challenge
Eugenia ForcatPartner Business Evangelist DX@eugeniaforcat
Cloud-Oriented-Partners Outperform Their Peers
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The Marshmallo
w Test
Stanford 1970, Walter Mischel
Repeated around the world
Studies on Delayed Gratification with children (4-6 yrs)
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The Deal: 1 Marshmallow
now Or 2 if you wait
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The Deal: 1 Marshmallow
now Or 2 if you wait
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The Deal: 1 Marshmallow
now Or 2 if you wait
2/3 of kids ate the Marshmallow
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The Follow-up: ~18 years later Children who
waited had better life outcomes
SAT Scores, Education, BMI
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So what does this mean for
IT solution providers?
Selling softwareTwo approaches.
Software as a Product (SaaP)On-premises software
Software as a Service (SaaS) Cloud software
• Customer engagement
Pricing and revenue
Customer segmentsSaaP business model.
Medium to large enterprisesWant a powerful offering for large projectsWilling to pay a substantial amount for the product
Customer segmentsSaaS business model.
Medium to large enterprisesWant a powerful offering for large projectsWilling to pay a substantial amount for the product
Small and medium
businesses
Simple and easy-to-use
Small to medium
Moderate
• Customer engagement• Pricing model
Pricing and revenue
Subscription Such as per user per
month or per device per year.
Might allow advance payment, such as first year up front.
Per Unit Such as per
transaction, per gigabyte of storage, per connection, etc.
Free Provide free service
to one set of users, then charge another set of users, e.g., advertisers.
SaaS pricingThree approaches.
• Customer engagement• Pricing model• Build and Track Revenue
Pricing and revenue
Revenue streamsSaaP business model.
License feesCustomization servicesTraining
Revenue streamsSaaS business model.
License feesCustomization servicesTraining
Subscriptions
A simple app doesn’t need much training
Limited with a multi-tenant
service
Comparing SaaP and SaaS revenuesAn illustrative example.
Time
Money
SaaP (On-Premises) ApplicationSaaS Application
Takes longer to break even
Potential for more long-term revenue
(and profit)
Slower but smoother revenue growth
Larger initial investment
Sales processComparing SaaP and SaaS sales.
Buying decision made for an on-premises application
Buying decision made for a SaaS application
Customer is introduced to the
product
Customer has an initial perception of the product’s value
Customer has hands-on experience with the
product
Customer understands the
product’s real value
The Sales process
•Compensating the sales force• Commission plan• Seasonality
•Working with partners• Less incentives for partners
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Focus on the future revenue streams that
you can build Don’t focus on the marshmallow in front
of you
And may you build a WEALTH of
Marshmallows
Thank You…