Business Case for entering SaaS

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Business Case for entering SaaS

• James Murfin
• Hosting Manager

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Opportunity - Software as a Service Market
IDC predicts worldwide spending on SaaS will
reach 10.7B in 2009
Worldwide spending on SaaS increased 39 from
2003 to 2004
5 - Year 21 CAGR
Source IDC Worldwide and U.S. Software as a
Service 2005-2009 Forecast and Analysis Adoption
for the Alternative Delivery Model Continues, IDC
33120, March 2005
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Opportunity - Adoption Status
Software upgrade triggering 60 respondents to
purchase and review SaaS
79 Now purchasing and/or reviewing SaaS offering
Source IDC, Software on Demand's Impact on the
Software Industry Transformation, Extinction, or
Rebirth?, 33558, July 2005
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Begin Profiting from This Business Opportunity
Increase Customer Satisfaction
Increase ARPU
Decrease Operations Cost
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The Business Opportunity - What do Service
Providers Offer?
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The Business Opportunity
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The Business Opportunity with Hosted Messaging
and Collaboration
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The Business Opportunity Meeting Customer Needs
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Begin Profiting from This Business Opportunity
Increase Customer Satisfaction
Increase ARPU
Decrease Operations Cost
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Summary of Business Case
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Three Ways to Take Advantage of the Market

• Direct Model Service providers sell them
  directly to end customers
• Indirect Models
• Reseller Channel partners resell what direct
  provider makes available
• White Label Versions of a service is rebranded
  and sold

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Direct Model

• Advantages
• End-to-end customer ownership
• Better end-customer control
• Better ability to differentiate offers
• More agility
• Better profit margin
• Disadvantages
• Cost of sale capital expenditure
• Include the total customer experience including
  support
• Fewer sales resources
• High initial capital investment

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Indirect Model Reseller

• Advantages
• Lower cost of sale
• Minimal infrastructure investment
• Lower domain expertise requirements
• Leveraged resources from direct provider
• Flexibility to aggregate
• Disadvantages
• Dependence on the direct provider
• Profit margins shared with direct providers
• Reduced control of the customer experience

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Indirect Model White Label

• Advantages
• All reseller advantages
• Plus the ability to brand someone elses solution
  as your own
• Disadvantages
• Cannot leverage the strength of the Direct
  provider

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How Do I Get Engaged?

• As a Direct Seller
• Download Hosted Messaging and Collaboration
• Look for New Server Hosting Guidance
• www.SolutionDemo.net
• As an Indirect Reseller or White Label
• Cobweb
• Siemens Solution 1
• Netstore

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Additional Hosted Services SMBs are Likely to
Consider Within Next 12 Months

• Voice over IP and Hosted Customer Relationship
  Management are the top areas of interest.

Likeliness to Consider Additional Hosted Services
in Next 12 Months
Percents do not add to 100 because respondent
could select more than one
Sample size 904

• Nordic Hosted Messaging and Collaboration Study,
  Edge Strategies, March 2005

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