The document discusses the organizational changes required for a company to transition from an on-premise software model to a Software as a Service (SaaS) model. It notes that every part of the organization will be affected, including engineering, quality assurance, operations, customer support, sales, marketing, finance, professional services, and legal. Key changes include shorter release cycles, a focus on uptime and scalability, subscription-based billing, and an emphasis on customer success. Resistance to change is identified as one of the "quiet killers" of a successful transition to SaaS. Vision, leadership, and buy-in across departments is emphasized as important for a successful paradigm shift to a service model.

1. On Dinosaurs and Men
Dani Shomron
April 2011

2. Transition to SaaS –
Revolution, not Evolution

3. The SaaS Organization
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Not another delivery mechanism
• Paradigm shift
• Selling a Service not a Product
• Will affect every silo in the organization
• Introduce new functions and entities

4. Engineering
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Modify (rewrite?) architecture
• Simpler development – single platform
• Support „service readiness‟
• Support scalability & high availability
• Release cycles reduced to weeks
• Adopt agile S/W development (e.g. SCRUM)
• Engineers interact more closely with end-users

5. Quality Assurance
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Shorter release cycles
• Support single platform (multiple browsers)
• New testing disciplines:
 Performance
 Scalability
 Security
• Test interaction between H/W & S/W

6. Operations
R&D Quality Ops Support Sales Marketing Finance PS Legal
• New group with responsibility for „keeping the lights on‟. 24X7
• Build, manage, monitor, respond.
• Improve uptime, performance ,scalability
• DBAs, System & Network, App Engineers
• Work with R&D, QA, Sales, Support, PS
• The hub of the offering, process oriented

7. Customer Support
R&D Quality Ops Support Sales Marketing Finance PS Legal
• User experience, customer sat and success are paramount
support has important role, higher skills, higher pay
• All IT communications at your doorsteps
• 24X7 Customer service mode
• Knowledge upgraded from installation / maintenance to
app/domain knowledge
• Develop problem resolution skills

8. Sales
R&D Quality Ops Support Sales Marketing Finance PS Legal
• A whole new ball game:
 From Elephant hunting to cyber sales
 From selling a product to selling a service
 From perpetual to subscription
 From hunters to farmers
 Compensation up-front to spread over a year or more
 Sales cycles shorten dramatically
• Partners, channels, resellers, SaaS aggregators play an
important role for maximum exposure

9. Marketing
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Marketing and Sales become tightly coupled with a ‘Sales 2.0’
approach
• More dependence on automation and lead generation tools
• Guerilla Marketing thru web analysis tools, email campaigns,
newsletters, resource center, social networks
• Free trials and Freemiums
• Less control over what information is available to potential
customers
• Consider building an open community around users and
developers.

10. Finance
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Change in Revenue stream and revenue recognition
• Financial systems capturing and forecasting deferred
revenue will be needed.
• Capturing and forecasting Financial systems for
deferred revenue
• Billing is more complex: metering, collections, service
level compensation and renewals
• New systems will need to integrate with the existing
financial systems.

11. Professional Services
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Switch from installation/upgrades to app know-how
and business process
• Configuration, integration, reports.
• Most of the work will be done remotely - traveling time
and costs will be reduced
• Education services will drop part of the curriculum
pertaining to installation and maintenance

12. Legal
R&D Quality Ops Support Sales Marketing Finance PS Legal
• Service contracts - not software contracts.
• New entities: SLAs, renewals and add-on services
• Contracts with service providers –hosting, ISPs , etc.
Compliance
Compliance
• How would selling a service differ from selling a product?
• Do you need to be compliant to all the requirements that your
customers are?
• Would you need a SAS 70, HIPPA, PCI certification?
• Would your hosting provider need one?
All of these are still unclear in this emerging market.

13. Top 5 “quiet killers” of Saaccess
The more successful the ISV, the more entrenched in
the old paradigm (SAP) - Old Habits are hard to break:
1. Switch from product to service.
2. Shift of focus to operations and customer service.
3. Change pace of dev and delivery.
4. Push back - Internal resistance to change: R&D, QA, Services,
Sales. (MMS)
5. Fear of cannibalization of existing sales

14. The Secret Sauce
Vision & Leadership
• Paradigm shift – need C&V level commitment
• Pay attention to customers‟ needs
• Ensure a buy-in at all levels – make it a
company goal - get Sales involved early

15. Path to Success
• Offer a sub-system as a POC
• Acquire SaaS company with complimentary
product.
• Hybrid stage. Insist on phasing out.
• If possible – spin out company
• Integrate existing solutions. Many cloud
solutions available
• Get help. Work with Partner not Vendor

16. The real reason why Dinosaurs became extinct
(Gary Larson)
• Q&A