Mais conteúdo relacionado Semelhante a How to Optimize Your SaaS Revenue Streams - Rackspace SaaS & Cloud 2010 (20) Mais de Lincoln Murphy (6) How to Optimize Your SaaS Revenue Streams - Rackspace SaaS & Cloud 20101. How to Optimise Your SaaS Revenue Streams
Presented at Rackspace
SaaS and the Cloud 2010
London, 12th February, 2010
Copyright© 2010 Sixteen Ventures. All rights reserved.
2. Aim of Today
• To help you make better revenue decisions
• How did we get here from legacy?
• What are the key differences in SaaS?
• Revenue Streams available in SaaS
• Better Revenue = More Profit
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4. Who am I?
• Justin Pirie
1.Blogger- This Week in SaaS
2.Community- Run the biggest in SaaS
3.Social Media- #3 in SaaS influence
4.Consultant- Specialise in SaaS product and
market strategy
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6. Why SaaS?
• Richer user experience
• Rapid implementation
• Frequent cycles of innovation
• Minimal upgrade hassles
• Always on deployment
• Subscription pricing
• Scalability
Ray “R” Wang
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8. But there’s a catch
• Beware of the Recurring Revenue Mirage
• It’s easy when you’ve had $120m in funding...
• It’s a lot harder to acquire customers that people
often think
• It becomes the classic- market risk as opposed to
technical risk
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10. Making money in Legacy
• It was easy:
1. Hire Programmers
2. Price it
3. Market it
4. Sell it
5. Receive large payments from customers
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12. Legacy Software Business Architecture
Intellectual
Marketing
Property
Revenue
Technology
Model
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13. Legacy Software Business Architecture
• Is Disconnected
• Everything Siloed creating Value Separately
• Little or no outward facing technology
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14. Legacy Software Customer Ecosystem
Customers Developers
Channels
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15. Legacy Software Customer Ecosystem
• Companies sold software primarily through
traditional channels like Value Added Resellers
(VAR’s)
• VAR’s sold, installed and maintained the software
for the end customer
• Customers were disconnected from the
Software Vendor
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17. SaaS Customer Ecosystem
Customers Developers
Channels?
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18. SaaS Customer Ecosystem
• The biggest change is that the web has become
the de-facto delivery method for software
• Channels haven’t gone- they’re just different
• Key difference in SaaS is that Customers now
produce data as well as consume it and
developers produce software as well as consume
customer data
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21. SaaS Customer Ecosystem
Customers, Developers,
Channels,
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22. SaaS Customer Ecosystem
Customers, Developers,
Network
Effect
Channels,
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23. Network Effect
• Is the KEY DIFFERENTIATOR for SaaS
• Not just the “obvious benefits” listed before by
Ray Wang- they can’t overcome satisfactorily the
security, reliability, compliance, ROI arguments
• Network Effects drive the true ROI of SaaS
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24. Channels
• Haven’t gone away completely- just are different
• Value provided by traditional VAR’s is eroding
• New type of Channel partner emerging who
builds on the ecosystem, creating apps and
widgets on your platform- Ecosystem
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26. Legacy Software Business Architecture
Intellectual
Marketing
Property
Revenue
Technology
Model
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27. Legacy
• Disconnected Business Architecture
• Think Dilbert in Cubicles...
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28. SaaS Business Architecture
Intellectual
Marketing
Property
Network
Centricity
Revenue
Technology
Model
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29. SaaS Business Architecture
• Is Connected
• If it’s disconnected, it fails.
• Marketing has to talk to Sales who has to talk to
Engineering who has to talk to IT.
• Failure to connect leads to very public issues
• Customer Acquisition Cost is the key indicator
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31. SaaS Revenue Model
Intellectual Products
Marketing Property
Subscriptions Ecosystem
Network Network
Centricity Effect
Services Advertising
Revenue
Technology
Model Ancillary
Revenue Model made up of Revenue Streams
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32. 7 SaaS Revenue Streams
Products
Subscriptions Ecosystem
Network
Effect
Services Advertising
Ancillary
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33. Scalable Revenue
Streams
Products
Subscriptions Ecosystem
Network
Effect
Services Advertising
Ancillary
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34. Less Scalable Revenue
Streams
Products
Subscriptions Ecosystem
Network
Effect
Services Advertising
Ancillary
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35. Products
• Making Physical goods is hard...
• You have to get every part of the process right!
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45. Services
• E.g. Consulting, Professional Services
• Easy to do in small numbers
• Hard to Scale
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49. At Scale
• Everybody hates you (like SAP)
• You become expensive (at least 3x cost of each
person)
• Questionable value if you’re delivering repeatable
work that could be automated
• Doesn’t sit well with the SaaS proposition
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50. Advertising
• Have you ever seen a beautiful SaaS app with
great UX with Adwords?
• Yes, Google Apps is cool
• But Google has $25bn of revenue and $4bn of
free cash flow a year, and they’re in the
Advertising business- KEY DIFFERENCE
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52. The idea that software on
the Web is going to be
largely funded by
advertising is just so
wrong-headed, I hardly
know where to start.
Phil Waineright
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54. Spiceworks
• Is a great example of an Ad funded software
company
• They recognise what business they are in-
Advertising
• They have their own ad team and sell to their
125 customers- no adwords!
• They have 850,000 users and have had $25m in
Venture funding over last 5 years
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56. Scalable Revenue
Streams
Products
Subscriptions Ecosystem
Network
Effect
Services Advertising
Ancillary
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57. Subscriptions
• What can I say? The fundamental basis of SaaS
• Truly Scalable Profitability
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61. But Also Different
• Recognise that there are also different types of
subscription revenue:
1.Pay per use
2.Percentage
• And others... The key is customers now transact
through you- giving you opportunities to align
payment and value
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64. Ecosystem
• Ecosystem creates lock in for your brand
1.Apps for the Apple iPhone- most successful
consumer ecosystem to date
2.AppExchange for Salesforce- pre built
integrations making it the de-facto CRM
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67. Network Effect
• The Key Differentiator between SaaS and legacy
Software
@ray - the aggregated data aspect is often
underplayed.To me there is the potential for that to
have more value than the application itself.
Dennis Howlett
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73. Ancillary
• Don’t ignore other revenue opportunities
1.Setup Fees
2.Partnership Fees
3.Arbitrage opportunities
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78. 7 SaaS Revenue Streams
Products
Subscriptions Ecosystem
Network
Effect
Services Advertising
Ancillary
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79. SaaS Business Architecture
Intellectual
Marketing
Property
Network
Centricity
Revenue
Technology
Model
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82. Multitenancy
• A quick few thoughts
• It’s not a technical argument
• It’s a business architecture issue
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83. Multi-Tenancy in SaaS - Single Instance for all
Customers
Customer Customer Customer
Customer Customer Customer
Customer Customer Customer
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84. Multi-Tenancy in SaaS - Its not just Customers!
Customer Partner Developer
Industry Customer Partner
Customer Developer Customer
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88. SaaS Revenue Modeling &
Business Architecture
Lincoln Murphy, Managing Director Justin Pirie
+1 (972) 200-9317 +44 (0)7799 625 787
lincoln@sixteenventures.com jp@justinpirie.com
http://sixteenventures.com http://justinpirie.com
@lincolnmurphy @justinpirie
Notas do Editor This is what he
sold our customers Why are we here? So
why does making money out of a SaaS business feel like an uphill climb with no end in sight? IP- Secret Sauce-
most of time and value in here
Technology- infrastructure- small- internal focused
Revenue model is completely disconnected from everything else- sell it however you want
As is marketing Loosely-coupled, at best Loosely-coupled, at best Loosely-coupled, at best Loosely-coupled, at best IP- Secret Sauce-
most of time and value in here
Technology- infrastructure- small- internal focused
Revenue model is completely disconnected from everything else- sell it however you want
As is marketing Can’t have silos
Technology is more
important- infrastructure, security, governance, compliance taken over for customers
Marketing needs to be tied into the technology- self service, nurturing
Revenue model needs to be built into the app. Must be aware of this early on. Support the right metrics and segmentation Things that make up the revenue
model of SaaS Subscriptions = £- this can be per use
or
per month- aligned with your market
Ecosystem- Channel sales,
affiliate, API monetisation, Apps. Everything Leveraged
Network Effect- Monetising the data through use. Anonymous, Benchmark
Ancillary- anything else! Float/discounts/affiliate sales/ setup fees. Get paid before paying etc. Products-
computers, appliances, anything physical
Services- difficult to scale profitably. Onboarding- 80 / 20 rule- roll the 80% repeatable stuff into the app. Only deliver the 20% that is actually custom. Increased value and you can increase price, increase margin. Advertising- Unless you’re in the advertising business- it’s hard. Inventory is finite and hard to execute well. Spiceworks have 125 customers which are advertisers and 800,000 users. Done properly advertising doesn’t belong in this bubble. Subscriptions = £- this can be per use
or
per month- aligned with your market
Ecosystem- Channel sales,
affiliate, API monetisation, Apps. Everything Leveraged
Network Effect- Monetising the data through use. Anonymous, Benchmark
Ancillary- anything else! Float/discounts/affiliate sales/ setup fees. Get paid before paying etc. Things that make up the revenue
model of SaaS Can’t have silos
Technology is more
important- infrastructure, security, governance, compliance taken over for customers
Marketing needs to be tied into the technology- self service, nurturing
Revenue model needs to be built into the app. Must be aware of this early on. Support the right metrics and segmentation Every business is different- I don’t know
the governance and compliance issues at play in your business Network Effect! Ecosystem! Did we reach the goal? Hi-
My Name’s Justin Pirie
Alternative Photo:
http://www.flickr.com/photos/piero/2204978222/