Making Money with SaaS

SIIA EventHosted by Progress Software

(SaaS)Software as a Service

Building a compelling Go-to-Market Strategy

Colleen SmithManaging Director, Software as a

ServiceApril 2009

cosmith@progress.com

(SaaS)Software as a Service

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Global Presence

25 Years of Experience

Progress Software Snapshot

Progress community over $5B total annual revenue

3 Million users worldwide

2,000 Partners deliver 6,000 unique business applications in manufacturing, distribution, financial services, retail, healthcare and other markets

VAR Business 5-star rating for our partner program

Each year PSC and its Application Partners add 600,000 new users.

60% of Fortune 500 manufacturers use Progress technology

Progress serves the leaders in many markets-4 out of 5 of the world’s largest electronics-3 out of 4 of the world’s largest medical-4 out of 5 of the world’s largest beverage-2 out of 4 of world's largest food-16 out of 25 of the world’s largest auto suppliers

Over 200 SaaS Providers using PSC technologies today to deploy/manage/integrate SaaS applications

deployed in 135 countries worldwide 24 countries deploying SaaS apps

NASDAQ: PRGS Headquarters: Bedford,

MA Customer Sites: Over

110,000 Offices: 90 Worldwide Employees: 2,000+ Revenues ‘08: $504

million

28 YEARS OF EXPERIENCE CUSTOMER and PARTNER BASE

GLOBAL PRESENCE

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2008 2009 2010 2011 2012

WW Spend On Software as a Service2008-2012

SaaS Opportunity growing to

$17B by 2012

Source: IDC SaaS Forecast July, 2008

($B)

“A healthy channel will be critical to

the successful long-term growth of SaaS and cloud

computing providers.”

Saugatuck Technology, October 2008

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Why the need for Channels and Ecosystems?

• The most aggressive adopters of SaaS tend to be low-to-midsized businesses. This segment has long been the sweet spot for channel partners.

• Channel partners already have strong relationships with business decision-makers, but the dialogue is changing.

• Many smaller businesses will value service providers who can combine best-of-breed SaaS solutions together into de facto suites and create customer-specific extensions to meet the specific requirements of their business.

• Executives still may look first to their trusted service providers, with whom they have developed relationships.

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• R&D focus on service delivery methodologies rather than product features.

• Marketing focus on packaging and pricing services/solutions, not technology/products.

• Sales focus on selling economic business value not product features.

• Customer support focus on provisioning, billing and automated, remote management.

Changes to your Business

Requires rethinking your business model – but also requires looking at new “go to market” strategies

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Addressing Key Questions…to be successful

• What is my go to market strategy and value proposition?

• Who are the best providers to partner with, not only in terms of solution and technology, but also in terms of partner-friendly policies such as SLAs and channel conflict avoidance?

• What is the best way to compete against new, non-traditional channel partner entrants?

• In what way can I participate in a SaaS ecosystem?

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So what does that mean for YOU?

Think about other ways to bring your service offerings to market….

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Assess new and existing

relationships

Reaching new

Buyers and

Influencers

New Geographi

es

Key Considerations:Key Considerations: Key Considerations:

>Do you belong to an ecosystem?

>How can you exploit that relationship?

>Are there other ecosystems that you can participate within?

>Who are the major players in your market?

>Can you extend your business to new geography?

>Are your current markets bound by geography?

>Who are the players in that new geography and how could you best work with them?

> Is there already an established organization that complements your offering?

> Look at alternative channel options…customers, service providers, BPOs, telco’s, etc.

> Look at those who can add value to your service or those that you can add value to their service

> “White Label” opportunities may exist….

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New Business Partner Opportunities

• Deep knowledge in functional software area and/or industry

• Focus on business process optimization

• Strong potential for micro-vertical application development (janitorial services, poultry farming, insurance claims, etc.)

• Non-IT companies with established practice area such as banks, law firms, marketing/travel agencies…

• SaaS providers look to this type of "alternative" channel where "customer-turns-partner“

• Main value add is access to customers and domain-specific knowledge

Business Domain Specialist Business Service Providers

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Summary & Conclusions

• Go-to-market planning is critical to your success

• New channel/partner strategies essential

• Opportunity to redefine and expand product portfolio and business value – aggregating benchmark data, new offerings, etc…