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Spoiltchild Design

Saas - Software as a Service conference.

I attended the SaaS Software as a Service conference yesterday in the Digital exchange in Dublin. Fair play to Enterprise Ireland for running this. They definitely seem to have their finger on the pulse and did a great job in organising.
SaaS is a term I had not heard before but from the documentation it seemed to apply to our new products Weddings By Adam and Toddle in that they have relatively low recurring on going costs and are supported centrally as an ongoing service. Turns out that is exactly what it was about.

This was one of the best conferences I have attended. Mostly because I came away with three key valuable bits of information. A new market for one of our products, great marketing tips for both customers and justifying the business model in the business plan and also a possible way to finance the start up of the business. Not bad for a days work.

First up was Jeff Kaplan, Managing Director of THINK Strategies.
After getting by the similarity in appearance to Borat (Sorry its the tash) Jeff gave a great opening talk with an overview of just what SaaS is all about and what it means to the market. He touched on the topics of all the other speaks in the day which gave a great connectivity and relevance to the day. Jeff would be one of the leading consultants on SaaS to the enterprise sector and runs the resource http://www.saas-showcase.com.

A few details from Jeff:
SaaS accounts for 50% of software sales online(source Gartner).
It is essentially Pay-as-you-go software.
90% of (enterprise) users of SaaS were satisfied.
92% of (enterprise) users of SaaS recommend it to others.
For an SaaS company the business model enables better use of funds and be more focused on improving the product and customer service.

Next up and best for me was Bobby Napiltonia, SVP worldwide channels and alliances, SalesForce.com
This guys is a great speaker and had everyone in the audience eating out of his hands. He spoke on SaaS from the SalesForce point of view. SaleForce being arguably one of the leaders in the area with a market in 55 countries and half a million customers.
Not just did he speak on the SalesForce experience in the market and their strategy for success but also how they in turn are opening up new channels in the market for other companies with their appexchange programme. Essentially a 3rd party plug-in market for SalesForce. They also offer incubation space specifically to support companies launching into this programme.

A thrill for me was seeing the logo and interface I tweaked with Walter in the SalesForce presentation along such names as Writely, Google and Zoho Office. That was cool. Thanks Walter :)

A few details from Bobby:
SaaS can be low cost enough to enable self service for those without an IT budget. Because a monthly payment for software can be so low it can enable companies to go ahead and order without having to get budget approval.
$115m was made by just 11 of the top appexchange companies last year.

Nick Blozan of Opsource and chairman of the SIIA SaaS executive council (workgroup) gave a few more details on the market. Nick would be one of the people that an enterprise would go to about convirting an existing software product and business over to the SaaS business model.

A few details from Nick:
Market drivers of Software as a Service are:
Lower cash outlay
Increased time to value
Reduced technology risk and increased ROI
Easier to track ROI
Iterative improvements and increased performance
Reduced burden on internal IT staff

The benefits for the ISV/software company:
Intense competition makes Saas a strategic differentiator
Financial advantage of recurring revenue streams
Strengthened relationships with customers

He also highlighted how a good SLA is even more important with SaaS.
The importance of establishing a good, reliable and secure hosting partner. Was also stressed and noted how it could make the difference between a sale or no sale. Especially when valuable and sensitive data is stored.

Conor Halpin is a natural speaker and gave a good report of his experiences in trying to sell the benefits of Saas and his Dublin based startup Lecayla Technologies to enterprise companies in silicon valley entrenched in the old software model. He convinced us quick enough so I imagine he got far over there.

A few details from Conor:
On average you can expect a 20% profit on the Enterprise software model.
SaaS is up to 30%.
He also recommends Joels article on pricing your product.
I got to chat to Lecaylas chief financial officer Ian over lunch which was a great education in how Venture capital and funding works.

Speaking of finance, Justin Floyd of SmartFundit.com was up next.
They used to operate finance for the enterprise market allowing enterprises to spread the cost of large ticket software. As that market has shrunk they have diversified into the SaaS market.
Essentially factoring it offers start-up companies a way to improve financing and cash flow in the stat up stages. So if you sell a subscription contract spread over a year you can go to SmartFundit and get access to the full value of that contract straight away. Factoring has its risks but it is another option for a statup.

A few details from Justin:
25% of all software sales will be SaaS by 2007. 50% by 2011. (source Gartner).
8 out of 10 of the fastest growing technology companies are using the Saas model.(source Gartner).

The panel discussion was great at the end. Jeff controlled the floor and speakers like a professional talk show host. I got more specific business ideas for myself out of this instead of general ones to repeat here. Unfortunately I had to miss the very end of it as I was running to a meeting across town.

All in all a great day. Thank you to all involved. Some of the figures picked up worked great today in a meeting with the County Enterprise Board :) .

  1. Hey Alan,

    I’m curious about something. If I’ve got this right, Weddings by Adam is a web app with a monthly subscription, right? But wouldn’t you be better off charging a one-time fee instead? (I.e, people only get married once in 10 years ;). Who would need to keep paying a monthly fee for something they don’t use?)


    Ali    Oct 20, 11:18 PM    #
  2. Hi Ali,

    It is a monthly subscription yes. There are a couple of benefits for the user this way.

    1. It breaks down the cost to more manageable chunks. It is not long since my own wedding and there are more then enough large payments that have to be made. The goal of Weddings by Adam is to make the whole process easier.

    2. Not everyone is getting married in the same time frame. Some in 3 months, others not for 2 years. We have one couple and their wedding is 4 years away. Breaking it down to a monthly subscription means you only pay for the service for as long as you need it. No more. We dont believe in paying for something when you dont need it anymore.


    Alan    Oct 21, 12:26 PM    #
  3. Excellent overview. Cheers. Prob should have gone myself. Could you post a link to “Joels article on pricing your product” please?


    Eoghan McCabe    Oct 21, 05:02 PM    #
  4. Done. I have updated the article with this link. http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html


    Alan    Oct 21, 05:09 PM    #