Transition to SaaS: The Challenges and Solutions

1. Transition to SaaS: The Challenges and Solutions Panelists: DaniShomron SaaS Expert, Calia Consulting Janaki Jayachandran Head – SaaS Specialization, Aspire Systems Moderator: Kanchana Rajagopalan Marketing, Aspire Systems For Webinar Audio, Dial in: Conference Line US: 1 888 436 6494/ 1 866 581 2411 (Toll Free) UK: 08000518866/ 08081681734 (Toll Free) Audio Conference ID: 30300218 Date: Thursday, September 24th, 2009 Time: 12:00 noon ET/ 09:00 AM PT/ 05:00 PM BST/ 09:30 PM IST

2. Housekeeping Instructions • All phones are set to mute. If you have any questions, please type them in the Chat window located beside the presentation panel. • We have already received several questions from the registrants, which will be answered by the speakers during the Q & A session. • We will continue to collect more questions during the session as we receive and will try to answer them during today’s session. • In case if you do not receive answers to your question today, you will certainly receive answers via email shortly. • Thanks for your participation and enjoy the session!

3. About Aspire • Thought leader in Outsourced Product Development • 1100+ product releases to date • 80+ customers; 475 producteers • 63% CAGR over the last six years • Offices in Chennai (India), San Jose, CA, and London, UK • ISO 9001:2000 certified Awards Ranked 7th in Business Today Survey featuring the Best Companies to work for in India in 2005 Ranked in the top 500 fast growing technology companies in Asia Pacific for 3 years in a row

4. Panelist DaniShomronSaaS Expert, Calia Consulting • A recognized thought leader on the issue of SaaS, posting his ideas on ‘Dani’s Perspective on SaaS’ and lecturing to CIOs on SaaS. • Held positions of VP Service Operations at a number of SaaS start-ups as well as Business and Operations Manager at Mercury Managed Services (now HP-SaaS), and has consulted on-demand companies on service operations and traditional ISVs on the transition to SaaS • Co-authored the book ‘CIO Perspectives’ (Kendal Hunt Publishing, November 2007), contributing the chapter on SaaS and is now writing a book on SaaS Service Operations.

5. Transition to SaaS The Impact on the ISV Dani Shomron June 2009

6. Agenda • Do or Die • The paradigm shift • Changes across the organization • Recipe for failure • How do we succeed?

7. Do or Die • SaaS has become mainstream. Adoption – 76% • SaaS in no longer a point solution but strategic • Within five years 95% of ISVs will be delivering software as a service • All new S/W will be offered as SaaS. • Beyond niche markets every ISV will deliver through the Cloud • Companies that do not, will become obsolete, irrelevant • ISVs are getting it – but a ‘me too’ approach will fail

8. Total Upheaval • The transition to SaaS is a paradigm shift • Not another delivery mechanism • Selling a Service not a Product • Will affect every silo in the organization • Introduce new functions and entities • Operations • 24X7 support • Service Marketing • Technical Account Managers • SLAs

9. Engineering • 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

10. QA • Shorter release cycles • Support single platform (multiple browsers) • Performance and Load testing • Security testing • Test interaction between H/W & S/W

11. Operations • New group with responsibility for ‘keeping the lights on’. 24X7 • Build, manage, monitor, improve. • Improve uptime, performance • DBAs, System & Network, App Engineers • Work with R&D, QA, Sales, Support, PS • The hub of the offering, process oriented

12. Customer Support • User experience, customer sat and success are paramount • Therefore support has important role, higher skills, higher pay • All IT communications at your doorsteps • Customer services will switch to a 24X7 mode • Knowledge upgraded from installation / maintenance to app level knowledge • Develop problem resolution skills

13. Sales • Substantial changes • From Elephant hunting to cyber sales • From selling a product to selling a service • From perpetual to subscription • From hunters to farmers • From flying around the globe, wining and dining to closing deals over the phone • Compensation up-front to spread over a year or more • Sales cycles shorten dramatically • Partners, channels, resellers, SaaS aggregators play a more important role for maximum exposure

14. Marketing • 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, free trial • Less control over what information is available to potential customers • Consider building an open community around users and developers.

15. Finance • Revenue stream and revenue recognition will change with an effect on the company’s financial outlook. • Financial systems capturing and forecasting deferred revenue will be needed. • Billing will become more complex, dealing with metering, collections, service level compensation and renewals • New systems will need to integrate with the existing financial systems.

16. Professional Services • Switch from installation and upgrades to application know-how • 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

17. Legal • As the company will be selling a service, Service contracts will be needed not software contracts. • New entities: SLAs, renewals and add-on services • Contracts with service providers such as hosting and ISPs. 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 certification? Would your hosting provider need one? All of these are still unclear in this emerging market.

18. Success is Not Guaranteed The more successful the ISV, the more entrenched in the old paradigm (SAP) Not in company’s DNA. Switch from product to service. Shift of focus to operations and customer service. Change the pace of dev and delivery. Expect push back - Internal resistance to change: R&D, QA, Services, Sales. (MMS) Fear of cannibalization of existing sales

19. So How Do You Thrive? • Paradigm shift – need C&V level commitment to switch to SaaS model • Ensure a buy-in at all levels – make it a company goal - get Sales involved at early stages • Offer a sub-system as a POC • Most companies will go thru a hybrid phase • If possible – spin out company, whether as a separate entity or conceptually. • Integrate existing solutions. • Get help

20. Summary • SaaS is here to stay • Transition is akin to a DNA transplant • Expect pushback • Get a full buy-in from key holders • Just Do It! It is worth it – get help

21. Panelist Janaki JayachandranHead – SaaS Specialization, Aspire Systems • Currently heads the SaaS Specialization Business unit at Aspire Systems • In his current capacity, he is responsible for the business development and delivery functions focused on SaaS • Key person in customer interactions and new customer acquisition by getting feedback and adding value to their business • Instrumental in defining Aspire’s focus in SaaS and Cloud Computing. He closely monitors industry trends in SaaS and collaborates with Aspire’s SaaS CoE to build internal expertise

22. Agenda • Feasibility Assessment • Architecture Aspects • Strategic Approach • SaaS Capabilities • Pushing to the cloud

23. Feasibility Assessment LOW HIGH

24. Architecture Challenges

25. Demystifying the Cloud P R O V I D E R S N E E D S Application SaaS Your own App. Developers, Rapid Development of Functionality Framework PaaS Force.com, Google App, Long Jump Software Architects, Tested and Proven Architecture EC2, Azure, Rackspace Hardware IaaS Network Architects, Security, Hosting

26. Strategical Approach – Reuse Vs. Rewrite

27. Choosing your SaaS Maturity Level Business Volume Cost Time Product Size

28. Maturity Model Factors

29. Considerations for SaaS • Availability of Technical Skill Sets • Choose the right maturity model – depending on your immediate and future business needs • Level 1 and Level 2 provide more value to customers, where as Level 3 and Level 4 are intended to provide more value to the ISVs • Evaluate virtualization as an alternate for multi tenancy • Leverage pre-built SaaS Frameworks

30. Ideal Scenario for PaaS • Focus on functionality rather than engineering aspects • Current software uses legacy technology – anyway it’s time to change • Leveraging vertical/domain support by PaaS providers • One stop solution for SaaS + IaaS

31. Considerations for PaaS • Availability of Technical Skillset • Vendor Lock-In • ROI (SaaS Vs. PaaS) • Support for product vertical • Support for Non Functional Requirements • Evaluate platforms that does not mandate complete rewrite Ex: SaaS Grid • Business Risk in storing data at an external location

32. SaaS Administration Challenges

33. Pushing To The Cloud Self Hosting IaaS Providers Data Centers

34. Hosting Challenges • Availability- complying with the SLAs • Physical/Network Security • Back-up of application and data • Internet Bandwidth/Redundant Lines • Storage Capacity • Hardware Scalability • Ease of upgrades

35. For more details DaniShomron SaaS Expert Calia Consulting E-mail: dani@calia.biz Website: www.calia.biz

36. For more details Janaki Jayachandran Head – SaaS Specilization Aspire Systems E-mail: janaki.jayachandran@aspiresys.com Website: www.aspiresys.com

37. For more details Kanchana Rajagopalan Aspire Systems E-mail: kanchana.rajagopalan@aspiresys.com Website: www.aspiresys.com Ph. No: +91-44-67404000

38. Questions