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Posts Tagged ‘Financing’

Over the past 15 years I’ve seen so many software companies’ “SaaS Migration Strageties” perish as they jump on the SaaS bandwagon and try to migrate their software to the cloud. So I thought I’d come up with some simple rules to follow:

1. SaaS is more than just a financing model

Too many people (including analysts) talk far too much about SaaS simply being another way of  financing software purchases. NO, NO, NO, SaaS is whole new way of purchasing, delivering and using software. The Sales Process & Pipeline is different, the R&D lifecycle is different, the support mechanisms are different, Product Messaging & Positioning are different , revenue recognition is different. If you are just after an alternative financing model for your business you need to consider the hosted/managed service alternatives. It’s a business model not a financing option.

2. Ensure Rapid Deployment for success

There is truth in this phrase “On Demand”. Every successful SaaS business can rapidly deploy their software, often without vendor intervention. This means you need to take a long hard look at your software and ask yourself “Can we make this a Rapid Deployment Application?”. If you still need to undertake significant professional services work to deploy your software for customers then you’re running a hosted solution that will do little to drive user adoption. Go back and understand what you need to do to make it a RDA. Investment upfront will pay dividends very swiftly.

3. Reduce Software Replication

You don’t need to run the ‘multi-tenanted’ architecture from the outset, but you do need to understand where your scale points are, and have a migration path mapped out as your SaaS strategy succeeds. Running multiple copies of your entire software  has more inherent problems that is worth managing. You’ll kill any chance of reaping the benefits of eventually running a single solution by doing this, and burn 4 times as much cash than you would with a proper SaaS migration Strategy.

4. Properly Resource Your ‘SaaS Migration Strategy’

Every SaaS business [new or converted] goes through an initial period of cash burn as you line up your SaaS ducks. Prepare for this. You’re embarking on a new investment that requires dedicated resource to succeed. If you can’t fund or project manage dedication to the strategy then you are better off putting the strategy to one side. Over the last year I have helped 4 software businesses with their ‘SaaS migration Strategy”, 2 took my advice on this and succeeded, one took my advice on board after wasting 3 months of distracted resource planning, and the other has shelved their plans after 5 months.  Remember your SaaS Migration Strategy is more than just a software project.

5. Integrate to communicate.

Now that you’ve decided to run your software from the cloud the best way to exploit this is via integrations to other systems, I go as far to say, put some of your maketing spend into creating integrations. It’s the principle of social networking applied to SaaS applications, the more you network the more business you’ll generate. Just take a look around the web and how many integrations the successful SaaS apps have. SaaS requires integration to be truly useful.

Ignore any of these and you risk running a hosted/managed solution not a SaaS solution. More cost, less benefit…..

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