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SaaS Special Report Product Image

SaaS Special Report

  • Published: October 2006
  • Region: Global
  • SoftwareCEO (Capable Networks)

131 pages of tips, tricks, and tactics to help you build a profitable SaaS (Software as a Service) business.

-14 Lessons from Four ISVs Who’ve Made the Transition to SaaS.
Key practical advice for you to learn from others on how to build a subscription-based business addressing topics such as security, performance, negotiations, research, and revealing outsourcing partners.

-66 Practical, Real Life Tips From Five Firms Who've Struck Triple-Digit Growth with SaaS.
Learn how to raise millions in VC, transform your software from the unknown to a known, and leverage your partners to put your firm on the fast track to growth.

-16 Tips on Marketing, Selling, and Pricing.
Discover why your existing sales model won’t work, how to compensate sales reps, how to create and offer transition paths, and other practical tips to profitable marketing and sales of SaaS.

-24 Pricing Points.
Advice on how to price subscription software – including insight into how Salesforce.com does it.

-28 Tips on How to Transform Your People.
Get tips from OpSource on how SaaS affects your R&D, finance, sales, and marketing teams.

-Hosted READ MORE >

Table of Contents
Introduction
Welcome
Special Offer
Thanks and Contact Information
Two keys to success with SaaS
SaaS success key #1: Price your software based on your customer's success
SaaS success key #2: Offer new wine in the new bottle; do something that couldn't be done before
Software as a Service, part 1: How to get started with SaaS—14 lessons from four ISVs who’ve made the transition
The appeal of SaaS
SaaS lesson #1: Define your own reasons for moving to subscriptions
SaaS lesson #2: If it doesn’t scale, it’s no sale
SaaS lesson #3: Learn from history, so you don’t repeat it
SaaS lesson #4: Research, research, research: Don’t build it until you know what your users want
SaaS lesson #5: Make your multi-tenancy decision early on
SaaS lesson #6: Remember that security still matters, but the focus is on the host
SaaS lesson #7: Performance trumps features
SaaS lesson #8: In the on-demand world, forget customization
SaaS lesson #9: Reveal your outsourcing partner
SaaS lesson #10: But don’t pass the buck
SaaS lesson #11: Your partner is the delivery expert; get their advice
SaaS lesson #12: When it comes to hosting, D-I-Y spells dumb
SaaS lesson #13: Negotiate for success, not just failure
SaaS lesson #14: Consider an SaaS spin-off, or at least a separate business unit
Software as a Service, part 2: Show me the money — 16 tips on marketing, selling, and pricing software on demand
SaaS money tip #1: A new service needs new marketing
SaaS money tip #2: Don’t assume you know what your customer wants
SaaS money tip #3: Build your software before you build your brochures
SaaS money tip #4: SaaS is still new; expect to educate your prospects
SaaS money tip #5: Your existing sales model likely won’t work
SaaS money tip #6: Consider creating a firewall between the old and the new
SaaS money tip #7: Your sales reps won’t touch SaaS unless they see equivalent commissions
SaaS money tip #8: SaaS pricing remains a crapshoot, but there are some trends
SaaS money tip #9: Get smarter about accounting for your costs
SaaS money tip #10: Consider offering a transition path, in both directions
SaaS money tip #11: Learn from history, and tune up your sales pitch
SaaS money tip #12: The CIO’s window of visibility is shorter
SaaS money tip #13: First-to-market is more important than ever, so jump on it
A real-life scenario: Building software as a virtual company
SaaS money tip #14: Be prepared for too much success
SaaS money tip #15: Don’t even think about looking for investment capital without an SaaS strategy
SaaS money tip #16: Get used to SaaS, and change how you think about the software business
SaaS firm expensewatch com answers the question: Where does all the $$ go?
Four software startups later
SaaS growth tip #1: Find a problem where software can come to the rescue
SaaS growth tip #2: Get the inside story on how customers actually use your software
SaaS growth tip #3: Small buyers have small budgets Give them a small price tag
SaaS growth tip #4: With SaaS, resist the urge to have multiple versions with different features
SaaS growth tip #5: Make friends with firms with complementary products
SaaS growth tip #6: Make sure your sales people have skin in the long-term game
SaaS growth tip #7: You don't need to visit You can sell from a distance
SaaS growth tip #8: Sarb-Ox-dot-com-o-matic? Why be just another voice in the crowd?
SaaS growth tip #9: Listen with your customers' ears
SaaS growth tip #10: Develop to interoperate with the systems your customers intend to buy
SaaS growth tip #11: Zero in on a niche Don't try to be all things to all people
SaaS growth tip #12: Make sure you're objective is crystal clear to everyone in your company
SaaS growth tip #13: If you're not already doing it, prepare for the onslaught of on-demand
How to grow 380 percent with an unknown software product: 14 tips from SaaS firm Acrelic
Growing an unknown tip #1: Start by consulting
Growing an unknown tip #2: Let customers pay for ongoing development This makes the product better
Growing an unknown tip #3: Fix the cause, once and for all
Growing an unknown tip #4: Build something truly worthwhile
Growing an unknown tip #5: Make sure customers can use your product
Growing an unknown tip #6: Be flexible with releases Not everyone may need them
Growing an unknown tip #7: Smaller development teams are more nimble
Growing an unknown tip #8: Swim in a big pool Target a big market
Growing an unknown tip #9: But know what adding more business will cost
Growing an unknown tip #10: Make it easy for customers to get started, even if that leaves money on the table
Growing an unknown tip #11: For a SaaS sales force, balance "hunting" with "farming
Growing an unknown tip #12: Time your entrance for maximum effectiveness
Growing an unknown tip #13: Find a community Somewhere
Growing an unknown tip #14: Manage the soft stuff, too
How Print Audit grows 247 percent a year by aligning its goals with its channel partners
Align your goals tip #1: Listen closely for business opportunities
Align your goals tip #2: Help boost your channel partner's sales and you'll boost your own sales
Align your goals tip #3: Give your partners a compelling pitch Align your goals tip #4: Always have a person answer the phone
Align your goals tip #5: Celebrate your successes with your people And their people
Align your goals tip #6: Celebrate your customers, too
Align your goals tip #7: Take out any speed bumps that slow down users
Align your goals tip #8: Call users soon after the sale to get them up and running

Align your goals tip #9: Next, ask for a testimonial
Align your goals tip #10: Dedicate resources to entering competitions
Align your goals tip #11: Know what it takes to win awards
Align your goals tip #12: And use those awards to open new partner opportunity doors
Align your goals tip #13: Measure everything
Align your goals tip #14: See how SaaS can open up new opportunities
Align your goals tip #15: Build a great team, then lead them into the future
11 tips on how SaaS firm Razorsight got on the fast track to growth, and raised $10 million in VC
The lovely challenge of growing a business
SaaS growth tip #1: Redraw your roadmap to match where you are today
SaaS growth tip #2: The money is out there, if you know how to get it
SaaS growth tip #3: If you outsource, keep an eye on the future
SaaS growth tip #4: If you outsource, keep close ties to the office
SaaS growth tip #5: Don't under-estimate the importance of your SaaS infrastructure
SaaS growth tip #6: Going vertical? Use your network to find contacts to approach in other industries
SaaS growth tip #7: Moving your office? Get all your ducks in a row, early
SaaS growth tip #8: Tame the borrowing beast to sell out for the best price
SaaS growth tip #9: Leverage your sales muscle with big-name partners
SaaS growth tip #10: Call in the sales experts No one can do everything well
SaaS growth tip #11: Be ready to pay a sales superstar more than your CEO
13 ways iSqFt builds success with software and services for the construction industry
Breaking news: iSqFt to merge with competitor
Conway's many strategic moves
Success building tip #1: The correct order is: Horse first, then cart
Success building tip #2: Think locally, act locally
Success building tip #3: Leverage industry associations and networks
Success building tip #4: Spoon-feed your users, if they're not techno-savvy
Success building tip #5: To build real value, add new functions that everyone can easily appreciate
Success building tip #6: Don't develop anything without speaking with end users
Success building tip #7: Trim the sails tight, and don't leak cash
Success building tip #8: To expand your market, plan an organized campaign
Success building tip #9: Buy what you need to fill in your gaps
Success building tip #10: Your cash should flow from customers, not VCs
Success building tip #11: Make your natural leaders do the hiring
Success building tip #12: Love your vertical, and keep on researching it
Success building tip #13: The process is paramount
How SaaS affects software R&D and finance people: 14 more tips from OpSource
Nine tips on SaaS and your R&D team
SaaS R&D people tip #1: Count on having to re-educate them
SaaS R&D people tip #2: Forget skunk works You won't have time
SaaS R&D people tip #3: Forget one big, new version once a year Think much smaller releases, far more often
SaaS R&D people tip #4: Test your code like never before
SaaS R&D people tip #5: Forget customization
SaaS R&D people tip #6: Forget cross-platform support Focus on your most robust platform
SaaS R&D people tip #7: Don't get tempted by browser-specific extensions
SaaS R&D people tip #8: Re-architect your code to split the foundation apart from the features
SaaS R&D people tip #9: You can make the transition to SaaS one product at a time
Five tips on SaaS and your finance people
SaaS finance people tip #1: Allow time for changes to sink in
SaaS finance people tip #2: Don't just claim to do SaaS Do what it takes to learn and apply this new business model
SaaS finance people tip #3: Appreciate the high-quality revenue flowing from SaaS
SaaS finance people tip #4: Learn how to bill every month, right now
SaaS finance people tip #5: Don't start yet another set of books
How moving to SaaS affects software sales and marketing people: 14 tips from OpSource
But what about your people?
Six tips on SaaS and your sales people
SaaS sales people tip #1: Sell your sales force on the advantages of on-demand
SaaS sales people tip #2: Equalize compensation over one to three years, depending
SaaS sales people tip #3: Say goodbye to end-of-quarter panic discounting
SaaS sales people tip #4: Develop a farming — not hunting — sales force
SaaS sales people tip #5: If you're going down-market, not everyone on your sales team may make the transition
SaaS sales people tip #6: Consider account management to keep customers happy
Eight tips on SaaS and your marketing people
SaaS marketing people tip #1: Think web, web, web
SaaS marketing people tip #2: Favor road shows over trade shows
SaaS marketing people tip #3: Be frugal with print advertising
SaaS marketing people tip #4: Boost your webinars and online demos
SaaS marketing people tip #5: Whatever you do, don't scale back the features in your online demo
SaaS marketing people tip #6: Instead, limit your demo by time, number of accesses, or system resources
SaaS marketing people tip #7: Get product managers instant user feedback
SaaS marketing people tip #8: Get your documentation online
How to price subscription software—and how salesforce com does it
Price point #1: First, review your non-subscription pricing
Price point #2: Ask whether subscription pricing makes sense for your customers
Price point #3: Ask whether subscription pricing makes sense for your company
Price point #4: Consider contract terms rather than subscriptions
Price point #5: You have to make the new model play with the old model
Price point #6: Forget the ASP business; stick to software
Price point #7: Allow for added expenses on the support side
Price point #8: Allow for added complexity (and possible backlash) with upgrades
Price point #9: You need to offer a path back to perpetual
Price point #10: Don’t try to convert your perpetual licenses to subscription
Price point #11: Use subscriptions to win over skeptics, procrastinators, and small spenders
Price point #12: Even the big guys haven’t figured out how to make the transition
Price point #13: Mixed models will work, but not without a dominant plan
Price point #14: Don’t limit yourself to standard subscriptions
Price point #15: Pay-as-you-go is a convenience, and convenience is worth a premium
Price point #16: Simple division isn’t the answer
Price point #17: Unless you can undergo a major mind shift, you should perhaps forget about selling subscriptions
Price point #18: Your best subscription models aren’t in the software industry
Price point #19: With subscription pricing, simplicity is key
Price point #20: Raise prices only when you can prove value
Price point #21: At the same time you slice up payments, slice up ROI claims
Price point #22: Sell monthly, but offer longer term options
Price point #23: At the end of the day, it still comes down to value
Price point #24: Subscription pricing requires a major mind shift
Further reading: A few good related articles
Hosted software: Where it works, where it doesn’t, and how you can find your place
What’s the right business model for software as a service?
Where’s the future for software-as-as-service firms?
If you don’t move your software to the Web, someone else will
How to determine pricing for your rental software
When to go direct, when to go indirect, and how to manage the in-between
The move to rentals will create a huge change in your daily routine
Software as a service: Use these 10 facts to create more value in your firm
Fact #1: Subscriptions are the only way out of a mature market
Fact #2: SaaS is the long-haul model
Fact #3: Gross margins aren’t as fat with SaaS
Fact #4: SaaS can help put the squeeze on expenses
Fact #5: The nature of selling changes under SaaS
Fact #6: Nothing replaces loyal customers Fact #7: Use SaaS to widen your market
Fact #8: You must weather customer resistance
Fact #9: The 100% subscription company is a dangerous myth
Fact #10: Serious investors love SaaS
How to make your own luck in the software biz: 18 ways to CORESense prospers with SaaS
SaaS sales key to recurring revenues
Make your own luck tip #1: Read the market a few years out
Make your own luck tip #2: Look for the early adopters who “get the concept” before anyone else
Make your own luck tip #3: Raise cash the old-fashioned way: sell your software
Make your own luck tip #4: For a rock-solid foundation, use open source offerings like the LAMP stack
Make your own luck tip #5: Partner with a huge player who wants to make the pie bigger for everyone
Make your own luck tip #6: Know people who know people
Make your own luck tip #7: Don’t spend more to land clients than they’re worth
Make your own luck tip #8: This isn’t the New Economy, Part Deux; revenues do matter
Make your own luck tip #9: Get a handle of your customer’s ROI
Make your own luck tip #10: Use numbers to overcome objections
Make your own luck tip #11: Use technology to help you manage
Make your own luck tip #12: Use software to help you recruit
Make your own luck tip #13: Design software to support a business process
Make your own luck tip #14: Look at the software market like the ocean, with layers of turbulence
Make your own luck tip #15: Be responsive to customer requests — but don’t create lots of custom versions to support
Make your own luck tip #16: Don’t build something perfect; build something flexible And keep your developers in the loop
Make your own luck tip #17: Even with SaaS, manage releases carefully
Make your own luck tip #18: Learn from history, ancient and modern
Index 127

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