A report on Software as a Service

1. Changing Landscape From ISV Monopoly to Integrated “SaaS”

4. a new way to deliver and consume software over the Internet

5. a new pricing/financial model for the payment of software

6. SaaS does compress the supply chain for software and eliminates IT responsibilities for the end-customer

7. ISVs

8. New ISVs ( Or ISVs developing new SaaS Applications

9. Transitioning ISVs (ISVs Migrating their Existing Apps to SaaS)

10. IT Services Players

11. Enterprises

12. IT Leaders

13. Business LeadersStakeholders SaaS 3.0 Integration-as-a-service Development-Platform-as-a-service Service Application-as-a-Service SaaS 1.0 SaaS 2.0 ASP SaaS providers sourced software from 3rd party software providers Application Centric SaaS providers own the software SOA Vendors provide platforms for development, run-time, and integration as a service. Runtime-Platform-as-a-Service Infrastructure As A Service Supply Side Demand Side Public Private Hybrid Multi Tenant MT through Partners Single Tenant Service from vendors which can be accessed across the internet using systems in one or more data centers, shared among multiple customers with varied degrees of data privacy control. Computer architecture built, managed and used internally by an enterprise and using a shared services model with variable usage of a common pool of virtualized computing resources. Computing environment in which an organization provides and manages some resources in-house and has others provided externally. This architecture allow numerous enterprises to subscribe to the computing capabilities while retaining privacy and security. This is the common and dominant model. E.g.: NetSuite, Oracle CRM, Microsoft, Salesforce.com Multi-tenant model offered through SaaS provider’s hosted partners. E.g.: Microsoft Dynamics provides SaaS services to its customers through its thousands of hosted partners across geography. Typically, large companies prefer to deploy isolated / single-tenant models. This doesn’t share services with other enterprises. E.g.: Oracle CRM provides single-tenant model Source: McKinsey& Other Secondary Sources

15. No Commitments,

16. Minimums , or termination fees

17. Cost can be as low as 25c per hour

18. Monthly usage basis engagement.

19. Variable Plan: Pay as you go model, no minimum monthly commits

20. Committed: commitment of a base level monthly usage and then on a usage basisISVs with predictable software usage requirements can maximize their discounts and flexibility by purchasing software through their existing channels Hourly Monthly Perceptual Integrators Regulators SaaS Market Govt Institutions /Industry Regulators Companies facilitating implementations Providers Companies operating SaaS systems to deliver services Source: IBM White Paper & Other Secondary Sources

22. SaaS Platform is designed for multi-tenancy , which affects layers across the stake in many ways.

24. Customer Relationship

25. Customer Understanding

26. Existing Applications and Solutions

27. Web-Centric Sales & Marketing

28. Web 2.0 Usability/User Experience, Infrastructure & Operations

29. Web 2.0 Customer Service

30. Internet-scalable Applications

32. Annuity-like Recurring Revenue

33. Higher Total Revenue Opportunity

34. Alignment with economic climate

35. Pure-Play SaaS Competitors

36. Traditional Competitors with SaaS Offerings

37. Traditional Competitor acquisition of SaaS Startup in Your Marketo T Source: McKinsey

39. Rapidly Provisioned from weeks to minutes

40. Centralize operations

41. Managed as a single Large Resource (Virtualized)

42. Increase admin efficiency

43. Services at Elastic Scaling

44. Improve service levels

45. Standardize offerings

46. Appropriate service level for applications

47. Technology advancements: Can shape the software for better operational efficiency

48. Best of breed services from the author of your application.

49. Flexibly Priced - Pay as you go

50. Pay only for what you need-useful when the service demand fluctuates

51. Enforced Security

53. Fixed Cost Advantage vs Variable Rental Cost

54. Meeting various Non functional SLAs like Reliability, Performance etc

55. Inefficiencies of Generic Computing

56. Perception exists as more generic, more complex, less understandable, performance drop, not easy to migrate

57. Vendor Lock-inCriticism Survey Data - Cutter Consortium Source: Making the SaaS Decision: Jeff Hagins, Cutter Consortium white paper and Other Secondary sources

58. Competitive Landscape The SaaS Market has an intense competitive landscape given the number of Mega-vendors and the startups that have entered or likely to enter the space . Two Types of competition emerging among SaaS Platforms Between the Established Mega Vendors & pure play SaaS Vendors Between different archetypes of SaaS Platforms The SaaS Market will be shaped as much by the demands of the stake holder as by platform vendor action . Vendors have to focus on Four critical Elements of their business to succeed. Build a robust Offering Monetize Effectively Deliver Extensive Value Added Service Drive Ecosystem Growth Success Mantra! Large Customers Typical Customers Non Addressable Customers Newly Addressable Market Source: Making the SaaS Decision: Jeff Hagins, McKinsey and Other Secondary sources

59. SaaS Stats Top 50 SaaS Vendors (Q1 2010) 5 Key Process Areas Business Technology Operations Business & Financial Management Application Architecture Operations Management Go to Market Effectiveness Hosting Architecture Operation Support Top 10 Application Areas (based on number of SaaS providers(n>1500)) Top 10 Application Areas (based on number of SaaS providers (n>80))

60. Spreading SaaS: Horizontally & Vertically SaaS Market Share Projection Worldwide market for software-as-a-service is $7.5 billion in 2009, which represents 7.7% of the total enterprise application revenues and constitutes 89% of the cloud computing market. On-premise software market is expected to grow at a CAGR of ~4% up to 2013. The market share will reduce to 87% ($117.8bn) in 2013 from 91% ($96.2bn) in 2008. SaaS market will share 13% in 2013, growing at a CAGR of ~17% from 2009 Source: Data Monitor, Gartner and Other Secondary sources

61. SaaS Associated Industry Dynamics Industry Value by Revenue In US$B (Projected) Industry Value by % Growth (Projected) Source: Data Monitor, Gartner and Other Secondary sources

62. The SaaS Opportunity 31% Growth (CAGR) for On-Demand CRM 61% Growth In Enterprise Adaptation 25% Penetration of $220 Billion Software Industry by 2011 25% 61% The economics of purchasing SaaS solutions in a down-trending market are more attractive to IT buyers than purchasing enterprise software. Rising oil prices, limitations on access to credit, and the financial market uncertainty will apply more pressure on capital expenditures – forcing companies to lower their risk, and pay-as-you- go services provide a credible alternative. Increasing interest in simplified IT management and demand for better utilization of IT assets are creating a greater focus on the development of enabling technologies such as SOA, virtualization, and cloud computing. Further cost reduction and efficiencies to implement SaaS solutions will fuel adoption. Consumerization is beginning to drive innovation at the enterprise level. There is a real surge when it comes to the consumerization of technology and leveraging the power of the masses. Part of this is the transformative force of the Internet and the burgeoning market for mobile and wireless applications; as consumers and businesses become increasingly more comfortable with using reliable and secure apps that are not on their desktops, adoption of SaaS will be inevitable. 1. Current Macroeconomics favor SaaS model 2. Enabling technologies will fuel SaaS acceptance: 3. The “Consumerization” of Technology is inevitable: Source: Making the SaaS Decision: Jeff Hagins, McKinsey and Gartner

63. Market Segmentation Key Providers In Each Key Segment CRM – Sales will remain the largest contributor (70%) while marketing and servicing segments have weaker penetrations but are expected to experience higher growth. About half of the sales revenue within CRM market is contributed by Salesforce.com, which maintains its leadership in CRM SaaS market. The bigger IT organizations like Oracle and SAP are heavily investing in developing and acquiring on demand solutions ERP - On demand represents a 5% of total ERP market. The Human Capital Management segment (such as e-recruitment, performance and talent management, and expense management) is promising mainly due to out-of-box- functionalities that can be applied across industries. However, SaaS has a weaker presence of Enterprise Asset Management (EAM), Manufacturing/ Operations and Financial Management Systems s a result of their higher process and integration complexity CCC - The strongest segments are web conferencing and e-learning and to a lesser extend e-mail and team collaboration. However, Enterprise Content Management and Instant Messaging sub-segments remains barely adopted at ~3% SCM – On demand represents 11% of total SCM market. The higher adoption areas will be Procurement and Logistics. Supply chain planning will experience lower growth due to higher business process complexity Worldwide Software Revenue for SaaS Delivery Within the Enterprise Application Software Markets & Demand Side Trends Source: Gartner, Deloitte, IDC

64. Analysis of Key Providers CRM ERP Source: Other Secondary sources

65. Evaluation and Selection of Partner Survey - Cutter Consortium When considering a hosting service provider to partner with for hosting your SaaS solution there are many important criteria you should evaluate. Some of the most important criteria you should consider are depicted in the chart. N=650 Buyer Behavior Segmentation/Polarization Business Centric Both Technology and Business models are very nascent in SaaS market, and innovation levels are high. While this is an opportunity for vendors to shape the market, it is a major issue for stake holders that are struggling to identify the market’s direction. In addition due to extensive use of open technologies and web services by vendors SaaS Platforms are more disaggregated and open compared with traditional software platforms. Best Opportunity Buyer for SaaS Web Agnostic Web Centric Buyers who are primarily interested in On-Premise Software Buyers who are primarily interested in SaaS Best Opportunity Buyer for SaaS Technology/ Feature Centric Source: McKinsey, Data Monitor, Gartner, IDC and Other Secondary sources

66. IT Consulting Landscape Market Value: The global it consulting market shrank by 0.6% in 2009 to reach a value of $498.2 billion. Market value forecast: In 2014, the global it consulting market is forecast to have a value of $561.5 billion, an increase of 12.7% since 2009. Market segmentation I: Integration & development services constitute the largest segment of the global it consulting market, accounting for 49.5% of the market's total value. Market segmentation II: Americas accounts for 51.9% of the global it consulting market value. Market share: IBM Global Services is the leading player in the global it consulting market, generating a 6.7% share of the market's value. Market Value: $ billion, 2005–14 Market Segmentation II : % share, by value, 2009 Source: Data Monitor, and Company filings

68. Call Center Software Provider MRI Launches SaaS Offering

69. ‎CDC Software Updates SaaS for Government, Non-Profits

70. IBM Tivoli Launches SaaS Help Desk Software for Small Businesses

71. IBM Announces Blueworks Live, 'Lite' SaaS Based BPM

72. IBM, ADP Launch Cloud Tax Service For SMBs

73. Navajo Systems Virtual Private SaaS for LotusLive Included by IBM ...

74. Microsoft launches Office 365 cloud suite a day after Ozzie retires

75. Microsoft & CambridgeSoft target SaaS data sharing

76. Dell picks Symantec for e-mail security for SaaS services

77. SAP's StreamWork Now Available in Google Apps Marketplace

78. Orange, Cisco, EMC, VMware form cloud computing alliance

79. SaaS Specialist Reels In Cisco As Investor, Reseller

80. Epicor Unveils On-Demand Carbon Accounting Solution

81. ‎Salesforce's Database.com: Fat SaaS Here We Come!

82. Salesforce.com unveils cloud database and free Chatter

83. Salesforce.com Further Integrates with Google Apps, Data

84. ‎'Best SaaS LMS' Awarded to GeoLearning for Sixth Consecutive Year

85. Brit Insurance Moves to IT Management in the Cloud

86. AppFirst Upgrades Cloud Management for Amazon, Rackspace, Others

87. One to One Connect's MessageMaker Goes Social, Mobile with Version 3.8 Release

88. Kawasaki Motors Corp., U.S.A. Chooses SaaS Service Desk InfraDesk to Automate IT Service Management

89. ‎OpenLogic Exchange Expands Open Source Compliance Capabilities‎ Dell Acquires Boomi ‎Dell buys Big Blue-based health cloud piccy firm inSiteOne. ‎ HP Purchases Stratavia Google Snaps up DocVerse Red Hat Snags Makara IBM Buys Cast Iron System CA Picks up 3Tera CA Purchases Nimsoft CA Nabs 4Base Technologies Salesforce.com Acquires Heroku Cisco System Buys Linesider Technologies ‎J2 Global Acquires Protus IP Solutions For $213 Mln Citrix buys European SaaS firm Netviewer Rackspace Buys Cloudkick ‎Teradata Acquires Aprimo VMware jumps further into SaaS with Zimbra Epicor to Acquire Spectrum HR Paychex to Acquire SurePayroll Lawson buys human-resources specialist Enwisen NIIT Technologies acquires IP assets for foray into Healthcare segment ‎ ‎ Source: Google news & other secondary resources

90. Thank You!