Building a scalable and profitable saa s business model

Building a Scalable and Profitable
SaaS Business Model
13-Nov-2013
www.techcello.com

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Cloud Ready Development Framework For SaaS and Enterprise Software

Summary
Agenda SaaS Business Model
Blind spots in SaaS
SaaS Life Cycle
Business Management Challenges
Solutions
Customer Service Challenges
Solutions
Product Engineering Challenges
Solutions
About Cello
Benefits
Questions

Speaker Profiles
 14+ years of experience in architecting cloud and SaaS solutions
for both ISVs and Enterprises
 Chief architect in designing and constructing CelloSaaS
framework
 Plays consultative role with customers in implementing SaaS
solutions
Jothi Rengarajan
Chief Technical Architect
 An ardent cloud enthusiast and a prolific speaker at NASSCOM &
Cloud Connect Events
 15+ years of software development experience, he is instrumental
in defining CelloSaaS framework
 Enables Enterprises and ISVs to define their cloud strategy
Janaki Jayachandran
Director of Technology

SaaS Business Model
• Expect more customers
• Retaining customers is
more important than
getting new customers
• Expect churn, as
customers can now easily
switch vendors
Scale
• Trickling revenues over a
period of time
•Attractive and flexible
pricing model to meet
SMB budget
• Keep enriching features
to increase upsell
Revenue
• Responsible for both
Hardware and Software
• Security and Availability is
key
• Should scale to meet
increasing customer base
Infrastructure
• Responsible to meet the
SLAs
• Should expect more
tickets as customer base
grows
• Recurring payment
collection
Operations
Your
SaaS
Solution
How “Complete” is
Your SaaS Solution?

Idea (or) Existing
Product
ISVsB tlyinpdic Sapllyo toverlook two otherB ilminpdo Srtpaontt areas
Selling
Blind Spots in SaaS
Technical
Feasibility/PoC
Architecture Develop/Migrate Testing Deployment
Solution
Servicing
Hurray!!! I am on SaaS now!!!
Can you be profitable?

SaaS – Number Game
Budget Split-up Monthly
Sales &
Marketing
30%
Customer
Service
30%
Administration
15%
R&D
15%
Profit
10%
Avg. Revenue
per Customer
Number
of
Customers
* Total Revenue
Cost of
Delivery
(CoD) (30%)
1 $ 2,000 10 $ 20,000 $ 6,000
2 $ 2,000 11 $ 22,000 $ 6,600
3 $ 2,000 12.1 $ 24,200 $ 7,260
4 $ 2,000 13.3 $ 26,600 $ 7,980
5 $ 2,000 14.6 $ 29,200 $ 8,760
6 $ 2,000 16.1 $ 32,200 $ 9,660
7 $ 2,000 17.7 $ 35,400 $ 10,620
8 $ 2,000 19.5 $ 39,000 $ 11,700
9 $ 2,000 21.5 $ 43,000 $ 12,900
10 $ 2,000 23.7 $ 47,400 $ 14,220
11 $ 2,000 26.1 $ 52,200 $ 15,660
12 $ 2,000 28.7 $ 57,400 $ 17,220
*10% Month on Month Growth
Customer Service (A) Cost of Delivery includes Hardware
cost, License cost, Tech Support and Account
Management

SaaS Life Cycle

SaaS Life Cycle Management Solution - Needs
Management Team
Customer
Service Team
Product Engineering
Team
Needs error free ,
efficient and innovative
mechanism to strategize,
manage and monetize
subscriptions.
Needs a quick and cost
effective way to roll-out
customers and process
their requests. Monitor
the product
performance and take
proactive measures.
Build high speed,
scalable and secure
system.

Cello – One Stop Solution
Cello has packaged these common requirements as a suite of
services, which can be easily integrated to your product.

Cello – Solution Areas

Business Management - Challenges
How can I shorten my sales cycle?
Can I provide a customer friendly subscription
model?
How can I increase my trial conversion rate?
How can I increase my upsell?
How can I reduce my churn?
How can I cost effectively manage and monetize
subscriptions?
How do I manage my Reseller?

Business Management - Solutions
Offer Self Subscriptions
and Trials
Module wise access
Innovative pay by use
model
Innovative pricing
model
Analyze and act on
hot/cold trials
Live Revenue Tracking
Track Customer
Behavior and Usage
Real-time tracking of
“pay as you go” usage
Automated Invoice
Generation
Automate Payment
Collection
Self Service Portal
Reseller Portal

SaaS
Solution
Tenant A Tenant B Tenant C Reseller A Tenant D
Module:
X
Y
Z
Module:
A
B
X
Module:
C
(usage
restriction)
Flat Cost: $100 Flat Cost: $125
Trial for 30
Days
Flat Cost: $125
Module:
X
Y
Z
Flat Cost: $25
Usage Cost:
$1 per
transaction
Module:
A
B
C
X
Y
Z
Commission:
20%
Payment:
Pre paid
Payment:
Post paid

Examples of Value Pricing Models
SaaS Product Pricing Model
Trading System Number of traders in the system.
Supply Chain
Management
x% of the total value of transactions.
Workforce Management
System
Number of workers managed in the system.
DMS Total volume of documents maintained.
Recruitment System Number of candidates hired through the system
Health Care System Number of patients managed through the system
CMS Number of content shared with other users

Business Management – Cello Features
• Product Editions
•Multiple Price Plans
• Fixed/Usage Cost
• Trial and Evaluations
•Upgrade/Downgrade
• Activation/Deactivation
Subscription
• Tenant Provisioning
• Self Registration
• Customer Analytics
• Customer portal
• Role based access control
• Support for Reseller Model
Customer
Management
•Metering Usage
• Invoice Generation
• Proration
• Applying Tax/Discount
rates
• Generic Adjustments
• Invoice Dashboard
Invoice
• Credit card Support
• Pay Pal Support
• Payment Automation
• Retry Policy
• Revenue Tracking
Payments

Business Management – Cello Screen Shots
Customer Analytics

Billing Dashboard

Customer Portal

Customer Service - Challenges
According to Forum Corporation Research,
“Almost 70% of the identifiable reasons why customers left typical companies had
nothing to do with the product. The prevailing reason for switching was poor quality of
service.”
According to a study by the Rockefeller Foundation,

Customer Service - Challenges
How quickly can I finish customer implementation?
How can I eliminate “shelfware”?
How can I provide my customer the ability to self
service their needs?
How can I proactively support my customers better
and increase customer satisfaction?
How can I proactively communicate with my
customer at different stages?
How can I reduce the involvement of engineering
team to service customer request?
How can I service more customers with less support
bandwidth?

Customer Service - Solutions
Automate customer implementation and enable self service
Aim for sign-in and immediate use of the system
Adopt configuration vs. customization. Embed
configurability in the respective areas within the product
Automate customer communication process
Track customer behavior
Track customer experience with the system
Track product performance

Provision Tenant
Typical Implementation Flow
Set up Data
Isolation
Setup Users Set Up ACL
Set up Look and
Feel
Set up Business
Process Screens
Set up Business
Process Workflows
Set up Recurring
Reports
Import Tenant Data Set up Integration

Typical Task List Of Customer Service Team
Send XYZ Report To Customer A
Send XML Data Export to Customer B
Take Data Backup of Customer C
Send Security Audit Information for Customer C
Send Subscription Reminder Email to the customers
Get the report of Customers who are not actively using the system and talk to them
Check the current performance health of the system

Customer Service – Cello Features
•Auto Tenant Provisioning
•Tenant Settings
Management
•White Labeling
•Single Sign On
Implementation
•Business process
Workflow customization
•Business Event Audit
Streams
•Event Driven Integration
Configuration
•Product Analytics
•Customer Analytics
•Query Builder
•Chart Builder
•Report Builder
Report
•Data Partition
Management
•Data back-up
Data
Management

Customer Service – Cello Screen Shots
Business Process Workflow

Configurable Notifications

Product Analytics

Tenant Management Dashboard

Product Engineering - Concerns
My Sales is doing great – oops! my product is not scaling
Machine cost is continuously going high
Hackers - why cant they leave me alone?
Two customers data in the same box!!!
God! One more system to integrate?
Are they kidding? They need 4 more fields and new
workflow???
My product road map is always blocked!
Hmm.. Customer insists on on-premise deployment!

Product Engineering - Solutions
Scale-out at all layers
Adopt Data-Shards
Adopt Multi tenancy
Adopt OWASP
Automate ACL and Data
Isolation checks
Adopt SOA
Adopt web hooks
Build configurable data
views
Build Configurable
Workflows
Build Configurable
Reports
Have a proper error
logging mechanism
Build your product
modular

Product Engineering – Scalable Solution
Load Balanced App Servers
Multi-Tenant Database
User Load

Multi-Tenant Database Dedicated DB
User Load

Tenant 1 to x
Tenant x+1 to y Tenant y+1 to z Dedicated DB
User Load
Tenant 1 to x Tenant x+1 to y Tenant y+1 to z Dedicated DB
Module A
Module B

Product Engineering – Cello Features
Security
User
Role/Privilege
Single Sign-on
Auditing Modules
Management
Mgmt.
Custom Fields Custom LoV
Ad-hoc Builders
Settings
Template
Dynamic Data
Scope
Business
Rules
Workflow
Dynamic
Forms
Enterprise Engines
Themes &
Logo
Integration Modules
Events Notification Templates
Query Chart Reports
Code
Productivity Utilities
Templates
Master Data
Mgmt.
Forms
Generation
Application Multi-Tenancy & Tenant Data Isolation
Pre & Post
Processors
Configurability
Modules
Your SaaS solution
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Product Engineering – Cello Screen Shots
Granular Level of Access Control

Data Partition Management

Events and Web Hooks

About Cello – Plug & Play Integration

Cello Benefits
SaaS Life Cycle SaaS Management Solution
Solution
Scalable and Profitable SaaS Business

Cello - Awards & Accolades

Summary
SaaS – Critical to get more customers
Do not ignore “Selling” and “Servicing” related needs
Monetization tools required for more “selling”
Customer Service capabilities for efficient operations
Product engineering features for a scalable and secure product
SaaS Life Cycle Management Solution – way to go

Contact Us
Web : http://www.techcello.com
General Enquiry : info@techcello.com
Support Enquiry : support@techcello.com
Sales Queries: sales@techcello.com

Building a scalable and profitable saa s business model

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