Business Strategy for Software Executives
June 23, 2008
Building a Recurring Revenue Business
Converting from licenses to a SaaS model can be lucrative for software vendors. Here are several tips to make a successful transition.
By Javier Rojas and Maximilian Bleyleben, Kennet Partners
The founders of many software companies want to make the transition to becoming a SaaS vendor. The operational challenges of making this shift are significant, impacting every part of the company: technology, sales, services and pricing. Not least, the transition can have a dramatic impact on cash collection which, if not managed appropriately, can sink the business.
We have worked with a number of software vendors that have made the transition to SaaS and have found some useful lessons to insure success. In several cases we have been able to complete the shift fairly quickly, migrating to a recurring revenue model for the majority of the business in as little as two quarters. Below are some key lessons learned that have worked well for these companies.
Finished but Not Done
Too often, enterprise applications are considered “done” when the implementation is complete. Helene Abrams of eprentise says there are several additional steps needed to ensure that the system can respond to business change with appropriate agility. Read what’s needed in this post to the SandHill.com Blog on customer perspectives.
The Power of Mentors
The press loves to place successful entrepreneurs on a pedestal. But Jon Fisher says the truth is that a great founder is surrounded by a team of savvy influencers. Read more about the importance of the network in this post to Jon’s new blog, Strategic Entrepreneurism.
Think Twice Before You Re-Price - Part 2
Too often, software vendors rely on raising prices to increase cash flow. Jim Geisman of MarketShare says there are better ways to improve a company’s financial position. Read more ideas in Part 2 of this article posted to the SandHill.com pricing blog and learn more at the 2008 Software Pricing Workshop in Boston, Mass. in July.
Publish Your Perspective!
SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (email@example.com) and have your opinions published on our site.
Managing IT to Support Rapid Growth
To keep pace with a rapidly growing company, CIO Marina Levinson must choose her priorities carefully. Read the interview with NetApp’s executive on her tips for driving growth in this article from The McKinsey Quarterly.
News Update: On Fire
Mozilla aims for a world record; plus, Google apps floundered, NavReady unveiled, SpectraWatt launched, DB2 won’t open and KVM trumps Xen. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.
Poll: Too Late for SaaS?
Is it still possible for traditional license software companies to successfully transition to SaaS or is it too late?
Last week, readers gave us their opinion on built-to-be-bought startups.
More at SandHill.com:
Microsoft’s “Golden Age” – going, going, gone?
Optaros received $12 million.
SAP bought Visiprise.
Qualys named Alex Pinchev to its Board of Directors.
Send us your feedback on this newsletter and the SandHill.com site.
“Logic will get you from A to B. Imagination will take you everywhere.”
Courtesy of Malcolm Kusher, The Kushner Group
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