Business Strategy for Software Executives

January 28, 2008

Re-learning Marketing for the SaaS Model

Running an on-demand business means software CEOs must understand and embrace the differences between the traditional and SaaS models – especially in sales and marketing.

By Steve Adams, Sabrix

Entrepreneurs, investors, and industry pundits continue to examine how the emergence of SaaS has altered the dynamics of everything from go-to-market strategies to technology hurdles to budget management and market valuations--all leading to dramatically different operating and financing strategies.

The challenge of understanding and managing the key differences in the two business models is nowhere more profound than for the CEO who has spent his or her career in traditional on-premise, perpetual license businesses and is launching a SaaS company or the CEO who has a going concern in traditional enterprise software and is considering a transition to or the addition of a SaaS offering.

Regardless of whether an executive team is going to launch a SaaS company, transition to a SaaS model, or attempt the high risk maneuver of managing a hybrid model (a challenge considered by many to be a fast path to operational and financial suicide), executive teams must quickly grasp the key differences in the two business models and make unequivocal decisions if they hope to grow their companies, to finance their growth, and to return shareholder value.

New on SandHill.com: Topics Pages

Need a one-stop destination for all of the insight SandHill.com has on SaaS? Open source? Offshoring? M&A? Now you can access all of SandHill.com’s opeds, blog posts, news and events on each of these hot topics on our new “Topics” pages. Simply click “Topics” on the top navigation bar on www.SandHill.com and you’ll receive a drop-down menu of all current Topics pages. Email us with feedback on this new feature and with ideas for additional Topics pages.

Enabling Innovation – the Open Source Way

Enterprise adoption of open source software has become mainstream. Rajeev Pradhan of Cognizant Technology Solutions runs through several aspects of open source deployment that businesses must consider in this week’s post to the SandHill.com Blog, “Enabling Innovation.”

The “Dos” and “Don’ts” of Divestiture

In the consolidation crazy software industry, divestitures continue to be a healthy way restructure or raise capital. But Helene Abrams of eprentise says the divestiture process can be dangerous if too much information is disclosed. Read her tips about handling data during a divestiture in this week’s post to the SandHill.com blog on software finance.

Publish Your Perspective!

SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (maryann@sandhill.com) and have your opinions published on our site.

Virtualization 2.0 Companies:
Apply Today for the Software 2008 Innovation Showcase

We are seeking companies leading the next wave of desktop and server virtualization to speak at the Innovation Showcase at Software 2008. The program selects only the most promising vendors to present at the conference: in the 18 months since Software 2006, 12 of 20 Innovation Showcase companies have experienced a major financial event – including two IPOs from 2007’s class.

Innovation Showcase companies will receive a variety of PR and marketing opportunities at Software 2008 – the most influential gathering of enterprise software executives and investors of the year. Apply for the Innovation Showcase today at: http://www.software2008.com/showcase/

DON’T MISS: Harnessing the Power of Informal Employee Networks

Formalizing a company's ad hoc peer groups can spur collaboration and unlock value. Uncover strategies for success in this article from The McKinsey Quarterly. Read how in this article from The McKinsey Quarterly.

News Update: New Kids on the Block

Software’s parents show off their new kids – Atlantic, Bluehouse, MozyEnterprise and LoopFuse; mixed earnings in a crazy market, Microsoft moves closer to Citrix and Gates pledges big at Davos. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.

Poll: Success with Multiple Models?

Can software companies thrive with more than one business model? Or must vendors choose a single path to success?
Take our Pulse Poll >>

Last week, readers estimated what portion of their company’s software usage is unlicensed.
Give us your opinion and see the results >>

More at SandHill.com:

Demo starts today in Palm Springs.
Read the most important enterprise software industry news of the week >>

Master data platform management maker, Siperian, received $25 million.
Monitor the latest software venture capital deals >>

IBM bought AptSoft; HP got Exstream Software.
Size up last week's software M&A deals >>

Web infrastructure management vendor, Hyperic, named Dick Williams as chairman of the board.
See who's made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the SandHill.com site.

Parting Thought

“In our factory, we make lipstick. In our advertising, we sell hope”
–Charles Revlon

Courtesy of Malcolm Kusher, The Kushner Group

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SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.