Software Pulse

Business Strategy for Software Executives

June 23, 2008

Javier Rojas and Maximilian Bleyleben

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.


Get the Context: Browse with RoamAbout

RoamAbout from Vysr is a free browser extension that puts contextual information, services and address books at your fingertips while browsing on the Web. The new business pack version of RoamAbout allows you to look up relevant current news or Wikipedia entries, share content with people in your address book, get stock quotes for any keyword or phrase you find on a Web page, and more. All the contextual information is delivered without having to leave the page you’re viewing. A 3-min screencast tour of RoamAbout can be seen here and the free browser extension can be added to your browser at the Vysr Web site,

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 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 pricing blog and learn more at the 2008 Software Pricing Workshop in Boston, Mass. in July.

Publish Your Perspective! wants your opinions. Send your thoughts on the enterprise software industry to editor, Maryann Jones Thompson ( 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 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?
Take our Pulse Poll >>

Last week, readers gave us their opinion on built-to-be-bought startups.
Give us your opinion and see the results >>

More at

Microsoft’s “Golden Age” – going, going, gone?
Read the most important enterprise software industry news of the week >>

Optaros received $12 million.
Monitor the latest software venture capital deals >>

SAP bought Visiprise.
Size up last week's software M&A deals >>

Qualys named Alex Pinchev to its Board of Directors.
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 site.

Parting Thought

“Logic will get you from A to B. Imagination will take you everywhere.”
—Albert Einstein

Courtesy of Malcolm Kusher, The Kushner Group



The Aladdin HASP family of software DRM products is the #1 choice of software publishers worldwide. HASP provides software developers with strong software protection, licensing and distribution solutions to prevent software piracy and increase revenues.
Find out more.


Software Pulse is a publication of, the online resource for software business strategy.

To subscribe,
click here.

To unsubscribe, see the bottom of this email.

Send us your feedback,
click here. 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.

To remove yourself from this list, click here.