SaaS MARKET REPORT
“The continued rise of the integrated enterprise is fuelling a new trend where we see customers no longer
selecting a product, they choose an ecosystem.” Renat Zubairov, CEO and co-founder - elastic.io
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feedback applications,
commented;
“As market demand for SaaS
grows, while pro t margins
become razor-thin, channel
partners need new ways to
extend their value propositions
and generate new sources of
recurring revenue. is will
increase the value they are
delivering and receiving from
new and existing customers.
According to Barracuda
MSP Research, 64% of channel
partners say services sold on a
recurring revenue basis are their
best growth drivers.
SaaS vendors with easy
subscription based models that
enable partners to generate easy
subscription revenue as a valueadd
to existing solutions will be
placed to retain their partners.
is all needs to be wrapped with
best-in-class customer service that
goes beyond vendor/customer, to
a true partner relationship.”
Carl Boraman, Director of
Strategic Alliances at Tollring
says:
It is clear that SaaS o ers new
opportunities to the channel,
and that a SaaS delivered
solution with a xed monthly
cost is often more appealing to
the end customer. Common
characteristics like a lack of
upfront investment are typical,
but there is still di erentiation to
be found in ease of deployment
and use, feature sets, and whether
there are “freemium” options
that allow customers to trial the
solution before they buy without
the normal investment cost,
commitment and risk.
Given the number of choices
available to users for any
cloud-based business
process application are
customers getting harder to
fi nd and putting pressure on
profi tability?
Renat Zubairov at elastic.io
notes that nding customers in a
crowded marketplace is always a
challenge, but then they need to
be retained – and it is also getting
harder to do that.
“ ese are direct implications
of the ‘as-a-service’ business
model and the subscription
economy that it has brought
in. Not only does the provider
need to secure customers in the
rst place, it needs to keep those
customers over the long term to
maximise revenue and pro t.
As a result, SaaS companies
are searching for ways to make
their product ‘stickier’ with
customers, decreasing customer
churn to secure more revenue
over an extended period,
and reducing the burden of
integration with an ever-growing
range of applications.
An integration platform as a
service (iPaaS) allows software
vendors to achieve exactly
that. By building universal
integration capability into their
own application, ISVs can o er
a new kind of one-size ts all
model for the subscription
economy – at the same time,
saving on development costs
and still delivering the most
comprehensive, premium value
product possible.”
Graham Wilkinson at Beyond
Connectivity says he does not
think customers are harder to
nd as there is still a huge market
to go after.
“It’s not a saturated market
by any means. Yes, the choice
is huge and it’s getting bigger
everyday with the speed of new
applications coming out but
crucially we haven’t reached
the stage where it’s a race to the
bottom. In time that will come
which will trigger amalgamations
and company buy-outs. It is likely
to follow a similar pathway to the
hosted PBX sector.”
Carl Boraman at Tollring
says SaaS vendorsin the IT and
telecoms market have a number
of new and speci c challenges.
“For a small start-up, the
commercial investment and time
to revenue is long and protracted.
ese companies have to give a
lot away for very little money for
quite some time before they start
to even begin billing, let alone
hit pro tability. ere is also a
perception the price point for
SaaS-based products needs to be
signi cantly lower than the onpremise
equivalent. ese factors
alone are likely to bankrupt them
before their products see the light
of day.
For established software
vendors things are a little easier.
If they are introducing the SaaS
version of their existing software,
they can dual run for some time
and bene t from a gentle switch
over within existing channels. It’s
important to note that SaaS isn’t
about stopping one thing and
swapping immediately to another,
it’s about managed transitions
Carl Boraman at Tollring
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