RESEARCH FROM ENTERPRISE VALUE INTEGRATION SHEDS LIGHT ON CLOUD COMPUTING MODELS
There are a number of constraints and expectations that have come to be associated with Software-as-a-Service (SaaS) companies. Less than successful start-ups have a difficult time gaining market traction because they fail to develop a brand promise, or focus on such a small problem that enterprises do not see the value in adopting and integrating their technology. Most SaaS brands do have a period of free trial, but users need to rapidly see greater benefits than adoption costs for the application to gain traction. Account executives, sales engineers, and support staff can intervene and enable prospects to subscribe. Monthly recurring revenue is the ideal, but it is not unusual for customers to discontinue service. This translates into “churn,” which is makes the business unsustainable. Their positioning, lead generation initiatives, and market budget cannot generate enough prospects to make up for the customers who fall away.
BAD CHURN
The first graph illustrates only about half of the January cohort remains in December as a result of a 5% loss of customers each month — the definition of churn (which is bad).
GOOD CHURN
“Negative churn” is a good thing. The graph right shows 5% more business is generated from each customer. Retention of customers combined with upselling of additional services are critical to creating this growth pattern.
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Successful SaaS brands deliver faster time-to-value. SaaS business models encourage partnerships between the buyer and seller, assuring that the product delivers consistent value over time. Integrating a SaaS product with other software is part of the process of delivering value. That alone can get in the way of customer success. It is the responsibility of the sales rep to ask the right questions. Prospects don’t know your product like the vendor’s team, which might include the AE, customer success representative, sales engineer, and solutions architect. The SaaS team must learn about the problem needing to be solved, as well as the context of the solution in advance of a deployment. For self-service models, SaaS vendors have a responsibility to provide a knowledge base, community forum, and some support to solve real-world issues that arise. The report provides many actionable insights for branding, marketing, and sales professionals.
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The parent company of EVI has partnerships with leading cloud computing vendors, including big data analytics, databases, storage, and sales management technology. Software-as-a-Service (SaaS) is the most common business model of the partners.
EVI is organizer for the largest independent Meetup group of Cloud Computing developers in the SF Bay Area, with around 4,000 members. Participating companies are leaders in customer resource management, big data analytics, and more.