Saugatuck Technology Releases SaaS 'Cookbook' for ISVs

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Leading Research Consultancy Assembles Key SaaS Business Guidance for ISVs and Channel Partners

The IT vendors hardest-hit in the current economic environment include ISVs and software channel partners who must adapt quickly and efficiently to shifting user demands and abilities to buy IT, while managing to stay in business. These vendors see SaaS as a means to adapt and even expand their business.

However, most such companies have little practical knowledge of the business of SaaS, and what it takes to transform from being product-based software vendors to service-based firms with vastly different models for managing sales, revenue, development, and channels.

Released on December 29, 2008, "Transition to SaaS: A Cookbook" is a new report from Saugatuck for ISVs considering or making the move to SaaS, whether as an adjunct or primary line of business. Incorporating Saugatuck's market-leading SaaS research, the report is based on briefings and interviews with dozens of leading and emerging SaaS providers, ISVs, VARs, and systems integrators, as well as key lessons from the firm's work with the top business software vendors in the world. The resulting report is 32 pages of practical, pragmatic advice and guidance built on a foundation of real-world best and worst practices.

Key issues addressed in this report include the following:

  • What business and organizational areas are impacted when an ISV transitions to a SaaS offering?
  • What are the factors to consider when contemplating development of a multi-tenant offering?
  • What are the key technical factors that constitute the overall SaaS offering?
  • How can ISVs identify and evaluate pieces of the SaaS offering for potential partners?

"Top executives within most ISVs are great at managing a software business, but they often could use some objective guidance in moving to such a new and potentially challenging business as SaaS," explains Saugatuck Vice President Charlie Burns, who led development and production of the SaaS Cookbook. "What most ISVs need is an effective roadmap to follow as they 'SaaS-ify' their core business models and their business relationships - not just their offerings, their code, or their technologies. And that's where this research will be the most help."

Some key research highlights from this report include the following:

  • The cultural aspect of transitioning to a service company may be the single largest hurdle for a traditional ISV to overcome - rather than business model or technology (re)architecture.
  • The most successful ISVs transitioning to SaaS are those that identify a new or adjacent business opportunity - rather than replicating traditional on-premise offerings.
  • Don't forget about the IT infrastructure; it is a key means by which you can continuously lower your per-units costs and increase customer value.
  • Focus on keeping your customers happy and continuously measure your success. Renewals are the lifeline to long-term growth and profitability. Quality of service and service improvement as well as investing in continuous innovation, are critically important.
  • Pick your battles - in terms of what you need to own or control, and what you can rely on 3rd parties to help support the business.

This is the fifth major SaaS research study to be released by Saugatuck since 2006. Previous studies include the following:

  • Different Wavelengths: SMBs, Change, and SaaS Adoption (SSR-510, 09-30-08, 22 pages)

Software-as-a-Service (SaaS) is often touted by SaaS providers and others as a key competitive advantage for small and mid-sized businesses (SMBs) worldwide. Unfortunately, SaaS providers' approaches and offerings too often fail to resonate with SMB executives. Providers tend to focus on business advantages more germane to larger firms; or they fail to perceive important differences in SaaS awareness and buying based on key sub-categories of SMB. Saugatuck's new study of SMB SaaS acquisition, adoption, and management focuses on the business and technological challenges that are unique to smaller firms, and how these translate to business value for SMBs and for SaaS providers.

  • Enterprise Ready, or Not - SaaS Enters the Mainstream (SSR-460, 07-10-08, 42 pages)

The explosive growth of software-as-a-service (SaaS) may be netted down to two core realities that will shape SaaS markets for years to come:

  • Users want SaaS throughout the enterprise, whether their enterprises are ready for it or not; and
  • SaaS is spreading throughout the enterprise, whether the vendors - or their offerings - are ready to support and deliver what users want, or not.

These are two key conclusions that Saugatuck Technology Inc. examines in its 2008 research study on SaaS, titled "Enterprise-ready Or Not: SaaS Enters the Mainstream." This 42-page study details the disruptive evolution, status, and future of SaaS within user enterprises, from basic applications to cloud-based computing - including the effects of these changes on vendor strategies, offerings, and business models.

  • Three Waves of Change: SaaS Beyond the Tipping Point (SSR-342, 05-03-07, 34 pages)

In the span of less than a year, Software-as-a-Service (SaaS) went from point-solution curiosity to mission-critical applications for user enterprises. And according to Saugatuck Technology, the next wave of SaaS is already being absorbed and adopted by user enterprises as platforms for multiple, critical business applications and processes.

  • SaaS 2.0: Software-as-a-Service as Next-Gen Business Platform (SSR-239, 04-26-06, 34 pages)

Software-as-a-Service (SaaS) is one of the most compelling and challenging IT and business innovations of the past two decades. Not surprisingly, SaaS is generating tremendous interest, heated debate, and a broad spectrum of opinion. Saugatuck's 2006 SaaS Strategic Research Report shows that SaaS is at a fundamental "tipping point" between the current generation of software functionality delivered as a service (what Saugatuck calls SaaS 1.0), and the emerging generation of blended software, infrastructure, and business services arrayed across multiple usage and delivery platforms and business models (what Saugatuck calls SaaS 2.0).

About Saugatuck Technology
Saugatuck Technology Inc. provides market strategy consulting and subscription research services to senior executives, information technology vendors, and investors, combining strategy development, business planning, and market intelligence with first-hand research of executive technology buyer trends.

Founded in 1999, Saugatuck is headquartered in Westport, Connecticut (USA), with offices in Silicon Valley and in Germany. For more information, go to http://www.saugatech.com, or call +1.203.454.3900 in the US, or +49.6123.630285 in Germany. To request a briefing with our analysts, contact Chris MacGregor at chris.macgregor@saugatech.com.

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