SIIA Member Interview: Cloud Strategies

I recently had a chance to sit down with new SIIA member Cloud Strategies. Cloud Strategies is an advisory firm for SaaS companies. I spoke to their managing director, Dave Key. Read my interview below.

Rhianna: Tell me a little about Cloud Strategies and what makes you unique.

Dave: Cloud Strategies provides strategic advisory and SaaS execution assistance services to SaaS companies.  We offer assessments and guidance to ISVs moving to SaaS, to new SaaS companies, and technology suppliers to the SaaS marketplace.  Cloud Strategies’ expertize include SaaS and mobile product definition, SaaS Software Development, SaaS sales, marketing and partnering strategies, SaaS Services strategies, and financial and capital models and strategic planning.

Services include providing assessments of current plans and assistance focused on the SaaS and mobile technology, partnering, sales and marketing, and financial modeling.   Cloud Strategies is unique particularly in the depth of expertise in areas of technology and financial aspects of implementing a successful SaaS business model.

Rhianna: SaaS has been around quite a while now, so why are companies still hesitant to transition to SaaS?

Dave: The market’s demand for SaaS continues to increase rapidly. Virtually all the new growth in software is in SaaS often in conjunction with, Big Data and mobile applications.  The SaaS market had its roots in areas like CRM (think Salesforce) and productivity applications (think Dropbox).  It had its greatest initial adoption in the SMB markets in a subset of verticals.  Concerns about Cloud security and reliability have diminished with the maturation of SaaS offerings and increasing experience with successful SaaS implementations.  SaaS adoption is particularly accelerating in larger enterprises and to a greater number of vertical markets that were initially reluctant to embrace the transition to the cloud (such as medical and financial markets).

Like prior transitions from mainframe software to client/server, and then to Internet software, the market transition came slowly and then accelerated rapidly.  Those that lag the market in the transition will ultimately lose market share and company valuation, while those that embrace the market change thrive.   We can see this play out with the SaaS leaders such as Salesforce, NetSuite, and Workday all with annual growth rates between 20% and 200% and market valuations from 8x to 27x of revenue.

The good news for ISVs is that more and more companies are embracing the transition to the Cloud.  The bad news is that enterprises and world-wide government regulations are becoming more demanding of their set of standards SaaS companies must adhere to.  SaaS companies need expert guidance to successfully address these new challenges in providing a SaaS solution as well as determining the optimal strategy for transitioning all or part of their current on-premise software solutions to SaaS.

Most software company executives understand the benefits of SaaS, but have difficult transitions in their technology, channels, and financial structure.  Cloud Strategies can help in the strategies and implementation of this transition.

Rhianna: I saw a recent blog post you did on software development. How is software development different for SaaS companies?

Dave: The SaaS technology transition complexity varies greatly from one company to another.  Some companies have 20 year old client/server technology which ultimately will require substantial architectural changes to meet the requirements of today’s enterprise.   Other companies may have more modern web based n-tier applications which can be more readily adapted to support SaaS efficiently.  Most any legacy software can be hosted using VDI (Virtual Desktop Interface)– using a MSP (Managed Service Provider) model with modest changes to support monitoring, provisioning, and billing.  This will allow the ISV to begin to provide hosted, subscription based services to their clients allowing them to test the market and develop their SaaS sales, marketing, and partnering strengths.

A true SaaS implementation should be developed to provide the modern user experience (UX), operational efficiency, and reliability of a world-class SaaS model.  This is very often done in conjunction with the need to address other major business drivers including providing a model platform to support the “Bring Your Own Device”, Big Data, Social and Analytics support, and meet the rapidly changing and fragmented regulatory compliance requirements.  SaaS companies will have to ensure that their products meet rapidly changing Security, Privacy, and Data Governance requirements mandated by the enterprises and governments throughout the area where their products are used.

On-premise software vendors should start with an adaption of their current software for SaaS deployment and quickly transition to a Cloud optimized SaaS suite.  Cloud Strategies can help map out and assist in the implementation of these product strategies.

Rhianna: What would you say are the top three areas that companies need to focus on to create a successful SaaS business?

Dave: SaaS companies need to get three things right: their product, their SaaS sales and marketing strategy, and their financial model – all are significantly different with SaaS than for on-premise software businesses.

The product must delight the user, provide significant competitive advantages, and be compliant with the governmental and IT requirements.  It must provide superior user experience, accessible by the device of the user’s choice, and leverage modern big data and analytics capabilities while providing excellent availability, security, and integration with other software and external information sources.

The sales and marketing strategy must embrace the subscription model where the customer needs to be sold “every day”.  That means a focus on push marketing to educate the market on the project capabilities, a “land and expand” philosophy of starting small and expanding, and a heightened focus on customer success both to reduce attrition and to maximize the ability to upsell and cross-sell to a delighted customer base.  Sales compensation and partnering strategies also need to change to adapt to the cloud sales model.

The financial strategy for a SaaS company building a reoccurring revenue stream is completely different from an on-premise product, particularly with respect to cash flows.  It is important to generate well-designed models that account for the heavier upfront sales and marketing costs with delayed cash flows generated by the subscription model.  This impacts how sales contracts are created to maximize the vendor’s cash flow, and structuring sales costs to consider the deferred revenue.  Once the SaaS “flywheel” of reoccurring revenue gets up to speed, SaaS organizations can have very attractive cash flows and outstanding company valuations.  It is essential, particularly for companies transitioning from a “software sale” model to have realistic financials models to ensure that there is adequate working capital to successful execute the SaaS model.

Top 10 Reasons Why You Should Join us at All About the Cloud 2013

Here are our top 10 reasons you should register now to join us at All About the Cloud, May 7-9, San Francisco.

10. Your job’s on the line: Your customer or CEO is speaking… can you afford NOT to show your support?!

9. Luxury Suite Giveaway: How would you like to win a luxury suite at a Major League baseball game to entertain your top prospects/customers? This is a raffle not worth missing!

8. Location: Downtown San Francisco. Need I say anything more?

7. Analyst Knock-down: The discussion is bound to get provocative when four of our industry’s most-regarded analysts get together to opine on what’s next for the cloud.

6. Next Generation: Speaking of what’s next, I know you’ll enjoy meeting the ten early-stage companies selected to present during this year’s Next Generation program.

5. Who Wants to be a Cloud Geek: Test your knowledge of the industry, brainstorm with your colleagues, and cheer on your favorite contestant. You won’t want to miss our second annual game show!

4. Networking…networking…networking: A Speed Networking session, our Welcome Reception, an Offsite Networking Extravaganza that’s always the topic of next-day water cooler conversation, meals, and networking breaks. (SIIA members take advantage of additional networking events!)

3. CODiE Awards Presentations: Prepare to collect your award, or to congratulate your partner, as we announce the companies selected as having the year’s best products and services from 25 business software categories.

2. International Announcement: Be on hand for a special announcement by SIIA and “a secret partner” on a new initiative for cloud innovation! What could it be?????

1. Sessions: A robust conference agenda features breakout tracks designed for members of your leadership team responsible for growth opportunities: CEOs, CMOs and other senior marketing executives, and your top business development executives.

Register now and join me in SF! If you’re not from the local area, book your hotel room before our block expires and make your travel arrangements now as there are lots of great direct flight options from the east coast to SFO.

AATC Speaker Profile: Rick Nucci, General Manager, Dell Boomi

SIIA AATC Speaker Profile

Name: Rick Nucci
Title: Founder & General Manager
Company: Dell Boomi

 

Bio: Rick Nucci is the Founder and General Manager of Dell Boomi where he is responsible for all operations and strategic direction. He has led the company’s successful transformation from a traditional software product company to a leading infrastructure provider in the SaaS and cloud computing industry. In his role at Dell Boomi, Rick is constantly engaged with customers and partners to ensure alignment between business needs and Dell Boomi’s strategy and operations.

Rick frequently speaks at industry and business events nationwide including Gartner AADI, Dreamforce, Cloud Expo and All About the Cloud.

Home town: Lebanon, PA

First job: DJ

What are you currently reading? Beezus and Ramona, and TechCrunch

All-time favorite music: Vanilla Ice (duh)

What is the best meal you have had recently?  Miso Cod at Ozumo

What is your next (dream) career?  Something combining music and technology…

Hobbies:  Music (attending live shows, etc.), travel

What do you think is the hot button issue for the software & services industry in 2013?  Big Data, Mobile, Social, and Cloud are top of mind for our industry.  Cloud is seeing continued and aggressive growth which is driving new levels of agility for enterprises of all sizes.

What are you looking forward to most at AATC? Networking with other ISV executives to understand best practices around sales, go-to-market, and product.

Why is your company a member of SIIA?  The connections we have made at SIIA have proven very valuable to both our BD efforts as well as helping us to learn and share with industry peers.

Webinar: The Data Center of Tomorrow

In partnership with CloudNOW, the SIIA and CloudNOW webinar series features thought leadership and best practices from some of the greatest minds in the industry.

Webinar Description
Software Defined Network introduces a new breed of computer network that exists only as software so that you can control it independently of the physical switches and routers running beneath it. Apart from hardware independence, SDN promises better scale and provides a single point of control for all network policy. With the network being virtualized, it now becomes possible to deliver a data center that can be delivered as a service. The control and management of the data center can by automated by software. In this talk we discuss the current developments in software defined networks and software defined data centers, what users can achieve today and identify challenges that they may face.

Featured Presenters:
Seema Jethani
Director of Product Management, EnStratus

Vanessa Alvarez
Cloud Thought Leader & Director of Product Marketing, Gridstore

Executive Profile: Feyzi Fatehi, Chief Executive Officer, Corent Technology

SIIA Software Division Executive Profile

 

  Name: Feyzi Fatehi
Title: CEO
Company: Corent Technology, Inc.

 

Bio:
Feyzi Fatehi is a Silicon Valley veteran with 25 years of leadership experience building high performance teams at HP and multiple software start-ups that commanded more than $1 billion in valuation. He has been a speaker at Harvard Business School, Wharton, Stanford, Pepperdine and UCLA Anderson School of Management. Feyzi is a member of the IBM Partner Advisory Council, as well as the UC Irvine Chief Executive Roundtable and serves as the chairman of the Technology Council of Southern California/ Orange County. He has a BS in Solar Engineering, an MS in Software Architecture and an MBA in International Management.

Home town: Laguna Niguel, California

First job:  Software Engineer at HP Cupertino, as a member of the small and elite team that invented the first ever commercial Real-Time Database, the HP Real-Time Database.
What are you currently reading?  Aleph; by Paulo Coelho, Mojo, by Marshall Goldsmith

All-time favorite music:  Imagine, John Lennon

What is the best meal you have had recently? Eggplant Parmesan, at Mama Cella’s Italian Kitchen, Rancho Bernardo, San Diego

What is your next (dream) career? Anything that would push me beyond my comfort zone, and would allow me to learn as well as contribute, while having the privilege of working with genuine, driven, energetic, visionary, and innovative people.

Hobbies: Reading, movies, golf, ski, ocean … and spending quality time with my family and good friends.

What do you think is the hot button issue for the software & services industry going into 2013? Recognizing that the “Cloud” is much more than just a set of virtualized systems hosted by third parties, and start looking at the next gen software platforms that help deliver the promises of the “Cloud” such as tangible and timely benefits that would accelerate and amplify SaaS success.

Why is your company a member of SIIA? The high quality of member companies, a first-class management, and the top SIIA industry events and programs.

Interview with New Member: Argos Software

SIIA recently welcomed Argos Software to the membership. I had a chance to sit down with their CEO, Lee Anne Mulvehill, to learn more about the company, their solutions, and vision for the next 18 months.

Rhianna: Welcome to SIIA! Tell us a little about Argos Software and what makes your solutions unique.

Lee Anne: From our start in 1979, Argos Software has focused on developing specialized business software for the agri-business, supply chain and logistics industries. In addition, we offer a variety of services that help our customers succeed in their planning, implementation, and on-going training activities.

Rhianna: Why is it important that each implementation be customized for the customer?

Lee Anne: Each implementation is designed around the customer’s requirements as no two businesses are alike! Our network engineers work with our customers to specify their network requirements. We want to be sure that their infrastructure will properly support the software. Then, we conduct an “implementation planning workshop” that will begin to configure the system to meet the customer’s business processes, to train the administrator on the system features of the system, to define the data conversion requirements, and to train the trainer. We work with the customer’s administrator and staff on implementing each of the functional areas. The implementation process is tailored to the customers’ requirements and staff. Our goal is our customers’ success with the right balance of on-site and web training sessions.

Rhianna: You partner with a number of top provides. How important is that partner ecosystem to your business?

Lee Anne: Our partners are critical to our success. Without their development efforts and technical support, our own products cannot grow to meet the ever-changing demands of our user partners. We are reliant on our supply side partners to ensure we can provide a modern and robust infrastructure and foundation for our suite of applications. We rely to a large extent on our user partners to provide the roadmap for our own development efforts. In today’s ‘flat world’, partner ecosystems are vital.

Rhianna: How does Argos keep their customers up-to-date on upgrades and the latest enhancements of your software?

Lee Anne: Our ABECAS Insight Subscription Service provides both on-going support by our technical team as well as updates to the software. A new version of our software is released about every 4 months and is available to all subscribers. The Version number that customers are currently working with can be seen by clicking ‘about’ on the ABECAS Insight menu. When a system is first installed and changes are required in the software during the implementation process, we generally provide our development version so that updates can be installed as needed. Our technical team works with customers all the way!

Rhianna: What do you think will be the next major advancement in supply chain management systems in the next 12-18 months?

Lee Anne: To date, SCMS has focused on operational efficiency, but with an ever increasing demand for visibility, both upstream and downstream, we will see systems to systems communication and visibility tools (and mobility) growing in importance. Summary data provided by dashboards, accessible from mobile computers will be high on the selection criteria for next year’s buyer, as will automation of exception alerts triggered for suppliers and customers.

 


Rhianna Collier is VP for the Software Division at SIIA.

All About the Cloud Program Committee: Russell Hertzberg, SoftServe

I recently sat down with AATC Platinum Sponsor and Program Committee member Russell Hertzberg, Vice President Technology Solutions for SoftServe, Inc. to discuss AATC 2013, their goals for the conference and what we hope to see from the program and our industry in the coming year.


Russell Hertberg
Vice President Technology Solutions, SoftServe

Rhianna:Why was it important to you to be a part of the AATC Program Committee?

Russ: Being a part of the Program Committee helps SoftServe give input into the shape, structure, and content of the event agenda, while staying abreast of the latest developments with respect to the event plan.

Rhianna: What are your goals for the conference this year?

Russ: As always, to get some strong new ISV leads, or to further nurture existing prospects. We do this through networking, speaker presentations, and the sponsorship.

Rhianna: What is unique about AATC that makes it so valuable to ISVs?

Russ: AATC is the premier event for ISVs who are just entering or already leading in various segments of the Cloud Computing market. This event has it all: thought leaders, great panels, practical education, and how to content.

Rhianna: What are some of the topics you are excited to see in the program this year?

Russ: Mobile + cloud monetization strategies, the evolution of PaaS technology, a report card on Azure, and the role that Big Data platforms are playing in various SaaS offerings.

Rhianna: What are your industry predictions for what’s in store for 2013-2014?

Russ: 1. SaaS. Large ISVs are in an adaptive race to both build and buy SaaS capability. In this race, the course of 2013 will show increasing gaps between executing leaders and confused or denying followers. This race is the single most important determinant of the future value of the 100 largest ISV providers. The leaders will not simply make more SaaS acquisitions. They will also create hybrid solutions for current install bases. They will deliver new SaaS offerings in the SMB market by refactoring current on-premises technology. And they will adapt channel, sales and marketing models to the economics of the SaaS business.

2. DevOps. Cloud computing is changing the skill set and composition requirements of technical teams. Designing and developing software is now the front end for the long-run challenge: service delivery management and continuous application enhancement. Development operations (DevOps) are one of the critical disciplines for the new technical team. The skill set of a DevOps tech lead includes systems programming, build management, configurations management, service monitoring, security, backup, recovery and more. Over time, the technical team composition for a large SaaS deployment will trend towards an equal number of software engineers and DevOps engineers.

3. PaaS. PaaS remains a clever software technology for rapid application development or refactoring rather than a specific market. Small PaaS players can survive by deploying their technology primarily to create conventional and nimble SaaS solutions in established markets. PaaS technology will be combined with Big Data platforms to create new services and sites in several business and consumer markets.

4. Health Information Exchanges. The firmer establishment and acceptance of The Patient Protection and Affordable Care Act of 2009 (“Obamacare”) resulting from the re-election of Obama is driving acceleration in construction and deployment of Healthcare Information Exchanges and Health Insurance Exchanges. HIE construction and operation is attracting large hardware/software providers and major systems integrators. The cloud-based security and data integration requirements for HIEs will introduce new software and security technology like JSON and Oauth into the healthcare IT market. Other industry-specific community clouds may begin to develop in public education, finance, retail and manufacturing.

5. Social media. The technology behind the massive horizontal scalability of major social and search platforms is driving into the smaller-scale footprints of independent colocation facilities, hosters, ISPs, and enterprise data centers. Enterprises will refactor and redeploy more and more applications into hybrid and private cloud deployments, taking advantage of virtualization, multi-tenancy and horizontal scalability to become more competitive with public cloud-computing metrics and price points.

6. Mobile. Scalable back-end cloud services continue to be the anchor for mobile business and consumer applications. Mobility and cloud computing enjoy a virtuous synergy that can be seen in the rich native mobile applications for popular social networks, the hugely successful online store models for application purchase and delivery from Google/Apple/Amazon, and the overall growth in mobile device traffic on popular cloud-based sites and services.