SaaS, otherwise known as Software as a Service, is a popular business model in which companies host and license their software from a cloud-based server on a subscription basis.

It’s currently in a boom period, but actually dates back to the 1960s. Sixty years ago, very few businesses could afford to buy and maintain computers and servers. Instead, they would connect their monitors to a centralized server where they could subscribe to the services they needed. Now, all users have to do is connect to the internet, open their web browser and then type in the software application’s URL. Upon logging in, they will have full access to all its features and any stored data. No wonder it’s proven so popular.

As SaaS continues to help businesses and individuals work more efficiently, the world has taken notice. By 2022, the SaaS market is expected to reach $164.29 billion, according to Transparency Market Research. Emerging SaaS-funding companies are also indicative of this rapidly growing market. To help underscore the rush, I’ve broken down some of the key innovations that have made SaaS such an attractive option.

Accessibility

Thanks to SaaS’s remote accessibility, you no longer have to purchase an application from a retail store, download it on your electronic device and then install it. With SaaS, you can have full access to the software’s features whenever you want it. Business owners, entrepreneurs and other individuals can easily collaborate through the software and be fully aware of what’s going on. If they have access to the internet, they can get to work.

Up-to-Date Software

Since SaaS providers are the ones maintaining and servicing their software (lest they churn subscribers), users no longer have to worry about keeping their applications up to date. Many software companies would have achieved this previously by releasing new versions of their software, on CD, every year or so. Now, everyone gets their updates at the same time.

Affordability

Although one must be on the lookout for hidden costs when starting a SaaS subscription, you are likely to save money by never having to pay for installation fees or fix bugs. You’re also likely to have more options for the type of features and packages you would sign up for. Upgrades are simple and can be initiated at any time, so you can always make use of them later.

Ease-of-Use

One of the greatest benefits of SaaS is that it’s easy to use. For any SaaS software to be widely adopted, it has to have a short learning curve and a well-designed interface. To be more specific, the interface, features and all other components need to be clearly mapped out for a novice to be able to learn quickly, either by intuition or following clear guides and tutorials. This all stems from the subscription-based model. If a SaaS business wants to keep you as a subscriber, they will have to impress you far quicker than a business selling traditional software packages. – Read more

It’s easy to see why any company or individual would want to use cloud platforms to host their most important files

Why cloud computing strategy is important?

According to Gartner, only two-thirds of enterprises sport a documented cloud strategy, because, for a good many of them, the idea of cloud is still so perplexing.

However, cloud strategy will become the dominant choice for many enterprises in the next decade, and they will move on to refactoring many of their existing applications.

With a cloud strategy, you can be definitive about the outcome of your business goals, but you need to understand the differences faces of cloud computing. Enterprises are slowly migrating from on-premise data centers to the public cloud.

Enterprises have put in a good amount of their total IT spending in public cloud. Public cloud spending today is 5 percent of total IT spending, but it will grow much faster than internal IT spending through 2020, due to new initiatives as well as the migration of existing legacy systems.

A broad range of enterprises is attracted by the benefits extended by cloud computing because when employed in the right manner, the benefits to be reaped are aplenty. Business groups have enjoyed faster time to market, decreased capital expenditure and operational expenditure, better speed and agility and incredible IT deliverance.

Cloud services provide massive transformation and there is a complete paradigm shift from the existing infrastructure and IT strategy to resources provided by the cloud provider.

Organizations often try hard to maximize their already existing infrastructure as they have made significant investments in their datacenter. The idea of buying more hardware to enjoy the benefits of the cloud can be emotionally and physically debilitating for them.

However, the good news is that enterprises can make use of the existing hardware and rebuild their own cloud infrastructure successfully. Even after the migration to the cloud is completed, it is possible for the enterprises to leverage existing computing, storage, networking and virtualization resources

So what should cloud service enterprise CEOs and VPs be aware of when they plan a transition?

Attractive as it may sound, migration to the cloud  It is a massive transformation. In certain cases, the IT team may need to develop additional skills that need to think of “pooled resources” and not just “individual resources”.

1. The percentage of IT budget they can save

The budget is probably the first thing that concerns the stakeholders and the VP of a company. According to a study by Microsoft, only about 11% of a company’s budget is used for developing new applications and much of the budget is allocated for maintaining and updating the infrastructure.

This leaves the enterprise with very little resources for employees, the devices they use, the documents they maintain and so on.

2. Increasing the productivity to an all-time high

For certain jobs, professionals have to work outside their office, on their job sites. They might need instant access to blueprints, documents, files, cost estimates, photos, videos, and similar content.

It is imperative to have cloud-based content management and system, so they can easily access whatever they need through applications on their mobile devices. As long as the employee has access to an internet-connected device, they have access to the files as well. – Read more

Performing a cloud maturity check is important to determining whether your current use of the cloud is truly helping you meet your business goals.

The path to the cloud is a twisting, hairpin-laden road for almost every enterprise. Many were dragged to the cloud by business units charging ahead. Some may have started out with a deliberate strategy, only to see it warp out of shape by new, quickly bolted-on cloud apps procured (officially or unofficially) to support new initiatives and growth demands. But few have true cloud maturity.

Cloud benefits are so compelling that most organizations continue to add applications, by strategic design or force of will, at an alarming pace. The result is often a cloud environment that is not cohesive, efficient, or meeting either the goals of the business or the promise of the technology.

One of the big losers in this haphazard cumulus cloud build up is clear visibility to security controls and practices.

How to perform a cloud maturity check

It’s time to reassess. Whether you are relatively cloud immature or have been in the cloud for years, conducting a cloud maturity and security assessment is an important health check to determining whether your current use of the cloud is truly helping you meet your business goals and whether you are extracting the most out of the features and business advantages from the technologies – while at the same time securing your essential data.

It’s important to determine whether your current cloud solutions or future cloud migration plans are meeting your strategic goals, are well matched against your staff and security tool capabilities (and how to address this if not) and determine the efficacy of your deployment so it can be improved.

Strategic alignment

You likely have specific goals for moving to the cloud (or moving specific functions to the cloud), whether they are clearly articulated or not. Such goals typically include cost savings, faster time to market for a product, meeting rapidly changing customer demands, etc.

If these aren’t clearly delineated, you will want to spell it out so you can map these goals against the results of implemented solutions or future plans.

While this may seem an academic exercise, it is important: as an example, if your goal is cost savings, doing a detailed analysis of moving a deeply embedded legacy application to the cloud may reveal that such a move is in fact costlier than retaining it on-prem.

If you are trying to get to market more quickly but don’t have the skills or tools to support the cloud deployment, you may be defeating the purpose.

For current cloud deployments, how you are working in the cloud may be inefficient, failing to meet the goals you set out to achieve; or you may have neglected to build a proper cultural acceptance of the new cloud paradigm, which may effect success. – Read more

Dive Brief:

• Subscriptions constitute a key monetization strategy for 74% of software vendors, but other models — like usage-based billing or perpetual licensing — are still part of the mix, according to a survey of 321 software vendors from software company Flexera.
• Almost half of decision makers expect their company to expand subscription-based monetization offerings in the next 18 months, compared to just 29% who foresee growth coming from the perpetual license model.
• To meet customer demands, one-third of companies using SaaS as their primary deployment model must still offer and manage perpetual use licenses alongside regular subscription-based offerings, according to the report.

Dive Insight:

The industry uptick in as a service offerings — whether it’s software, infrastructure or platform — lowers barriers of entry for tech adoption.

But across the aisle, on the vendor side, the convenience of having predictable revenue comes at a cost: The complexity of handling multiple offerings in addition to subscription, said Nicole Segerer, director of global enablement at Flexera.

“Software suppliers need to meet their customers’ needs, which often means multiple deployments and monetization strategies,” Segerer said, in an interview with CIO Dive. “While it creates flexibility for the customers, suppliers must manage a lot of complexity in their back-end.”

To manage that complexity, vendors have to step away from running their products in silos, Segerer said, and instead take a holistic approach that lets them centrally manage their products.

Getting a large customer base to move across different monetization schemes represents one way vendors grapple with complexity, according to Bill Ryan, VP and analyst at Gartner, who focuses on sourcing, procurement and vendor management.

“Vendors find themselves trying to find out what mix of ‘carrot’ and ‘stick’ it takes to make that happen,” said Ryan, in an interview with CIO Dive.

A “carrot,” or incentive to migrate, could be a discount to help cover implementation costs. In turn, end-of-support deadlines or a freeze on feature updates can be the “stick” that adds urgency to a migration.

The exploding diversity of use cases across the software industry, boosted by the rise in automation, adds to the complexity on the vendor’s side. – Read more

There are a couple of general rules in life: People like to have choices, and they don’t want to feel pinned down. Just as these rules apply to restaurant menus and lenient retail return policies, they also apply to software. 

When software as a service (SaaS) came onto the scene 20 years ago, people were tired of getting “stuck” with on-premises software due to the prohibitive costs of switching — both in terms of time and money. The cloud-native approach and absence of a 12-month project plan still translates into a lot of benefits for enterprises. Ironically though, getting locked-in with a SaaS vendor is very easy to do these days. It’s within the renewal cycle, however, that enterprises have an unrealized opportunity that CIOs are in the best position to lead.

The Challenges Of Today’s SaaS Renewal Process

Today’s SaaS renewal process is, frankly, all over the place. This shouldn’t come as a surprise since SaaS vendors selling specialized apps like CRM, marketing automation and even cloud storage wherever they could find a foothold. If that foothold was in marketing, customer success, sales or engineering, it only mattered that someone could execute a contract, and if that was done without IT’s knowledge, so be it. Beyond that, many SaaS providers selling apps with wall-to-wall potential have employed tactics like freemium models to land and expand wherever they can.

The renewal process usually begins with the original license owner, the procurement team and the IT team. These groups work together to try to make decisions under a tight deadline. This process is almost always manual (via spreadsheets), and it rarely goes beyond a list of users, their department and the date they last used the app. It also must be repeated for every application purchased by an enterprise, so large companies are always preparing for a renewal discussion involving one vendor or another. In addition, most major vendors will have “true-up” discussions at various stages of a contract, which further exacerbates the problem.

Given that burden, it’s easy to see why CIOs don’t look forward to SaaS renewal cycles or true-up conversations. The work they have to do in advance is time-consuming, and it takes away from what they really want to do: deliver innovative technology to their internal constituents.

The good news is that technology has matured, and new tools are available to help solve these challenges. Many SaaS vendors have, for example, built APIs into their software that — when combined with data from application logins, contract details and other sources — can be used to obtain a real-time picture of the software.

To complement this, here are three tips for IT leaders looking to focus their renewal process on the right outcomes:

1. SaaS Rightsizing: Not Just About Saving Money

At the most simplistic but impactful level, CIOs can drive savings at renewal time when there is a drastic difference between what is being paid for and what is being used. Referred to as “rightsizing,” a company has an opportunity to eliminate or downgrade excessive licenses at renewal time, thereby saving hundreds of thousands of dollars — sometimes even millions — when renewing one application alone. And these savings multiply when repeated for every application that an enterprise has purchased.

However, a bigger opportunity exists. Forward-thinking CIOs want to deliver business value, not just save money. Let’s look at the collaboration category as an example. In many organizations, big bets are being placed on tools like Workplace or Slack to improve the speed of communications and streamline processes. But what happens when both apps are in place and the enterprise needs to make a decision to standardize or allow the apps to coexist? In situations like this, CIOs should ensure these applications have strong business applications and utilize either homegrown or third-party tools to analyze whether or not applications are delivering on expectations. Perhaps the data reveals that consolidating would be good, or perhaps it shows that it would actually hurt the business. Either way, understanding your business and leveraging analytical data are the keys to effective rightsizing.

2. Going Beyond Contract Anniversary Conversations 

For all the qualities enterprises expect from SaaS, it’s surprising how infrequently IT teams engage with SaaS vendors. In some cases, it’s just on the contract anniversary date. CIOs can spearhead change here, but it’s important that they do so with the right information about application usage. Collecting details on how employees are engaging with their application on a regular basis will allow CIOs to have candid conversations with vendors throughout the year.

3. Talking To Your Employees About What Works (And What Doesn’t)

The best CIOs know what makes their employees tick, what drives them nuts and what they want from a SaaS solution. Many famous companies of the last decade are known for being obsessed with their customers — think Amazon, Zoom, Zappos, etc. The modern CIO can apply this same strategy to their company’s employees. The importance of getting to know the organization you serve may sound obvious, but rightsizing and understanding SaaS application data is easier when paired with a first-hand understanding of your team. Most of the leading CIOs I talk with have found ways to ensure their employees have access to them — with a feedback mechanism that goes beyond the traditional quarterly survey that often gets deleted. These CIOs view personal interaction as critical to driving the agenda of their organization. – Read more

We’ve seen it happen across industries and markets: Consumption patterns are shifting away from traditional ownership models and toward subscription “anything-as-a-service” models.

The success of companies such as Netflix, Dollar Shave Club, Uber and Lyft indicates that consumers are increasingly viewing ownership as a burden.

Ride-sharing companies focus on an outcome (get where you’re going), not ownership (no car title required). Their customers may not want to own a car; maybe the price is prohibitive, they don’t want to deal with parking or maintenance, or they don’t drive very much and want a solution that scales.

As it turns out, those same considerations — cost, storage, maintenance, scalability — apply to choosing cybersecurity software as well. Do you want to own, or do you just want an outcome? This analogy is helpful for understanding the differences between security-as-a-service (SECaaS) and traditional, on-premises security software.

How a Security SaaS Solution Can Save You Money

If you’re buying a car, that typically means shelling out a large amount of money now. If you use a ride-share, you pay as you go. Similarly, purchasing a traditional software license often comes with a big, upfront price tag, whereas security software-as-a-service (SaaS) is usually paid over time as a subscription model.

With ownership, there are hidden expenses to uncover. For a car, think parking, maintenance, gas, insurance. For cybersecurity, think real estate for data centers, power for heating and cooling, security personnel. A security SaaS solution means the vendor is responsible for those costs, not you — you’re free to decommission your hardware infrastructure.

Furthermore, a SECaaS vendor can spread those costs over many customers. That means economies of scale, which is one reason a SECaaS solution could lower your total cost of ownership. Also, SaaS typically hits the books as an operating expense instead of a capital expense, which can offer a real advantage for companies that don’t have the budget to cover a big software purchase.

Keep Your Software Up to Date

If you buy a car, you’re committing to that vehicle’s technology until you buy a new car. And with the rate of change of technology, that likely means in a year or two, you no longer have the latest and greatest. Security software licenses may entitle you to updates and upgrades, but these are often released once or twice a year and require reinstalling or running an update.

With SaaS software, updates are pushed continuously and automatically. In the world of cybersecurity, when you’re up against constantly evolving threats, being up to date could mean the difference between a breach and no breach. – Read more

In this guest post, Will Grannis, founder and director of the Google Office of the CTO, sets out how adopting a multi-cloud strategy can help enterprises navigate IT challenges around value, risk and cost.

Welcome to the second piece in our Cloud Migration Best Practices series.

Having owned and operated a nationwide all-IP voice network for more than a decade, we’ve seen a lot of our customers migrate their telephony from on-prem to the cloud. Since customer service and co-creation is part of who we are at Bandwidth, we’ve been in the trenches with our customers, and felt their pain as they’ve migrated. In this series, we outline the biggest migration challenges we’ve seen over and over, and share what you can do to avoid them.

The second challenge in our series is a problematic implementation caused by hesitancy and half-measures. It’s what happens when well-intended caution backfires.

Half-measure: Forwarding high-profile numbers to the cloud

In a nutshell: It can cause your high-profile toll-free number to go down.

Sometimes businesses with high-profile toll-free numbers (TFNs) decide the risk for disruption is too high to port those numbers to their cloud platform. (For more info on migration porting headaches and how to eliminate them, see our first post.) As a work-around, most major Contact Center as a Service (CCaaS) platforms and some Conferencing solutions offer the option to forward traffic from a TFN to a group of local numbers (TNs), so porting those high-profile numbers isn’t necessary. Fine in theory, potentially disastrous in practice, often leading to downtime for the very toll-free number you’re trying to protect.

Why doesn’t it work?

When you opt to forward instead of port your toll-free number, platforms typically offer blocks of your unused local TN’s to carry the traffic. You pick your block of TNs (which generally reside in one or two local markets), and start using your forwarded toll-free number through the cloud platform. The problem is that this provisioning process, within the cloud platform, is a manual one, so if toll-free traffic spikes, the number of endpoints don’t react accordingly unless a human goes in and makes adjustments.

You see, while the CCaaS providers’ cloud offerings are scalable, the local PSTN isn’t—and was never built to be. So when a local PSTN market isn’t prepared for the volume of traffic that suddenly forwards, local market outages can occur. Now, that’s a lot of telecom-speak… think about it this way:

It’s like traffic in Austin

Picture all the highways and roads in Austin, Texas. There are a ton—enough to handle all the traffic in the city. The infrastructure is substantial, but finite, just like the capacity of the local PSTN. Now imagine that all the cars that travel those Austin roads are concurrent calls. Everything runs fine, even when it’s busy. Until one day, all of the white cars in the United States get dropped into Austin, Texas. The city can’t handle it, and everything gridlocks. That’s what happens when large organisations with high-profile toll-free numbers forward nationwide toll-free traffic to a block of local TNs. And that’s why your toll-free number goes down.

Why It’s Potentially Disastrous

We don’t mean to be dramatic, but there are three big problems with this kind of market outage, all of which impact your bottom line: – Read more

The longest-running American TV game show host Bob Barker once said, “You can’t fool television viewers with dancing girls and flashing lights.”

The same mindset goes with prospects. The smoke and mirrors show won’t get you far when potential customers decide on who to pick when they come down to price. This is the fork in the road for every software company ready to sell their service or product. With the goal of getting on the right path to revenue, SaaS organizations are often thrown into a debacle of what pricing model to use because there are so many of them.

Do they require a customer to pay per seat? Or per active user? This is a relatively new pricing model and it’s gaining traction, with Slack at the forefront. What about offering tiers in which certain features and functions are unlocked with higher rates? There’s also pay-per-use, pay-as-you-go, monthly charges, or the option to cancel anytime. The subscription model allows the customer to unlock savings with longer-term commitments.

And then there’s Freemium, which I’ll explore further, given the latest resurrection in interest in this model, as stated in Mary Meeker’s long-standing Internet Trends report, and with Slack’s IPO, alongside other popular games and services that have done swimmingly well with the model, such as Fortnite, Dropbox, Spotify, and others.

The People vs. Freemium

Freemium is essentially a pricing strategy that aims to give no-cost access to basic but “sticky” features of a software, with the aim of demonstrating value to a potential customer and showcasing additional high-value features to convince purchase. This model has been around since the early internet days and has a number of variations.

There’s free full function, but for a limited time or limited use, or free limited features with a paid upgrade – otherwise free basic tiered premium. Others offer free single-use and then require a customer to pay after. One other model is free ad-supported, in which customers use the software free with in-line ad placement (user subscription is monetized via ad revenue), paid upgrade to ad-free (a common in-app model).

On a positive note, if you decide to go on the Freemium path you expose value and features to new buyers with low risk for customers and high conversion opportunities for the seller. Your brand would ideally create a “stickiness” with the user – once a user captures value initially, it becomes harder to live without. – Read more