page 1 saas – business model debmalya khan debmalya khan
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SaaS – BUSINESS MODEL
Debmalya Khan
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AGENDA
Definition and Logic
Key Characteristics
SaaS Platforms
Preferred hosting - trends
SaaS Database Architecture
SaaS benefits for customer groups
SaaS perceived disadvantages
SaaS - benefits to vendors
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DEFINITION AND LOGIC
Application hosted as a service across the internet
Alleviates the burden for maintenance , ongoing operation and support
Vendors control and limits use, prohibits distribution and version control
Hosting – Own Web Server / third party application service provider( ASP )
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KEY CHARACTERISTICS
Network based access to commercial software
Management from central location rather than each customer site
Single user – multi-tenant architecture
No Need for downloadable patches/ upgrades
Providers leveraging economies of scale in
– Deployment
– Management
– Support
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SaaS PLATFORMS
DEVELOP, INTEGRATE , DEPLOY AND HOST THESE APPLICATIONS
Delivery Platform – Delivery as a core competency
– Managed Hosting
– Cloud Computing
Development Platform
Application Led Platform
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DELIVERY PLATFORM- MANAGED HOSTINGContract hosting provider to host infrastructure
Developers setup their own infrastructure from a provider who manages it.
Provided with superior support and infrastructure
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DELIVERY PLATFORM- CLOUD COMPUTING Vendor provides on –demand access to infrastructure
capacity over the cloud to deploy applications, obtain other components separately
Efficient scalability and provisioning of capacity possible
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DEVELOPMENT PLATFORM
Providing IDE in addition to hosting
Obtain a general purpose programming language
Cost effective alternative to providing on- premise SDK’s to developers
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APPLICATION LED PLATFORM
Utilize platforms of popular SaaS applications (e.g. Force.com
Suiteflex etc.) to develop and deploy the application
Deliver a business application and establish the foundation for the platform as a separate offering
Rapid deployment of new applications to customer base
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SaaS PLATFORM OPTIONS
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PREFERRED HOSTING - TRENDS
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SaaS DATABASE ARCHITECTUREDedicated Tenant Database
– Cater to specific customer requirements
– Easy for customization, preferably for enterprise customers
– Enterprise customers willing to pay more for the customization
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SaaS DATABASE ARCHITECTURE( CONTD )SEPERATED SCHEMA DATABASE
– All tenants using the same central database
– All tables duplicated by the vendor to suit the number of tenants
– Different set of permissions
– Three customers using the same central database
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SaaS DATABASE ARCHITECTURE( CONTD )SHARED DATABASE
Fixed set of extensions
– Additional columns for customers to store the predefined data
Extension Value-Pair
– More Flexible
– Define your own extensions in another table linked to the parent table using keys
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SaaS BENEFITS FOR CUSTOMER GROUPS Try before use Software – creating new trial users without cost
Automatic provisioning – Multi- tenant system – designed to add a new tenant within a minute
No Hardware Compatibility issue:
Free software updates
Effective Maintenance: No investment in a testing server with the same specifications as a deployment sever
Low cost of Entry and TCO :
Outsourced Expertise dramatically reduce risk
Unmatched infrastructure and security measures:
Community: Encourage user participation, harness collective activity
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SALESFORCE.COM CASE STUDY
Microsoft Office Word Document
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SaaS BENEFITS FOR CUSTOMER GROUPS( CONTD )
Criterion for selecting providers for this modelCriterion for selecting providers for this model
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SaaS PERCEIEVED DISADVANTAGESDifficult to relinquish control and trust third party to manage their applications and data
Non – availability of some business applications required for specific verticals
Depends on the competitive strategy of the organization – Cost Leadership or Differentiated
Weak integration ability not only with other systems but also with people and processes
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SaaS - BENEFITS TO VENDORS
Enable a new group of customers
Making the product cheaper
Enable customer segmentation– Large customers -
Corporations– Typical customers – Low
level configuration customers– Non – addressable
customers – Customers using default configuration
Centralize the servers and the service team
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SaaS - BENEFITS TO VENDORS( CONTD )New model of monetization
– Subscription model : major income from number of concurrent users
– Pay- Per-Click model : major income from number of application processing
– Transaction based pricing model : major income from profit sharing with customers
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THANK YOU
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