Cloud Monetization: A Step-by-Step Guide to Optimizing Your SaaS Business Model

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© SafeNet Confidential and Proprietary Cloud Monetization: A Step-by- Step Guide to Optimizing Your SaaS Business Model Shlomo Weiss VP of Business Development May 9, 2012 @LicensingLive
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5 steps to optimize your SaaS business model. Originally presented by VP Business Development Shlomo Weiss at the SIIA All About the Cloud conference in May 2012.

Transcript of Cloud Monetization: A Step-by-Step Guide to Optimizing Your SaaS Business Model

  • 1. Cloud Monetization: A Step-by-Step Guide to Optimizing Your SaaS Business Model Shlomo Weiss VP of Business Development May 9, 2012 @LicensingLive SafeNet Confidential and Proprietary

2. Typical SaaS Company Approach @LicensingLive SafeNet Confidential and Proprietary2 3. It starts with a land grab SafeNet Confidential and Proprietary 3 4. and turns into How do we optimize? @LicensingLive SafeNet Confidential and Proprietary 4 5. A Balanced Business Model Monetization(LTV) Cost toAcquire aCustomer (CAC) Source: David Skok, Matrix Partners @LicensingLive SafeNet Confidential and Proprietary5 6. Questions we often hear @LicensingLive SafeNet Confidential and Proprietary 6 7. What business model should we use? @LicensingLive SafeNet Confidential and Proprietary7 8. How do we optimize our offering? @LicensingLive SafeNet Confidential and Proprietary8 9. What metric should we use to charge our customers? @LicensingLive SafeNet Confidential and Proprietary 9 10. Maximizing Revenues Lower PriceHigherPrice Segmented Price @LicensingLive SafeNet Confidential and Proprietary 10 11. Match Offering to Value Received by the Customer @LicensingLive SafeNet Confidential and Proprietary11 12. Segmented OfferingPackages with different + Value A, B and C values, where values canbe: Features+ Value A, B or C Resources Service Levels Frequency/durationStandard Package Etc.Light Version @LicensingLive SafeNet Confidential and Proprietary 12 12 13. Optimized OfferingPackages with different + Value A, B and C values, where values canbe: Features+ Value A, B or C Resources Service Levels Frequency/durationStandard Package Etc.Light Version @LicensingLive SafeNet Confidential and Proprietary 13 13 14. But, how do we get there? @LicensingLive SafeNet Confidential and Proprietary 14 15. Its complicatedElements of a SaaS business model Price ($X or free) Metric (user, transaction, instance, bandwidth, click, print, save, etc.) License Model (subscription, pre-pay, post paid, metered, concurrent users) Package (Standard, Basic, Pro, Enterprise, etc)But which combination is right for you?Option 1 Option 2 Option 3 Option 4 Option 5 Etc.Price A ,Price B, Price A, Price C, Price D, .Metric B,Metric B,Metric C,Metric B,Metric D,.License A, License D, License B, License A, License C, .Package CPackage APackage BPackage APackage [email protected] SafeNet Confidential and Proprietary 15 16. Challenge: How to take the guesswork outof finding the right model? @LicensingLive SafeNet Confidential and Proprietary 16 17. 5 Steps to Optimize Your SaaSBusiness Model @LicensingLive SafeNet Confidential and Proprietary 17 18. 1. Track Usage Implement usage tracking to understand how customers are using our service todayResources UsersContent Features Bandwidth ModulesStorage Instances @LicensingLive SafeNet Confidential and Proprietary18 19. 2. Identify Patterns 2A - Analyze usage data to identify patterns Frequency of use By % of users Peak usage times Grouping of types of usage/users Usage over time 2B - Survey/Speak with users to validate findings @LicensingLive SafeNet Confidential and Proprietary 19 20. 3. Segment Accordingly OptimizedCustomerProduct MarketSegmentation PackagingApplicability (The right offering forevery customer) @LicensingLive SafeNet Confidential and Proprietary 20 21. 4. Test Models Run A/B tests to try out new models Existing users New customers Have systems in place to easily implement and adjust Pricing Metrics License models Packages @LicensingLive SafeNet Confidential and Proprietary21 22. 5. Measure ResultsSelect packages based on the results of A/B testingDiscontinue packages that are not performing wellContinue to iterate and refine offerings that perform well @LicensingLive SafeNet Confidential and Proprietary 22 23. 5 Steps to Optimize Your SaaS BusinessModel Track Usage MeasureIdentify ResultsPatterns Test SegmentModels @LicensingLive SafeNet Confidential and Proprietary 23 24. Bringing it all together SaaS application for Beta management2007: 2011: Seat Based Optimized Offering2002:Usage Limits SegmentedPerpetualPackages License 2009: Seat BasedEditions 2005:Annual Subscription Unlimited [email protected] 25. Additional Tips Link model to value provided to customer Need to find the right balance: segmentation vs. keeping things simple Enable common features to be used by customers of different sizes Consider combining different models @LicensingLive SafeNet Confidential and Proprietary25 26. To Sum it Up One size does not fit all Segment your offering to maximize revenue based on real usage data & customer feedback Continuously iterate to improve your offering Make sure you have the processes and systems in place to enable you to optimize your business model @LicensingLive SafeNet Confidential and Proprietary 26 27. Software Monetization in the Cloud Flexible Service Catalogs Automated Provisioning Service Usage Control Service Usage Measurement Booth BOOTH FREE #13 13 TRIAL Visit us today at www.SentinelCloud.com @LicensingLive 28. Thank You @LicensingLive SafeNet Confidential and Proprietary 28