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

© SafeNet Confidential and Proprietary

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

Shlomo WeissVP of Business DevelopmentMay 9, 2012

@LicensingLive

2


Typical SaaS Company Approach…

@LicensingLive

3


It starts with a land grab …

4


…and turns into “How do we optimize?”

@LicensingLive

5


A Balanced Business Model

Monetization(LTV)

Cost toAcquire aCustomer

(CAC)

Source: David Skok, Matrix Partners

@LicensingLive

6


Questions we often hear…

@LicensingLive

7


What business model should we use?

@LicensingLive

8


How do we optimize our offering?

@LicensingLive

9


What metric should we use to charge our customers?

@LicensingLive

10


@LicensingLive

Maximizing Revenues

Lower Price

HigherPrice

SegmentedPrice

11


Match Offering to Value Received by the Customer

@LicensingLive

12


@LicensingLive

12

Segmented Offering

+ Value A, B and C

Light Version

+ Value A, B or C

Standard Package

Packages with different values, where values can be:

• Features• Resources• Service Levels• Frequency/duration• Etc.

13


@LicensingLive

13

Optimized Offering

+ Value A, B and C

Light Version

+ Value A, B or C

Standard Package

Packages with different values, where values can be:

• Features• Resources• Service Levels• Frequency/duration• Etc.

14


But, how do we get there?

@LicensingLive

15


@LicensingLive

It’s complicated…

Elements of a SaaS business modelPrice ($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)

Option 1 Option 2 Option 3 Option 4 Option 5 Etc….

Price A , Metric B, License A, Package C

Price B, Metric B, License D, Package A

Price A,Metric C, License B, Package B

Price C,Metric B,License A,Package A

Price D,Metric D,License C,Package C

…….…….…….…….

But which combination is right for you?

16


Challenge: How to take the guesswork out of finding the right model?

@LicensingLive

17


5 Steps to Optimize Your SaaS Business Model

@LicensingLive

18


@LicensingLive

1. Track Usage

Implement usage tracking to understand how customers are using our service today

Users

Features

Modules

Content

Resources

Bandwidth

StorageInstances

19


@LicensingLive

2. Identify Patterns2A - 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

20


3. Segment Accordingly

Product Packaging

Customer Segmentation

Optimized Market

Applicability

(The right offering for every customer)

@LicensingLive

21


4. Test Models

Run A/B tests to try out new modelsExisting users

New customers

Have systems in place to easily implement and adjust Pricing

Metrics

License models

Packages

@LicensingLive

22


@LicensingLive

5. Measure Results

Select packages based on the results of A/B testing

Discontinue packages that are not performing well

Continue to iterate and refine offerings that perform well

23


@LicensingLive

Track Usage

Identify Patterns

SegmentTest Models

Measure Results

5 Steps to Optimize Your SaaS Business Model

@LicensingLive

SaaS application for Beta management

Bringing it all together

2002: Perpetual License

2005:Annual Subscription – Unlimited Usage

2007: Seat Based – Usage Limits

2009:Seat Based

Editions

2011:Optimized Offering

– Segmented Packages

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

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

Software Monetization in the Cloud

• Flexible Service Catalogs • Automated Provisioning• Service Usage Control• Service Usage Measurement

Booth #13

Visit us today at www.SentinelCloud.com

BOOTH 13FREE

TRIAL

@LicensingLive

28


Thank You

@LicensingLive