As a vendor-independent consultant, I spend a lot of time on SaaS websites to try and understand:

• What is the product offering (ie what business problems does it solve and what benefits can it bring)?
• How does it work conceptually (ie exec/business overview)?
• How does it work practically (ie practitioner/user demo)?

The first two questions help me to see if the product is likely to address my business problems (or, in my case, those of my prospects and clients). The third one allows me to confirm the potential fit and decide on next steps. [Read more...]

We all know the sales pitch for SaaS cloud computing – zero capex, predictable pay-as-you-go opex, robust apps with regular “all aboard” releases, short project cycles and quick time-to-value measured in weeks rather than months or years. And even with concerns about SaaS security, performance and integration with other applications, 2011 SaaS revenue growth was still between 15-25% depending on the region (see these reports by Gartner and the Virtual Internet Blog).  And the rate for 2012 shows no signs of abating.

GORILLAS IN THE MIST

Given these numbers, you would expect companies across-the-board to be thinking SaaS when it comes to addressing their business problems. This is certainly true for SMEs (Small and Medium Enterprises), for whom a combination of capex constraints, small IT departments and far less organizational politics tends to favour quicker SaaS adoption.  [Read more...]

The subject of the Patriot Act vs EU data privacy has once again made headlines. CIO.com has just published “The Patriot Act and Your Data: Should You Ask Cloud Providers About Protection?” But, unlike other articles to date, this one opens up new ground by reminding us that even without the Patriot Act, US Law Enforcement Agencies (LEAs) are still able to access personal data residing in the EU – and legally to boot. This is done through MLATs, or Mutual Legal Assistance Treaties, which allow an LEA in country A to request his counterpart in country B to cooperate in providing information on a suspect in country B – whilst at the same time protecting the suspect’s civil rights. [Read more...]

In the second article of this three-part post, “Reducing SaaS customer churn – Part II (Metrics and reasons for churn)”, we looked at the various ways in which you can measure churn, what current churn rates are like, and the main reasons that drive customers to not renew their subscriptions.

In this third and final post, we’ll look at the main levers for SaaS vendors to reduce customer churn.

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In the first article of this three-part post, “Reducing SaaS customer churn – Part I (The problem)”, we looked at why customer churn – and its related metrics, customer acquisition costs (CAC), monthly recurring revenue (MRR) and customer life-time value (LTV) – are so critical to SaaS business success. We also saw how churn can vary based on where one sits on the SaaS model scale, which ranges from “no-touch” web self-service to “high-touch” feet-on-the-ground enterprise sales.

In this second post we’ll review the various types of churn metrics, try and assess the current levels of churn and finally examine the main reasons why some SaaS customers don’t renew their subscriptions. [Read more...]

In a previous life, I used to work in CRM at a B-to-B telco which sold voice and data services to multiple market segments, from SMBs to global accounts. The main business metrics were customer acquisition costs (CAC), monthly recurring revenue (MRR), customer life-time value (LTV) and customer churn (which measures the attrition rate of one’s subscriber base). Fast forward 10 years to SaaS (Software as a Service) cloud computing, whose main metrics are – CAC, MRR, LTV and customer churn!

In the first of this three-part series, we’ll examine why customer churn – and its associated metrics of CAC, MRR and LTV – is so critical to the success of SaaS cloud vendors. In part II, “Reducing SaaS customer churn – Part II (Metrics and reasons for churn)” we’ll review the various types of churn metrics and explore the main reasons why some SaaS customers don’t renew their subscriptions. And in the third and final post, “Reducing SaaS customer churn – Part III (Levers for reducing churn)”, we’ll look at the options available to vendors to reduce customer churn. [Read more...]

The revised EU data protection laws, which were first leaked to the press in early December 2011, will be submitted to the European Parliament for ratification around the end of January 2012.

There has been extensive coverage of this over the past month of December. Unfortunately, most of it makes for pretty heavy reading, which many of us are either unable or unwilling to wade through. But given its critical importance to both cloud service providers (especially in the US) and to their clients and prospects (especially in Europe), I have attempted here to summarize the main highlights in short, bulleted one-paragraph form in the four key areas of jurisdiction, controller and processor responsibilties, individual rights and company obligations. Those who want to dig deeper can check out the Further Reading section at the end. [Read more...]

Financial ROI has always been the most politically-correct driver for the funding of IT-enabled business initiatives, even though actually being able to demonstrate this after the fact has always proved next to impossible (bar the obvious exceptions that confirm the rule). As author Harwell Thrasher mentions in my article on the subject, ROI – RIP?, “the project with the highest ROI on paper tends to be the one with the most creative proposal-writer”.

For cloud computing, financial ROI still remains high on the list of criteria for project approval. In other words, if you really want to ensure funding for your cloud initiatives, focus mainly on financial ROI. And yet, even when taking into account those cloud initiatives that do yield spectacular ROI (and they do exist, eg 65-70% for one US company on p3 of this report, Heading into the Cloud with Confidence, and 100% for a Swiss HR and training company I met last week), financial ROI is not the main reason companies embark on cloud initiatives. [Read more...]

Questions on where data is located and adherence to data privacy regulations usually figure prominently in any cloud vendor due diligence checklist, eg in this  Checklist for using a Software as a Service (SaaS) vendor (last question), or in this Cloud Security Checklist (question 2) or in my own SaaS project self-assessment (Questions 8 and 9). The subject has recently made headlines because of concerns that US cloud providers do not provide adequate data protection for customers in the European Union.

In this article we’ll look at the recent Patriot Act headlines, try to understand the background to the EU’s data protection laws and run through a quick primer on the subject. Then we’ll consider the challenges of implementing pre-cloud privacy laws in a cloud world, and how the EU regulations are likely to change to accommodate this. Finally, we’ll look at threats (to US cloud providers) and opportunities (for EU cloud providers). [Read more...]

You don’t have to be part of the clouderati to know that SaaS (Software as a Service) does not necessarily mean cloud computing. And yet, for many, especially in the business world, SaaS is part of cloud. Though the specialists amongst us know this to be inaccurate, the question is “should we care?”. It depends on who’s answering the question. [Read more...]