Despite what many organizations see as simple repackaging of traditional functional capabilities, Cloud Computing and Software-as-a-Service (SaaS) are fundamentally changing the way business gets done. If your product-centric business isn’t already thinking about how it can be more services-driven, you are leaving money on the table and could wind up in the dust of today’s rapidly changing marketplace. More so, if your thinking doesn’t involve moving towards a more on-demand model (leveraging the Cloud and/or SaaS), you won’t be positioned to take advantage of the latest market opportunities.
Capitalizing on the Cloud and SaaS is intimidating for many organizations that are accustomed to producing neatly-packaged hardware and software. Fortunately, experts like Jeffrey Kaplan, Managing Director of THINKstrategies, Inc., are available to work with your team, helping you to find a holistic strategy that allows you to leverage new technology and stay ahead of the curve.
Read our interview with Jeff to gain a better understanding of how a cloud computing and SaaS strategist can help you manage the increasingly on-demand business world.
Q | Tell us about your background as a Cloud Computing and SaaS strategist.
In the 1990s, I was the director of strategic marketing for a network integration services company that provided remote managed services to enterprises and the CMO of an application service provider (ASP) that helped enterprises run their web operations. These experiences made me aware of the opportunities and challenges of delivering application and network services to enterprises on a subscription basis.
When the dot.com bust hit in 2001, many of the first generation of ASPs and managed services providers (MSPs) disappeared because they couldn’t convince enough customers of the value of their services. Customers were uncomfortable with relying on remote third-parties for their application and network capabilities because of security concerns. They were also uncertain about the business benefits of acquiring these capabilities on a subscription basis. As a result, the majority of investors and industry analysts abandoned the ASP and MSP ideas, along with the broader concept of utility computing.
Despite the demise of that first generation of service providers, I was still convinced that a combination of factors would converge to create demand for a new generation of web-based software and computing services. I specifically believed that four factors would fuel a new services market:
- Advancements in the service providers’ delivery capabilities, which would make the services more cost-effective and secure.
- Improvements in the service providers’ go-to-market strategies and service pricing policies to make their offerings more attractive to customers.
- Changes in customer attitudes about the business benefits of subscribing to application and computing services rather than continuing to buy, install and maintain on-premise software and systems.
- Escalating competition and customer expectations driving organizations of all sizes to acquire their application functionality and computing power via more flexible services, enabling them to respond more quickly to the rapidly changing market demands.
I founded THINKstrategies to educate corporate decision-makers about the business benefits of SaaS and Cloud Computing services, help them capitalize on the new market opportunities, and promote their success in the marketplace.
Q | Describe a project you’ve worked on related to SaaS or managed services on IT, Big Data, and the Internet of Things (IoT). What was the impact/ROI of your work?
I primarily work with software and technology companies that are trying to capitalize on these rapidly evolving markets. Through a professional talent network, Catalant Technologies, I was selected by an established independent software vendor (ISV) to help shift its applications from a traditional perpetual license software solution to a SaaS subscription model.
This shift required the ISV to adopt a multidimensional strategy that included:
- Rearchitecting the application software so it could be delivered in a multitenant service fashion. This re-architecture process entailed adopting agile software development techniques, more robust database design, third-party cloud storage services and software utilization tracking, metering and billing systems.
- Reorienting the organization to become more services-oriented. Traditional ISVs have historically trusted their customers to implement their applications and only provided support if the customers had issues with the installation process or in utilizing the software. In order to compete in the SaaS world, the ISV had to assume responsibility for the customer successfully deploying the application. Therefore, the vendor had to design the software to be easier to adopt and create customer support mechanisms that are more proactive.
- Redesigning the vendor’s go-to-market strategy and sales/marketing tactics. The ISV had to package and price its new SaaS applications to appeal to the business end-user, as well as the corporate decision-maker. They also had to retrain their sales people to demonstrate the ease of use of the SaaS solution and work more collaboratively with their channel partners. And they needed to develop new marketing collateral to properly promote the business benefits of their SaaS capabilities.
- Rethinking how the vendor can create new ways to engage with the customers. The ISV had to think differently about capturing data and how their customers actually utilize their SaaS solutions to continuously improve their software functionality, identify new capabilities and market opportunities, build stronger customer loyalty and gain a competitive advantage.
I helped various work teams within the ISV to address each of these challenges and rollout their new SaaS applications in only 6 months.
Q | How does your consultancy approach business needs differently than a big consulting firm?
I have more hands-on experience grappling with the strategic and tactical business issues associated with moving to a SaaS/Cloud Computing business model. As a result, I can work more closely with my clients on a one-on-one basis to address the go-to-market and organizational issues associated with this service delivery model.
I also have the advantage of flexibility and the ability to play many different roles in a variety of client situations. For instance, I can serve as a trusted advisor to senior executives or augment the in-house skills of the staff of a client company depending on their needs. I’m also able to scale my work to help clients ranging in size from the smallest startup to the largest software and technology companies.
Q | Why do you think it’s important for companies to pay attention to Cloud Computing and Saas?
Cloud Computing and SaaS are critical components in the Digital Transformation process. Organizations of all sizes can now quickly gain access to powerful new applications and cost-effective computing resources to respond to changing market conditions and new business opportunities.
These capabilities have dramatically changed the competitive landscape of nearly every industry. Cloud Computing and SaaS not only provide hardware and software functionality at a fraction of the cost to customers, but they also enable enhanced tracking of end-user and customer usage patterns so the providers can better support and engage their customers in an increasingly competitive environment.
Q | As a cloud computing and SaaS strategist, what kinds of challenges do you see most in your industry? What’s being done to address these challenges?
Organizations, both vendors and enterprises, fail to fully understand how Cloud Computing and SaaS fundamentally change how they deliver and acquire computing power and application capabilities.
Vendors tend to think of it as simply repackaging and repricing of their traditional functional capabilities. They don’t understand how the solutions have to be re-architected, go-to-market strategies have to be redesigned and organizational processes restructured to be more services-driven.
Enterprises must reevaluate their vendors’ capabilities to deliver reliable computing power and software functionality as a service. They must also implement a different set of vendor management policies and procedures to ensure they obtain the right service level agreement (SLA) commitments from the Cloud Computing or SaaS providers.
Q | Where do you see interesting or unique opportunities for businesses to leverage artificial intelligence (AI) and machine learning (ML)?
The rapid evolution of artificial intelligence and machine learning are already having a significant impact on the SaaS, Managed Services, Cloud Computing and IoT markets. Vendors in each of these areas are incorporating AI and ML functionality into their solutions so they can:
- Obtain greater insights regarding their customers’ evolving needs.
- Respond more quickly to their changing requirements.
- Develop more efficient operating policies that can be managed in an automated fashion.
- Uncover new business opportunities that might not be readily visible.
- Create new methods of gaining a competitive advantage in the marketplace.
Q | Are there specific industries where SaaS, Managed Services, Cloud Computing and IoT are playing a larger role than others? What kinds of trends are you noticing?
Nearly every industry is capitalizing on SaaS, Managed Services, Cloud Computing, and IoT to achieve their corporate objectives and better serve their customers, partners, and employees.
Many are using these innovations and enabling technologies to rethink their businesses and create new market opportunities. For example, the following companies are capitalizing on IoT to create connected products that can redefine the business value they deliver to their customers:
Philips Lighting has been a pioneer in developing new technological innovations in the lighting industry, but it recognized that it always would be fighting against the commoditization of its product business due to escalating global competition.Rather than continue to be forced to compete on price in an intensifying competitive environment, Philips decided to leverage a new generation of connected products to redefine its business. The company realized that it could utilize its new sensor-based light bulbs to deliver a new set of managed lighting services.
While installing lights is easy, and today’s light bulbs have an extended lifespan, sensor-powered bulbs produce data that can be used for a wider array of purposes. Movement sensors can trigger when the lights go on and off. Activity data can be used to program when and how they are activated. This type of information can make Philips Lighting more valuable as a supplier of lighting services than it was as a simple manufacturer of light bulbs.
Emerson is leveraging a new generation of connected products to redefine its business. Although it is still a manufacturer of heating and cooling systems, the company is now describing itself as a provider of “comfort services” because of the added benefits it can deliver via a new generation of connected solutions and managed services.
In the same way that Nest has popularized the power of smart thermostats in the home, Emerson is offering smart industrial systems for commercial environments.
John Deere is redefining its business value in the agriculture industry. As its tractors and other agriculture machines become more durable, their useful life becomes longer. That has threatened John Deere’s sales revenue as its traditional product markets mature.
By installing a myriad of sensors into its products, the company now can generate reams of data that can help farmers do their jobs more effectively. As a result, John Deere is becoming an information services company, rather than a traditional farm equipment vendor.
Q | What does the future look like for the industry?
Although we’ve been talking about SaaS and Cloud Computing for over a decade, only a small proportion of organizations are truly taking advantage of this new generation of software and computing power. So, these segments of the technology industry will continue to grow significantly over the next 5–10 years.
However, despite all the talk about moving to the Cloud, most enterprises will continue to rely on a mix of on-premise and on-demand solutions to achieve their corporate objectives. As a result, the new challenge for vendors and enterprises alike will be how to properly allocate their workloads across these environments and manage them as they move from one environment to the other.
Q | As a cloud computing and SaaS strategist, what’s the best advice you’ve ever received and what advice would you give businesses in need of industry expertise?
These new services are not just passing fads or the latest overhyped technology trends. They have each become well-established alternatives to traditional methods of delivering and acquiring software functionality and computing power. And because they have clearly demonstrated that they can deliver measurable business benefits, there is no justification for ignoring their potential.
Therefore, it is imperative that you thoroughly examine how these new services can and will impact your current business and operations, and carefully plan how you’re going to systematically migrate the right parts of your business to these new service delivery methods to achieve your corporate objectives.
Although it may be difficult to predict all the ways that Cloud Computing and SaaS will disrupt and improve any particular industry, what’s clear is that overestimating their significance is not a concern. Whether your company is a vendor delivering these innovative solutions or an enterprise looking to capitalize on their benefits, you can’t go wrong investing in tools that allow your team to focus on doing their actual jobs.
Take a look at Catalant’s talent marketplace to see how easy it is to hire business experts like Jeff Kaplan, scaling your team’s expertise to keep up with emerging technologies while maximizing ROI.