Tags » SaaS Reviews
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Adam Johnston
on Dec 21, 2009 in News & Discussion
Firms in the UK are more cautious about adopting cloud services than their US counterparts, according to research from infrastructure company RainStor.
DS Community Team
on Dec 16, 2009 in News & Discussion
DreamSimplicity has partnered with SIIA to provide video coverage for On Demand 2009 Oct. 29-30 San Jose, California. We will be chatting with industry executives and innovators.
Yesterday, we attended a symposium hosted by NetSuite on recurring revenue, items discussed: why it's important, best practices and how NetSuite can help. Being the host and sponsor, Netsuite as expected plugged their product at all appropriate times, but despite that, there was still a lot of really good info and we gained insight into why NetSuite is a profitable SaaS provider.
A common theme of the topics covered was that many of the features that NetSuite touts were the direct result of real world problems experienced by Netsuite. Netsuite's CEO, Zack Nelson, even went so far as to say that their strongest vertical product offering was the software platform largely due to the fact that development cycles were largely driven by Netsuite's growing pains and needs to streamline the order to implementation to happily using to up-sell cycle. Admittedly, this is where the NetSuite product offering is the strongest and from the software vertical additional platforms were built out and developed. Regardless of the vertical though the fundamentals remained the same. Highlights are outlined below:
NetSuite's perspective was interesting: As is the case with most SaaS providers, monthly or quarterly fees are king. Certainly, professional services plays a part in the revenue game, but if you examine most SaaS companies existing or projected revenue then you'll likely find that most if not all rely heavily on recurring revenue as a part of the strategy. Looking outside of Software-as-a-Service companies, a lot of organizations consider recurring revenue important. For example, service oriented companies will nearly always position their product as something that you'll need time and time again. It was companies in this broader sense to whom the NetSuite symposium was really aimed at while talking about recurring revenue within the context of NetSuite's own struggle to maximize this important piece of profitability.
A common theme of the topics covered was that many of the features that NetSuite touts were the direct result of real world problems experienced by Netsuite. Netsuite's CEO, Zack Nelson, even went so far as to say that their strongest vertical product offering was the software platform largely due to the fact that development cycles were largely driven by Netsuite's growing pains and needs to streamline the order to implementation to happily using to up-sell cycle. Admittedly, this is where the NetSuite product offering is the strongest and from the software vertical additional platforms were built out and developed. Regardless of the vertical though the fundamentals remained the same. Highlights are outlined below:
- Recurring Revenue is everyone's responsibility. Ultimately, recurring revenue is a direct result of customer satisfaction. That means that all departments that touch a customer bear some responsibility for ensuring and maintaining a happy customer. The responsibility starts with the sales process, but quickly turns into a professional services (in terms of SaaS and software implementations), and even product development and finance departments. One poignant example of this given during the presentation was the seemingly harmless aspect of billing. All too often billing the customer is considered an afterthought where getting it right the first time takes a back seat to closing a deal or up-selling a customer. The point was made that at the end of the day, billing is oftentimes cynically seen by the customer as the most important thing to a vendor, so if they can't get that right then what else is the vendor getting wrong in terms of security and privacy, data and service...
- Closing the initial deal to producing consistent recurring revenue is ONE process. 100 companies will handle this 100 different ways, but regardless of how the work flow is mapped out, the process of closing the initial deal, implementing the service, billing for those services and following up with the customer are all part of the same process. While companies may have different departments to handle each of these aspects and so fall into the trap of division of labor and therefore division of responsibility, that's not how customers see things. Customers see that they are paying a fee to a company to provide a service and all interaction with that company is one in the same. Streamlining the the quote to cash process is therefore critical to reducing errors and making things simple for the customer.
- Happy customers = recurring revenue. The first and biggest hurdle that needs to be overcome once a new client is brought aboard is keeping that customer happy. The good thing is that finalizing the decision to choose a particular company's service is usually a happy ordeal. The search is over, the hours spent evaluating and weighing the pro's and con's are over and now it's time to get down to business and solve problems. So maintaining and building on those feelings is key. The important thing to remember here is that having a perfect product or a flawless process isn't an absolute requirements - it's about giving the customer the warm fuzzy feelings that you're there for them.
- Year 2 and 3 are about solving problems. Now that you've brought the deal in the door and customers are happily using your service, it's important to stay close to the deal and keep them happy. Nothing is perfect and problems will arise. The good news is that hopefully by now, customers are vested in your product and want to make it work. So you as the provider needs to meet them more than half way and solve problems for customers.
