Just though I would do a little simple post with some short descriptions to help people understand why and how they might use our product, Bime.

Interesting post found on Linkedin awhile back - I’m curious as to how people feel about it, and if anyone has used any other compensation mechanisms that either worked or didn’t, so please chime in!

On many occasions, I’ve heard people discuss the issues regarding compensation strategy for a SaaS sales team. The one thing I rarely hear, however, is either how folks are dealing with it in the real world or proposals/frameworks that attempt to solve many of the sales compensation problems. My goal with this post is to provide a “rough draft” framework for compensation and to provide a sounding board for SaaS Blogs readers so we can use our collective brains to discuss potential solutions. Before jumping into the post, let’s recap the issues with compensating your SaaS sales team:

1. Tradition - Sales teams are accustomed to large commissions associated with the large license fees tacked on to on-premise software. This creates significant incentive to sell, sell, sell! SaaS, however, takes an “amortized approach” to the traditional lump sum revenue. This puts the company in a position where giving a life time value or term value commission is at odds with the companies sales position since the funds from the sale have not been realized and/or collected at the time of commission payout. This can cause negative cash flow, force underfunding of growth initiatives, and a slew of other issues.
2. Disincentivization via Annuities - If an ISV decides to avoid the cash-flow problems associated with the paying out of commission on contract or lifetime value, they generally try to do so via an annuity approach to commission. Although this aligns with the corporate revenue cycle and cash position, it tends to do a poor job at providing incentive. Furthermore, a successful sales person may focus strictly on account management of existing clients since commission is paid out in annuities and keeping existing customers happy (and collecting the ongoing annuity payment) is easier than landing new customers.
3. New Job Role - Unless your organization separates the function of account manager from sales, odds are your sales people will also serve as account managers, which might be a new concept to your sales folks but also justifies continuing to payout commissions even after discrete sale events. Sales teams are responsible for keeping your existing customers happy since, as an ISV, you must now provide them recurring value for their recurring money, and part of that value comes from their relationship with you.

We can definitely find many more issues to deal with, but tackling just this set is challenge enough. An idea I’ve been tossing around is assigning “age” to generated SaaS revenue, where a salesperson receives the highest % commission at the beginning of a contract and that as the revenue stream becomes older, the % commission drops.

We Are Cloud: newsletter

The National Institute of Standards and Technology (NIST) is researching how software-as-a-service (SaaS) solutions and cloud computing are being used and deployed today and how these technologies will evolve in the future. Because SaaS is so prevalent in the transportation management systems (TMS) and mobile resource management (MRM) markets, I thought it would be worthwhile to dive into NIST’s research and writings on this topic.

My first reaction is that the term “cloud computing” makes a lot of people nervous (“What is it? Is this hype or is it real?”). But NIST has developed a detailed definition of cloud computing, which I’m not I’m not going to get into today, but I recommend that you read “The NIST Definition of Cloud Computing” if you’re interested in the details.

NIST has also defined what it calls “Three Features of a Mature SaaS Application.” Because many supply chain professionals will eventually buy a SaaS supply chain application, NIST’s thoughts are worth sharing. Mature SaaS applications are:

Marc Benioff, Chairman and CEO, salesforce.com, talks of the “explosive potential” that Cloud Computing offers to India; how salesforce.com has helped governments to set up and run projects at short notice and also the relevance of cloud computing to call centers and the way they do their business. Excerpts from an e-mail chat with eWorld:

What sort of market growth do you perceive for cloud computing in India?

There is huge potential for growth in India, explosive growth. From an applications perspective, India's SMB market should be looking to the cloud for its software needs. The cloud is far more cost-effective than traditional client/server software.

Managed governance just a login away

Aaron Lynett/National Post

Oscar Jofre is President and CEO of BoardSuite Corp., a portal service specifically designed to help small business board members collaborate, exchange information and meet the requisite legislative and financial reporting requirements.

Denise Deveau, Financial Post · Monday, Jul. 12, 2010

With cloud computing being predicted to have a growing impact on business activities in organisations of all sizes over the coming years, CIOs are pooling their knowledge and resources to explore the opportunities offered by cloud technology.

At a recent conference in Bengaluru hosted by IBF Media, CIOs of around 30 organisations discussed various aspects of cloud computing, including how companies can define successful business models based on the emerging technology.

The experts outlined how cloud computing has become increasingly accepted by enterprise-level customers, after making its initial mark among small to medium sized businesses (SMBs) looking for lower-cost solutions for hosting their IT services remotely.