Journey to SaaS - a hitchhiker’s guide
This post aims to frame the Independent Software Vendor or Service Provider journey to Software-as-a-Service (SaaS) and provide some much needed signal to a noisy landscape. This post will cover the Why, What, How of SaaS. (We leave the Who and When up to the reader.)
TL;DR
- The specific decisions at the current inflection point on the s-curve of business growth for a software or services provider are: when and how to embark on the SaaS journey to transition to cloud capabilities.
- The journey to SaaS is often (mistakenly) described as “SaaSifying your software solution”. It is, in reality, about “SaaSifying your business”
- The journey to a SaaS business will affect many of the current business and technology practices, some of which have very deep roots.
- Frame your north star in terms of both a target marketplace and technology model
- **SaaS Academy is a key guide on this journey.
Why SaaS? - The S-curve of business growth
Why is the topic of SaaS so difficult to wrangle? Much if that comes down to the s-curve of business growth, and more importantly and the strategic points of inflection that create dilemmas.
(Ref: Only Dead Fish - Two More Things About S-Curves
The cycle of business growth seen in the curve can be broken down as:
- A - Start
- B - Growth
- C - Scale
- D - Mature
Over the life of any business, decisions at the inflection points will determine if the growth persists, stalls, or declines. The specific decisions on the s-curve of business growth for a software or services provider are: when and how to embark on the SaaS journey to transition to cloud capabilities.
What SaaS? - More than a technology play
The journey to SaaS is often (mistakenly) described as “SaaSifying your software solution”. Certainly there are some key technical milestones on the journey to offering SaaS, but there also some critical business milestones as well. Instead, a point of view that reflects the holistic impact of the journey would be “SaaSifying your business”.
Business questions to consider
- How will the per-user subscription model affect your current compensation structure for sales?
- What will the ability to offer a free-trial do to you sales approach and sales cycle?
- Does the inital lower cost of of SaaS solutions and streamlines sales cycle create new opportunities in different market segments?
- What will you support model and customer success look like to ensure long term use of the solutions?
- How will you transition the existing customer base to SaaS?
- …
Technology questions to consider
- What will your accessibility strategy be?
- What will the solution lifecycle model look like for you solution(s)?
- How will you transition from a monolith solution to a cloud-based solution? will you partner through P2P motions to get there?
- How will you achieve both scale and still partition customers to ensure security, privacy, and confidentiality?
- How will you harness solution telemetry to guide the evolution of your solution?
- …
We see that the journey to a SaaS business will affect many areas of the current business and technology practices, some of which have very deep roots. A target model can be useful when trying to chart a course in this case. To that end, we will leverage a marketplace model with cloud service providers (CSP), independent software vendors (ISV), and customers.
How SaaS? - A Marketplace Model
The following represent a marketplace model. It is a simplified view to encourage discussion and to get the gears turning: how might this model be leveraged to address some of the business and technology considerations we listed earlier?
(Ref: Activate an ecosystem of partners and unlock new markets.)
Microsoft Commercial Marketplace - More that a “listing”
A common misconception about the Microsoft Commercial Marketplace is that it is simply a listing of software and service offers. The Commercial Marketplace is much more than that. Here are a few often overlooked aspects of the Commercial Marketplace:
- The Commercial Marketplace allows partners to co-sell with Microsoft an work directly with Microsoft sales teams and Microsoft partners on joint selling opportunities. This can aid with:
- Expanding your solution portfolio to new markets and segments.
- Generating new marketing leads and sales opportunities.
- The Commercial Marketplace is a key element in Partner-to-Partner (P2P) opportunities.
- The Commercial Marketplace allows service partners to bundle Independent Software Vendors (ISV) software capabilities as part of their offer to solve business problems.
- Microsoft and customer incentives exist to further reduce the hurdles to transacting through the Commercial Marketplace.
Microsoft Commercial Marketplace for the Cloud Service Provider (CSP)
Cloud Solution Providers (CSPs) are Microsoft partners who are authorized to sell Microsoft Cloud Services under Cloud Solution Provider licensing.
Reselling, on its own, does not offer many avenues for differentiation. On the other hand, combining ISV offers and service provider expertise to solve customer problems is a much more compelling value proposition that commands significantly higher margins. Further surrounding the software with assessments, proof-of-concepts, free-trials, support, and consulting services creates additional revenue acceleration opportunities.
Microsoft Commercial Marketplace for the Independent Software Vendor (ISV)
An independent software vendor (ISV), also known as a software publisher, is an organization specializing in making and selling software, as opposed to computer hardware. (source: wikipedia
- Co-selling with Mnicrosoft through Commercial Marketplace allows ISVs to reach Enterprise customers and simplify sales.
- Offers sold through Microsoft are called transactable offers. An offer that is transactable is one in which Microsoft facilitates the exchange of money for a software license on the publisher’s behalf.
- A private offer enables the ISV publisher to provide a margin on their published solution to incentivize you to sell that solution to their customers.
- Multi-party private offers (coming to private preview) will empowering the partner ecosystem to sell together while unlocking customer cloud consumption benefits.
How SaaS? - A technology model
The SaaS journey would not be complete without identifying some key technical waypoints. Below are some of the technical references from the a set of resources to guide partners on the SaaS journey.
| Source | Description | Notes |
|---|---|---|
| Independent software vendor (ISV) considerations for Azure landing zones | The landing zones describe how to build an Azure environment with multiple subscriptions. Each landing zone accounts for scale, security, governance, networking, and identity, and is based on feedback and lessons learned from many customers. | Microsoft Lean |
| Tenancy models to consider for a multitenant solution | Guidance for technical decision-makers about the tenancy models you can consider and their tradeoffs | MS Learn |
| Azure SaaS Development Kit (ASDK) | he Azure SaaS Development Kit is a deployable reference implementation of pre-built modules designed to help you launch your SaaS offering faster | Github |
| Community Sample Code and SDK for SaaS Applications | This project is a community-supported reference implementation for integrating Software-as-a-Service (SaaS) solutions with Microsoft commercial marketplace SaaS offers. | Github Version 6.0.0 |
| What is Azure Chaos Studio | Azure Chaos Studio is a managed service that uses chaos engineering to help you measure, understand, and improve your cloud application and service resilience. | MS Learn |
Way forward - Mainstream path to SaaS
Mainstream partners will leverage the following set of resources to enable their SaaS journey:
| Type | Description | Notes |
|---|---|---|
| SaaS Academy | Microsoft SaaS Academy brings together best practices and guidance from Microsoft employees, partners and customers to help businesses accelerate their “Software as a Service” journey, addressing both business and technical aspects. | Microsoft SaaS Academy |
| Marketplace Summit | Session recordings are available for you to watch, learn and enjoy! | November 2022 |
| Founder’s Hub | Microsoft for Startups Founders Hub is a platform for all founders at any stage to reach their next milestone through personalized technical tools and business resources. Founders can get started on the platform in minutes and gain free access to the technology and support that’s critical to turning dreams into life-changing products. | Microsoft for Startups |
Way forward - Insiders path to SaaS
In addition to mainstream approaches, Insiders will uncover ways to:
- Align to Microsoft sales teams to extend their reach into Enterprise customers.
- Develop P2P strategies to accelerate their own pivot to SaaS or to complement existing offerings.
- Leverage reference and community references to develop SaaS offerings for the Microsoft Commercial Marketplace
Some insider resources:
| Type | Description | Notes |
|---|---|---|
| ISV Success Program | Build, sell, and thrive on the Microsoft Cloud. | In Public Preview |
| Business Applications ISV Connect | Grow your business faster by building unique, customer-centric line of business (LOB) apps with Dynamics 365 and Power Apps. | |
| Microsoft SaaS Day | As part of Microsoft SaaS Academy, we are launching Microsoft SaaS Day – a free full-day conference addressing both business and technical aspects of SaaS. | Microsoft SaaS Academy |
| Mastering SaaS Offers | This on-demand learning series includes videos, sample code, and hands-on labs meant to speed your time to publishing your custom SaaS offer on the Microsoft commercial marketplace. If you are building a SaaS offer for the marketplace this learning series is for you. | Mastering Marketplace |
| Microsoft Airlift | Technical deep dives | Microsoft Airlift |
Get after it with the Partner Crucible
The PartnerCrucible hosts a collection of links to key resources for partners.
- a set of resources to guide partners on the SaaS journey
- a set of resources about the Commercial Marketplace
- a set of resources for Cloud Service Providers
- a set of resources for Independent Software Vendors
This project aims to serve as an entry point into the wealth of information and services available to Canadian Microsoft partners.