Despite the current gloomy economic climate, with IT budgets tightening and layoffs increasing, spending on software-as-a-service continues to grow in enterprise markets. Research from firms such as Gartner, IDC, and Softletter confirm this growth and predict that SaaS market expansion will continue despite the recesson. Why is SaaS continuing to grow while many traditional licensed and on-premise software companies suffer from declining profits and static market share? This webinar hosted and moderated by Aspire Systems featured noted SaaS industry speakers Merrill R. (Rick) Chapman of Softletter and Richard Dym of OpSource discussing: - Softletter research analyzing increased SaaS adoption - Reasons/Factors influencing the SaaS wave - SaaS prospects/opportunities - The future of SaaS and SaaS companies

1. Is (or Why is) SaaS the Survival Strategy in this
Down Economy?
For Webinar Audio, Dial in: Panelists:
Merrill R. (Rick) Chapman
Conference Line Managing Editor, Softletter
US: (866) 581 2411 (Toll free)
UK: 80 00 51 8866 (Toll free) Richard Dym
Chief Marketing Officer, OpSource
Conference ID: 98043879
Webinar ID: 983-396-776 Moderator:
Date : Thursday, May 14th, 2009 Janaki Jayachandran
Business Manager – SaaS Specialization, Aspire Systems
11:00 AM ET/ 08:00 AM PT

2. Agenda
Introduction
Key Highlights from Softletter 2009 SaaS Report
Upcoming Trends in SaaS
Questions to the Panelists

3. About Aspire
Thought leader in Outsourced Product Development
1050+ product releases to date
80+ customers; 475 producteers
63% CAGR over the last six years
Offices in Chennai (India), San Jose, CA, and Branchburg, NJ
ISO 9001:2000 certified
Awards
Ranked 7th in Business
Ranked in the top 500 fast growing technology companies Today Survey featuring
in Asia Pacific for 3 years in a row the Best Companies to
work for in India in 2005

4. Panelist
Merrill R. (Rick) Chapman
Managing Editor and Publisher, Softletter
• Author of The Product Marketing Handbook for Software, In Search of Stupidity:
Over 20 Years of High-Tech Marketing Disasters and the SIIA's US Software
Distribution Guide.
• Rick has worked and consulted for such industry pioneers as MicroPro
(WordStar) and Ashton-Tate.
• Consulted for a wide variety of software and high technology firms such as IBM,
Novell, Microsoft, Sun and many others.

5. Key Highlights from the
Softletter 2009 SaaS Reports
Rick Chapman
Softletter, Managing Editor and Publisher
www.softletter.com
www.saasuniversity.com
rickchapman@softletter.com
860.657.2838 (EST/EDT, Killingworth, CT)

6. Brief Intro: Softletter
Softletter is
now in its 25th
year of
publication

7. Brief Intro: Softletter
Published twice a month
Complete coverage of
every aspect of running Softletter is
a software business now in its 25th
year of
publication
Compensation,
operating ratios, unique
research, timely articles

8. Books by Rick Chapman

9. Softletter
Research Publications
2009 Software as a Service
Marketing Report
2009 Software as a Service Report
Up-to-date information and hard data about software publishers adapting to
SaaS, the issues they face, and the strategies and tactics most likely to
succeed. Covering Product Development, R&D, Pricing, Channels, Sales and
Marketing & Product Management.
2009 Financial Handbook
Contains hard data for: Software industry metrics and benchmarks; Mergers,
IPO’s, and Venture Finance; Compensation; and Operations. For software
companies preparing their yearly business plans and budgets.

10. Softletter
Research Publications
2009 Software Sales and Telesales
Compensation Reports (analyzes compensation
and sales efficiency across desktop/retail, OEM,
on premise, client/server and SaaS application
sectors)

11. Current Surveys of Interest
The 2009 Softletter telesales compensation
survey is currently open covering:
compensation, bonuses, close rates, quota
performance and more
Company types are desktop/retail, OEM, on
premise, client/server, and SaaS
All participants receive summary results in the
upcoming issues of Softletter
Interested? Go to: www.softletter.com

12. 2009 SaaS Industry
Reports Highlights

13. Primary Market for Your Product
* 2007 figures
for B2B were
94%

14. Why Buy SaaS?

15. Most Popular Subscription Options
Bi-yearly
4%

16. % Revenues Grew Over the Last
12 Months?

17. Profitable Over the Last 12
Months?
No
33%
Yes
67%

18. 2009 SaaS Direct Sales
Compensation and Efficiency
Reports Highlights

19. Some Key SaaS Compensation
Metrics
What is the average time it takes Percentage
to close a major sale (On
premise, client/server)?
Less than three months 0%
Three to six months 32%
Six to nine months 21%
Nine months to a year 32%
A year to 18 months 9%
18 months+ 6%

20. Some Key SaaS Compensation
Metrics
What is the average time it takes Percentage
to close a major sale (SaaS)?
Less than three months 23%
Three to six months 40%
Six to nine months 21%
Nine months to a year 11%
A year to 18 months 4%
18 months+ 0%

21. Some Key SaaS Compensation
Metrics
What percentage of your sales Percentage
representatives exceeded quota last
year?
On premise, client/server 30%
SaaS 50%

22. Some Key SaaS Compensation
Metrics
Of the sales representatives that Percentage
exceeded quota, by what average
percentage did they exceed quota
last year?
On premise, client/server 15%
SaaS 25%

23. 2009 SaaS Operations Metrics
Highlights

24. SaaS Operating Metrics
Publicly held SaaS companies enjoy a
distinct advantage in R&D
4% as % of revenue
Enjoy some advantages in sales and
marketing: about 2 - 3% as % of revenues

25. 2009 Marketing Report
Overview
262 companies participated from U.S., Europe,
Eastern Europe, Latin America, Australia and
Far East.
211 questions
22 separate marketing categories covered
Respondents: 90% CEO’s and Senior Marketing
and Sales Executives

26. 2009 SaaS Marketing Report
Overview (cont)
SaaS companies results broken out and
analyzed separately
Results were analyzed and cross tabulated “drill
down” by company size and phase of
development
Detailed look at marketing practices, program
results, trends, and current and forecasted
expenditures. Most comprehensive report of its
kind

27. Research Summary Highlights

28. Most Popular Programs

29. Most Effective Programs

30. Top Programs by Investment

31. www.SaaSUniversity.com
This presentation is available as a free
download at www.saasuniversity.com
Sampler of the 2009 SaaS Report also
available
If you wish to further discuss points raised
in this presentation, please post questions
and observations on the SaaS U forums
You will receive an answer!

32. Softletter’s SaaS University:
Marketing, Selling, Infrastructure, and
Financing, Chicago, June 30-July 2
30 sessions
Five tracks
Four keynotes
Three SaaS workshops

33. Special Aspire Offers
Offer Codes for today’s attendees:
$100 Off the Financial Handbook: ITAFIN100
$150 Off SaaS Report: ITASAAS150
Buy Both Report for $449.00 ($395 Off) go to:
http://store.softletter.com/ProductDetails.asp?ProductCode=Aegis-0037
$200 Off our upcoming Chicago SaaS Conference:
ITA200; go to www.saasuniversity.com
Thank You for attending

34. Softletter’s SaaS University:
Marketing, Selling, Infrastructure,
and Financing, June 3 – July 2

35. Panelist
Richard Dym
Chief Marketing Officer, OpSource
• He has held senior executive positions in fast-paced technology companies
ranging from venture backed start-ups to global public enterprises
• Prior to working with technology and technology-related services companies,
Richard was a Senior Economist with Chase Econometrics, Inc. (a subsidiary of
Chase Manhattan Bank, N.A.)
• Richard also founded Dym, Frank & Company, a quantitative money management
firm.

36. The Business in the Cloud
• OpSource provides complete Cloud operations infrastructure and services for
SaaS and Cloud businesses
• Technical & Application Operations that reduce operational costs
• Business Operations that increase revenues
• Founded 2002, privately held
• Corporate headquarters: Santa Clara, CA.
Global offices: U.S. (Santa Clara; Herndon, VA); Dublin; London; Bangalore
• Unmatched industry experience
• Hundreds of applications
• Millions of end-users
• Billions of transactions every day
Certified
© OpSource 2009 Slide 36

37. Purchasers' Perspective : Is SaaS the Survival
Strategy in this Down Economy?
• The shift to SaaS or On-Demand is inevitable
• The down turn will only accelerate the transition by focusing
purchaser attention on the short term cost advantages of buying
on-demand
• Elimination of CapEx
• Reduction in OpEx
• Fixed to variable cost
• Buying only what you need
• SaaS projected to grow 22X the overall software market (IDC)
• But Cloud noise will add confusion
• Bottom line, more opportunity today than a year ago. Strike
while the iron is hot
© OpSource 2009 Slide 37

38. Carpe Diem: Do it Yourself SaaS Delivery Means
Slow Investment Return
Break Even
Point
Substantial
Upfront
Investment
© OpSource 2009 Slide 38

39. IDC Software Megatrends
Structural Changes Accelerated by the Financial Crisis
• New Delivery Models:
• Software as a Service/On-demand
• Open Source
• e2.0 (social networking, Web 2.0)
• New Architectures:
• Service-oriented Architecture (SOA)
• Event-based
• Unified access to content and data
• New Ways to Source a Business Process:
• Build (mashups, process modeling, business rules, Web 2.0))
• Buy (“good enough” suites vs. best-of-breed)
• Integrate (software/services convergence)
• Outsource (asset-based delivery)
• New Targets:
• SMB (intensifying competition for applications)
• Channels
Source: IDC 2008
• Partnerships (with partner-partner collaboration)
© OpSource 2009 Slide 39

40. IDC: Future Trends (Next 2–3 Years)
• SaaS is evolving, and sticking to a strict taxonomical definition may be
limiting — many ways to approach:
• Pure SaaS versus hybrid SaaS?
• On-premise + subscription? (Teleo, BlackBaud, others)
• Single-tenant? (Oracle, Siebel, many others)
• IDC sees a hybrid combination of software and services as a likely
evolution of on-premise desktop apps with a services component
• Finished apps + callable apps
• The future of application consumption will likely be a hybrid of pure
SaaS, Software+Services, plus a hybrid patchwork of on-premise apps,
custom/verticalized apps, software appliances, hosted AM, etc.
© OpSource 2009 Slide 40

41. IDC Worldwide Software on Demand Forecast:
Regional Segmentation, 2006- 2012
Revenue ($M)
By 2012 EMEA will
be 24% of WW
revenue 54%
EMEA and AP 57%
combined equal 60%
of WW Hosted AM 63%
activity: hosted apps is
a common scenario
41%
After 2010 AP
growth doubles, 2x
speed of NA, driven in
part by mobile Web
•IDC has increased its SaaS growth projection for 2009 from 36% growth to 42% growth over
2008.
•The percentage of U.S. firms which plan to spend at least 25% of their IT budgets on SaaS
applications will increase from 23% in 2008 to nearly 45% in 2010.
© OpSource 2009 Source: IDC, 2008 Slide 41

42. Worldwide Software as a Service Forecast by
Customer Segment, 2006–2012
Revenue ($M)
SaaS spending
grows 4x faster than
“all applications” 50%
spending
After 2009 Large
Enterprise spending
52%
will grow 14% faster
than small and
medium
45%
Overall 2006-2012 CAGR: 33% 40%
Source: IDC, 2008
© OpSource 2009 Slide 42

43. SaaS Firmographics: US Market by App Type
SaaS Apps by App type Approx 12% of
Approx 5% of US, 2007, based on revenue US CRM Apps
US Other Apps
Approx 3% of
Approx 22% of US 6% US ERM Apps
Collaborative Apps
Approx 2% of
Approx 5% of US Approx 4% of US US O&M Apps
SCM Apps Engineering Apps
© OpSource 2009 Source: IDC, 2008 Slide 43

44. © OpSource 2009 Slide 44

45. Questions

46. For more details
Richard Dym
CMO
OpSource
E-mail: richard@opsource.net
Ph. No: +1-408-567-2031

47. For more details
Merrill R. (Rick) Chapman
Managing Editor
Softletter
E-mail: rickchapman@softletter.com
Ph. No: +1-860-663-0552

48. For more details
Janaki Jayachandran
Business Manager – SaaS Specialization
Aspire Systems
E-mail: janaki.jayachandran@aspiresys.com
Ph. No: +91-44-67404000