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SaaS offerings create substantial advantages for customers compared to traditional software delivery driving the strong growth in global spending on SaaS applications. Total global spending on SaaS applications is expected to grow strongly with an average growth rate of 15% in the period 2019-2022. Gartner expects SaaS to be 45% of total application software spending.  Offering SaaS also provides substantial financial benefits for the software companies which translates into significantly higher valuation of software companies with a SaaS business model.

Dowload the whitepaper as pdf here.

Formulating and executing a SaaS business model transformation basically consists of answering three questions, the Why, What and How:

• To better understand the necessity and the appropriate speed of a business model transformation, it is important to understand how your customers and competitors are evolving, how fast your industry will be disrupted and what the economic parameters are that drive the change.
• If the answer to the previous questions implies that a transformation is a prerequisite for success, the second question to be addressed is what part of the business to transform. Typical questions to answer include: what are the key value drivers of a SaaS business model, what is the appropriate customer experience strategy to be successful, what is the appropriate operating model to deliver the service and what is the economic impact of the change?
• Now that a clear decision on what to do to be successful has been made it is time to decide on how to transform by answering how to balance the risk and speed of the transformation, how to acquire the resources and capabilities to execute the business model and chose between developing in-house and buy or partner.

There are different SaaS business models which can be distinguished. These models address different customer pain points and the customer experience strategy needs to be adapted accordingly. To optimize the enterprise value of a SaaS business model, it is paramount to understand the key value drivers of a particular business model and its levers to pull. Choices made have ramifications for the different operating model elements such as in product development (e.g. from waterfall to agile with continuous release cycles), and change in financial reporting.

To successfully transform towards a SaaS business model a company should decide on the appropriate implementation speed and whether to make or buy elements of the operating model. Should the entire organisation transform to the new business model, or is it better to set up a greenfield organisation? Should capabilities be developed in-house or acquired in the market? The choices drive the product and technology roadmap and the M&A strategy of the organisation and eventually the success of the transformation.

If you want to know more about how to execute a successful SaaS business model transformation, please dowload the whitepaper as pdf here.

Please do not hesitate to contact us in case you want discuss how JBR can support you in your journey towards a successful business model transformation, help acquire or finance digital capabilities as well as advise you on optimizing the value creation of your business.