Feature: secrets of selling SaaS

It used to be that the first step an accountant took when setting up a practice was to spend about $25,000 on MYOB’s practice management software, a server to run it on and terminals for staff to access it. “That’s well before they’ve even got their first client,” says Paul Meissner [inset], chartered accountant at Five Ways Chartered. “It was blowing my mind.”

Instead Meissner turned to the cloud for a cheap, easy solution. He didn’t call someone for IT advice – all it took was to jump online and start watching feature videos on vendor websites, sign up for trial accounts and put each application through its paces.

There was no reason to trust anyone else to make the decision for him when he could evaluate solutions firsthand. “It was the amount of choice, the sheer quantity of solutions out there, and that you could choose the one that best suited your business,” he says.

The accountant ended up going with Box.net for document management, an ISP for email service and a custom CRM hosted by a local developer. Now he is considering moving his email to Google Apps. Meissner says he appreciates the ability to work from any location or on the move through his smartphone and iPad. He didn’t bother renting an office for the first couple of months until he had started generating cash flow.

This snapshot of the birth of a small business ought to give pause to resellers selling servers. Several years ago cloud technology passed the point at which it was considered stable and reliable enough to be used as the primary option for business.

These days it is getting harder to make the case for on-premises servers for a new company. Increasingly, established companies will start to question the return on investment from a $5000 server every four years instead of receiving the equivalent in software-as-a- service (SaaS), which delivers the application without the headache of owning the hardware.

In response to the take-up of SaaS, some resellers are transitioning to selling cloud services through an annuity-based business model while growing number of new resellers are popping up to meet the demand. Craig Deveson was one of the first to sell SaaS in Australia when he launched Google enterprise reseller Devnet. Deveson sold Devnet last month to Cloud Sherpas, one of the largest global cloud integrators, for an undisclosed sum.

He says the Australian SaaS market has changed since June 28 with the launch of Microsoft Office 365. “The Australian SaaS market has been validated by people like Microsoft formally entering with Office 365,” Deveson says.

Leigh Kelson was one of the first on the scene when SalesForce. com reached Australia in 2004. The entrepreneur, advertising salesman and marketer had left behind a successful TV promotion venture in Perth and Queensland to set up a marketing consultancy and had come across an industry in need of help.

Kelson found that car dealers weren’t able to do any marketing because they didn’t have reliable data on their customers. He was introduced to the cloud CRM when SalesForce.com was rolling out its partner program and immediately saw the potential. “It’s delivered by the internet, there are no servers, there’s no IT, the business owns the technology and it was all leads, opportunities, campaigns – the vernacular was all there. I become a partner immediately,” he says.

Kelson was less interested in IT for its own sake than the advantages of marketing automation. Customers were telling him that their advertising didn’t work any more, and that in the new world of permission- based marketing they needed to collect email addresses but didn’t have the means to do it with.

“I saw that we could map out the processes for an email campaign and nurture those customers. To do that you need some sophisticated systems with workflows and manage the contact information. SalesForce.com has all that functionality built into it.”

The marketing space became congested with competition so Kelson asked himself what other things could the company build and which business processes could it automate that were larger than the marketing realm.

Fast forward seven years and PRM has grown to a total of 26 staff and a new identity as a software developer on Salesforce. com’s platform-as-a-service (PaaS) Force.com. 

The company consists of eight senior business analysts based in Brisbane, Melbourne and Perth. “They all have a broad experience in being able to build and analyse requirements for business processes,” Kelson says. The rest of the staff are technical services developers working exclusively on the Force.com platform.

Kelson estimates 60 percent of work is developing applications on Force.com and 40 percent is more traditional salesforce automation projects on SalesForce.com.

“Certainly we’re doing more and more Force.com work,” he says.

PRM has made applications for customers to promote on the Force.com application store App Exchange such as Total Check. Total Check was built for Sensis and validates contacts in SalesForce.com by finding their details in the White Pages and Australia Post databases.

Sensis offers Total Check on Force.com free, charging a tiered fee for the number of records validated.

“That’s the sort of stuff that we love building,” Kelson says. One of the first organisations to use Total Check was the Cancer Council of Victoria, which signed up data collected through its helpline. “We’re not out there selling [the application], we got paid to build the app,” Kelson says. “It’s a way [Sensis] can get into the SalesForce.com customer base to sell their web services”.

Recently PRM has concentrated on the mining sector, which Kelson says is “drowning in spreadsheets” and is a ripe market for cloud applications to automate business processes.

To that end PRM has just launched Micloud.com, a Force.com risk- management application that co-ordinates logistics and mobilisation of workforces on large-scale construction sites.

An example was the huge train being built by Rio Tinto as part of the $40 billion Gorgon LNG project being built off the coast of Western Australia. “They [Rio Tinto] are mobilising 10,000 trade skilled workers,” Kelson explains. “Those people need to be compliant, they need to have their skills verified, have their medical (examination) and go to induction training”.

DMSBT was one of the first partners in Australia to join the Google Enterprise program, and when it took up Google Maps in 2007 it went on to become the biggest Maps partner in the Asia Pacific. The opportunities for Google Maps turned out to be far larger than plotting the location of stores on a website, says Herman Leung, director of enterprise operations. “It’s about looking at the use cases. One of the secrets of the Google products is that they can be used in any business.”

Logistics companies have used Google Maps for asset tracking, and franchises have plotted customer concentrations to determine where to open stores.

DMSBT’s work ranges from development, consultation and support of Google Maps implementations, some of which can be quite complex depending on the systems it integrates with, Leung says.

As one of the pioneers in the Google cloud, DMSBT has been compelled to train technical staff. Darragh Murphy, a computer systems graduate from Ireland who joined recently, says that while it has been a pretty steep learning curve, Google has tried to make it a smooth process.

“The Google products are all based around common technology and adapting to them is relatively straightforward. Google provide extremely well-documented APIs and the documentation in general is pretty extensive. It allows us to speed up the development process,” Murphy says. 

Murphy, who has a masters in mobile technology, has been helping develop mobile implementations of Google Maps. The latest version automatically provisions a mobile version so most of the customisation is around improving ease of use.

“A lot of companies are obviously identifying the benefit of having a mobile platform especially with the introduction of multi-touch surfaces,” Murphy says. The PC interface included more information – store locations, opening times, routing and directions, information bubbles and filters. Mobile interfaces had to be rethought with bandwidth consumption and screen size in mind.

Customers often think of geographical data as complementary to the text on a web page, and want a small map on the side of the screen, Murphy says.

“We like to lead them into the flip side of that so the users can find content they’re interested
in more easily depending on the specific location, as opposed to textual and then having a graphical representation of that textual data.”

More recently DMSBT has added Google Apps to its portfolio, which the cloud integrator sells to all types and sizes of customers, from five to 5000 seats. DMSBT focuses on the smaller end of town, les than 1000 seats. “We see that space as having a lack of focus from some of the other partners in this space. They’re after the trophy deals.”

The upside of smaller companies is they are more agile and nimble which leads to faster deployments.

DMSBT sells Google Apps by showing how it removes the operational headaches of owning your own servers. “Why don’t you streamline your business, forget about infrastructure, servers and maintenance, and worry just about running and growing your business?” Leung says. 

DMSBT sells several services other than migration and consulting including change management. “If you interview anyone that had issues with a mass migration it would be because they focused on the actual migration part and not considered everything that’s gone on around it,” Murphy says. “Training users and change management is the most important part of a successful migration”.

Given that teaching a customer’s employees the new ropes of Google Apps is more important than the migration, were technicians the right people to lead training?

Leung says he considered getting more professional trainers who didn’t come from an IT background but found that a technical understanding of the product was essential.

“There are always going to be a couple of unique queries from people who are used to having a different system and wondering how they replicate those functions. We found that you can get the professional trainers in but the actual level of knowledge transfer is limited because they’re just following the script.

“We prefer getting consultants like Darragh who can actually talk the lingo in terms of technical and user experience to provide that change management.”

Murphy says that typically the biggest hurdle for companies is migrating from Microsoft Office to Google Docs, which has a comparatively simple interface compared to the feature-rich, beribboned Office.

Another stumbling block is the abolition of version control. There is no need to email versions of the document among colleagues with Google Apps. Instead, Google Docs encourages users to “It is sometimes a mindblower, that you can have people using the one document at the one time,” Murphy says.