SaaS Business Model:

A Unique Business Architecture

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Conventional SaaS Definitions

“a model of software deployment

“…software that’s developed and hosted
whereby a provider licenses an application
by the SaaS vendor and which the end user
to customers for
customer accesses over the Internet. ”
use as a service on demand.”
- CIO.com
- Wikipedia

“…subscription based, and all upgrades are

provided during the term of the subscription. […]
is hosted and updated on a central location, and
does not reside on client computers.”
- Utah.gov

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Problem...

Most conventional definitions of

SaaS are meaningless to vendors
and result in industry-wide
misunderstandings and confusion

http://saasbusinessarchitecture.com Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved
Solution...

Stop trying to fit legacy

Eliminate legacy artifacts and
models into a modern
start with what works
model

Clearly delineate SaaS and its Introduce the SaaS Business

defining characteristics Architecture

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SaaS Business Architecture

Intellectual
Marketing
Property
The SaaS Business
Architecture is a Network-
Network centric commingling of
Centricity Marketing, Intellectual
Property, Technology,&
Business Model
Technology Business Model

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Marketing

Unique value proposition for

Inherently Social
both vendor and clients

Reduce barriers to
Self-Service focus
adoption

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Intellectual Property

Core Application Proprietary Functionality

Cannot be the only focus of Create value beyond the

developers core application

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Technology

Self-Service, network-
Single Instance, Multi-Tenant
centric, and ecosystem
in Production
focused

Forking code for one-off

clients breaks the model; Web-native, UI agnostic
inbuilt flexibility is key

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Business Model

Metering, Billing internal to

Inbuilt Revenue Model
Application

Leverages many of the 7 Should be driven by quest

Revenue Streams available for Business Scalability

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7 SaaS Revenue
Streams
Products

Subscriptions Ecosystem

Network
Effect

Services Advertising

Ancillary

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Network Centricity

Producers Consumers

Network
Effect

Ecosystem

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 Get the detailed guide to the
7 SaaS Revenue Streams with examples:

http://saasrevenue.com/7streams.html

If this is a SaaS Revenue Model emergency

put down the mouse and call us:

(972) 200-9317

Copyright© 2009 Sixteen Ventures / Lincoln Murphy. All Rights Reserved