Professional Documents
Culture Documents
By
R
“Ray”
Wang
With
Jeremiah
Owyang
Includes
input
from
57
ecosystem
contributors
Ecosystem Input
The
Customer
Bill
of
Rights:
Software-‐as-‐a-‐Service
(SaaS)
report
could
not
have
been
produced
without
the
generous
input
from
some
of
the
leading
market
influencers
and
the
following
vendors
who
have
shown
a
keen
interest
in
transforming
the
client-‐vendor
relationship.
Please
keep
in
mind;
input
into
this
document
does
not
represent
a
complete
endorsement
of
these
rights
in
total
by
the
individuals
or
vendors
listed
in
this
report.
Influencer Input
Nenshad
Bardoliwalla
Paul
Greenberg,
The
56
Group
Naomi
Bloom,
Bloom
and
Wallace
James
Governor,
Red
Monk
Kevin
Dobbs,
Montclair
Advisors
Erin
Kinikin
Bob
Evans,
TechWeb
Esteban
Kolsky
Dennis
Howlett,
Enterprise
Irregulars
Michael
Krigsman,
Asuret
Phil
Fersht,
Horses
For
Sources
Frank
Scavo,
Computer
Economics
Christian
Gherorghe
Josh
Weinberger,
CRM
Magazine
Vendor Input
Agresso
Informatica
Pervasive
Software
Appiro
Infosys
RightNow
Technologies
Boomi
Intacct
Rimini
Street
Blue
Wolf
Intuit
Salesforce.com
Cisco
Systems
Jive
Software
SAP
CODA
KickApps
SocialText
Demand
Media
Lithium
SoftBrands
Epicor
M-‐Factor
SuccessFactors
Everest
Software
Microsoft
Sugar
CRM
Flexera
Mzinga
Telligent
GetSatisfaction
NetSuite
Tenrox
HelpStream
Oracle
Ultimate
Software
IBM
Panaya
Inc
UserVoice
Infor
Patni
VMWare
Workday
Executive Summary
SaaS
deployments
have
entered
the
heart
of
the
business
and
now
deserve
to
be
treated
with
all
the
rigor
and
due
diligence
of
on-‐premise
licensed
software.
Client
–
vendor
relationships
in
SaaS
are
perpetual
and
it
is
imperative
that
these
agreements
provide
a
chance
for
a
new
slate.
CIO’s,
CMO’s,
LOB
execs,
procurement
managers,
and
other
organizational
leads
should
ensure
that
the
mistakes
they
made
in
licensed
software
aren't
blindly
carried
over.
The
SaaS
Bill
of
Rights
(SaaSBoR)
provides
a
tool
for
clients
and
vendors
to
change
the
tenor
of
contract
negotiations
from
subservient
user
to
equal
and
collaborative
partnership.
Figure
1.
SaaS
Deployment
Delivers
7
Key
Benefits
Source:
Altimeter
Group
September
2009
SaaS
Benefits
Survey
of
91
end
user
clients
and
vendors.
1. Richer
user
experience
and
user
productivity.
Newer
technologies
enable
more
engaging
and
easy-‐to-‐use
interfaces.
Solutions
often
designed
with
a
role
based
perspective
in
mind
result
in
minimal
training.ii
2. Rapid
IT
implementation
and
optional
higher
quality
deployment.
The
duration
of
the
technical
implementation
phase
moves
from
months
to
weeks.
Customers
can
demo
a
product,
move
to
sandbox,
and
train
in
days.
Organizations
now
have
the
option
to
redirect
their
budgets
and
resources
to
improve
business
process
and
configuration
instead
of
fighting
integration
and
deployment
quagmires.
True
SaaS
solutions
do
not
require
individual
installs,
instead
they
leverage
the
SaaS
environment.
3. More
frequent
cycles
of
innovation.
SaaS
vendors
update
their
solution
between
2
to
4
times
a
year.
With
current
Agile
development
methodologies,
some
vendors
iterate
in
months.
Customers
gain
access
to
latest
features,
bug
fixes,
and
regulatory
updates
at
a
quicker
pace.
In
many
cases,
organizations
turn
to
SaaS
to
access
innovation
and
capabilities
not
provided
by
incumbent
on-‐premise
vendors.
4. Minimal
upgrade
hassles.
Users
no
longer
have
to
worry
about
a
flurry
of
bug
patches,
fixes,
and
the
endless
testing
cycles
required
to
validate
changes.
Business
processes
impacted
by
regulatory
changes
such
as
financial
closing
and
hire
to
retire
benefit
the
most
from
easier
consumption
of
updates.
Content Protected Under A Creative Commons Attribution-Share Alike License 3.0
Figures
©2009
R
Wang
&
Altimeter
Group
LLC.
All
rights
reserved.
Reproduction
by
request.
Published by Altimeter Group, LLC. | 1855 South Grant Street, Suite 100 | San
Mateo, CA 94402
www.altimetergroup.com
6 Customer Bill Of Rights: Software-as-a-Service
5. Access
to
the
“always-‐on”
SaaS
tools
regardless
of
location.
Office
workers
can
now
access
these
SaaS
tools
anywhere
they
go.
These
consumer
tools
often
have
rich
mobile
experiences
–
often
far
ahead
than
providers
in
the
on-‐premise
space.
6. Subscription
pricing.
SaaS
solutions
have
adopted
subscription
or
utility
pricing
to
spread
out
payments
over
time.
The
shift
from
capital
expenditure
(CapEx)
to
operational
expenditure
(OpEx)
frees
up
funds
for
other
projects.
Business
users
can
swipe
and
buy
without
going
through
complicated
procurement
processes.
During
recessionary
times,
subscribers
only
buy
what
they
consume,
stretching
their
investment.
Many
contract
terms
have
also
moved
from
yearly
to
monthly
increments.
7. Anytime
scalability
and
dynamic
capacity.
Scalability
enables
customers
to
streamline
cost
per
additional
user.
Clients
can
flex-‐up
or
flex-‐down
on
usage
without
incurring
spikes
in
variable
costs
such
as
hardware,
staffing
resources,
and
license
costs.
• Contract
third
party
advice.
Clients
should
retain
the
right
to
engage
a
third
party
advisor
in
vendor
selection,
contract
negotiations,
and
independent
verification
and
validation
(IV&V).
Vendors
should
not
try
to
prevent
clients
from
seeking
such
advice.
• Software
escrows.
Clients
should
expect
vendors
to
provide
the
option
to
access
a
competitive
provider
of
their
choice
who
serve
as
custodians
for
source
code,
user
data,
application
executables,
and
related
documentation.
Mutual
agreement
should
be
determined
on
frequency
of
backups
and
updates.
Hot
backups
should
be
made
available
for
disaster
recovery
scenarios.
Vendors
reserve
the
right
to
charge
for
software
escrows.
• Integration
and
API
support.
As
organizations
make
the
shift
from
on-‐premise
to
cloud-‐based
deployment
options,
vendors
must
deliver
key
access
to
public
API’s,
web
services,
and
other
integration
tools
to
support
hybrid
deployment.
In
some
cases,
integration
will
revolve
around
business
processes
such
as
order
to
cash,
campaign
to
lead,
and
incident
to
resolution.
• Data
quality
support.
While
a
vendor
cannot
guarantee
the
quality
of
data
being
put
into
the
system,
tools
should
be
provided
to
address
both
a
sourcing
and
day-‐to-‐day
processing
perspective.
These
tools
ensure
short-‐term
and
long
term
efficient
processing.
• Price
protection
options.
Clients
and
prospects
should
be
given
the
opportunity
to
lock-‐in
increased
consumption
guarantees
or
seek
price
increase
protection.
Vendors
should
provide
the
discount
rationale
and
clearly
state
the
pricing
bands
for
each
bulk
increment.
Clients
should
be
able
to
move
between
bands
at
defined
periods
of
time.
One
option
–
provide
for
a
collar
where
user
counts
can
fluctuate
up
or
down
by
25%
over
six
months
or
a
year
at
the
same
unit
price.
Vendors
should
be
able
to
set
minimums.
• Affiliate
usage
assignment.
Customers
should
be
able
to
provide
access
and
usage
of
the
software
to
majority
owned
affiliates.
Customers
and
vendors
should
determine
how
to
treat
usage
assignment
with
other
related
organizations.
• M&A
scenarios.
Clients
should
be
given
the
option
to
combine
contracts
to
achieve
higher
discount
levels
or
tiers
during
mergers
and
acquisitions.
In
cases
where
the
software
will
no
longer
be
use,
limited
access
licenses
should
be
provided
to
access
pre-‐merger
files,
compliance
requirements,
or
historical
trending
data.
SaaS
vendors
should
provide
an
option
for
clients
to
flex-‐down
usage
or
terminate
during
divestitures.
Vendors
may
also
provide
an
option
to
apply
credits
to
the
new
entity.
• Multiple
support
options.
Customers
should
be
given
more
than
one-‐size
fits
all
support
options.
Options
should
provide
tiering
in
pricing
and
service
levels
that
correspond
to
actual
usage.
• Install
base
transparency.
Vendors
should
inform
customers
when
multiple
installations
have
been
deployed
at
a
company.
Clients
should
be
able
to
access
information
about
usage
by
users
to
determine
if
they’ve
purchased
shelf
ware.
• On-‐going
performance
metrics.
Clients
should
expect
a
trust
site
to
monitor
service
level
agreements.
Vendors
should
provide
at
least
a
monthly
report
on
key
availability
and
continuity
metrics.
• Ensuring
adequate
client
side
resources
to
succeed
in
deployment.
Clients
must
bring
to
the
table
executive
sponsorship,
adequate
funding,
appropriate
resourcing,
and
strong
project
management.
In
cases
where
clients
decide
to
self-‐implement,
they
should
have
the
vendor
or
third
party
assess
their
capabilities
to
collaborate
towards
a
successful
implementation.
• Paying
invoices
on
time
and
in
full.
SaaS
vendors
deliver
solutions
24/7.
As
with
utilities,
they
will
not
immediately
turn
off
service
for
late
payment.
However,
clients
should
pay
invoices
on
time
if
they
expect
their
SaaS
vendors
to
keep
the
lights
on
and
stay
in
business.
• Partnering
with
their
vendors
to
ensure
their
long-‐term
viability.
Clients
can
add
complexity
and
cost
into
the
cycle
when
they
try
to
prove
how
smart
they
are
during
contract
negotiation.
Excessive
use
of
large
penalties,
price
caps,
and
other
"you
can't
fool
me"
items
often
create
an
adversarial
relationship
right
from
day
one.
Clients
should
hold
to
their
rights
and
objectives
but
keep
in
mind
the
potential
long-‐term
nature
of
SaaS
relationships.
• Maintaining
ongoing
communication.
Clients
often
expect
SaaS
vendors
to
respond
immediately
to
requests.
Clients
should
also
respond
to
SaaS
vendors
in
a
timely
manner.
If
an
issue
is
addressed,
clients
should
communicate
whether
or
not
the
solution
succeeded
or
failed.
Clients
should
anoint
a
dedicated
resource
to
maintain
this
level
of
dialogue
with
the
vendor.
• Acknowledging
changes
in
scope.
Customers
need
to
accept
responsibility
for
major
changes
in
scope
that
differ
from
an
initial
product
and
implementation
plan.
Clients
should
review
changes
and
compensate
vendors
for
changes
that
materially
impact
delivery
dates,
resource
allocation,
and
overall
cost.
• Serving
as
a
client
reference.
Clients
should
be
open
to
share
honest
feedback
with
prospects
and
other
clients
about
their
experiences
with
the
solution
and
the
vendor.
Where
possible,
clients
should
engage
in
the
ecosystem
by
taking
a
reasonable
number
of
press
calls,
prospect
calls,
and
speaking
opportunities.
Vendors
should
not
abuse
this
privilege.
• Providing
feedback
into
product
roadmaps.
When
given
the
opportunity,
clients
should
take
the
time
to
provide
input
into
the
future
direction
of
products,
markets,
and
other
investments.
Clients
should
help
shape
the
direction
of
how
that
feedback
is
defined
and
provide
input
on
the
success
or
failure
of
that
solution.
Recommendations
Put The Best Practices From SaaSBoR To Use Across The
Organization
While
SaaS
may
appear
to
be
a
short-‐term
fix
to
the
lack
of
timely
innovation
and
ownership
expense
structure
brought
on
by
many
on-‐premise
vendors,
organizations
should
view
this
as
key
pillar
in
their
overall
enterprise
strategy.
The
proliferation
of
SaaS
deployments
will
require
CIO’s,
business
leaders,
and
sourcing
and
vendor
management
teams
to
work
more
closely
with
each
other
to
deliver
flexible
guidelines
in
the
adoption
of
SaaS
solutions.
Consequently,
the
Altimeter
Group
suggests
the
following:
• Use
the
SaaS
Bill
of
Rights
to
bring
IT
and
business
teams
together.
Walk
through
the
best
practices
to
establish
future
SaaS
procurement
policies.
CIO’s
can
give
use
the
SaaS
Bill
of
Rights
to
establish
frameworks
for
business
units
to
speed
up
the
vendor
selection
process.
• Include
the
SaaS
Bill
of
Rights
in
SaaS
evaluation
and
selection
criteria.
Utilize
the
rights
as
a
starting
point
in
establishing
a
long
term,
productive
client
–vendor
relationship.
The
SaaS
Bill
of
Rights
should
be
a
starting
point
for
discussions.
Clients
should
also
keep
in
mind
their
responsibilities
as
a
client
in
the
relationship
• Expand
the
rights
to
meet
organizational
requirements.
The
SaaS
Bill
of
Rights
provides
a
starting
point
for
your
contract
negotiations
and
establishment
of
a
long-‐term
client-‐vendor
relationship.
Organizations
should
expand
on
rights
that
apply
to
specific
industries,
geographies,
and
regulatory
conditions.
• Join
the
SaaS
Bill
of
Rights
ecosystem.
Altimeter
Group
has
put
together
a
series
of
community
tools
including
a
linked
in
group
to
continue
the
discussion.
New
rights,
your
experiences,
and
feedback
can
be
contributed
on
the
SaaS
User’s
Bill
of
Rights.
Resources
Community
Join
the
Customer
Bill
of
Rights
ecosystem.
Altimeter
Group
will
be
continuing
the
discussion
via
webinars,
social
conversations,
and
events.
LinkedIn:
http://www.linkedin.com/groups?home=&gid=2322509&trk=anet_ug_hm
http://bit.ly/ctuGL
Twitter
Hashtags
#SaaSBoR
http://twitter.com/#search?q=SaaSBoR
About Altimeter Group
Altimeter
Group
is
a
strategy
consulting
firm
that
provide
a
pragmatic
approach
to
emerging
technologies
to
companies.
We
have
four
areas
of
focus:
leadership
and
management,
customer
strategy,
enterprise
strategy,
and
innovation
and
practice
Footnotes
i
Saugatuck
Technology,
Gartner
Group,
IDC,
and
Forrester
have
shown
similar
SaaS
adoption
rates
in
2009
research
reports
and
surveys.
ii
Ten
elements
drive
the
move
to
more
social
enterprise
apps.
Many
SaaS
vendors
already
exhibit
these
qualities.
View
the
August
24th,
2009
blog
post
“Monday’s
Musings:
10
Essential
Elements
For
Social
Enterprise
Apps”
http://bit.ly/130WiO