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Savile Row SaaS: Here’s what you need to know about new ways of consuming software


exec in suit HP20140217678.jpg


The way enterprises buy software is changing. I’ve written before about how HP is innovating to give customers choice in the way they consume software. (We also cover this topic in our new ebook, Deliver business value.) In HP Software Professional Services we advise customers on which model best suits their particular need: software as a service (SaaS), on-premise, or managed service. Each has its pros and cons, depending on your environment and the business need you’re addressing.


But look out just slightly into the future and we see that the changes wrought by SaaS—in particular the shift it enables IT to make from CapEx to OpEx—are going to have longstanding ramifications. We’re moving to a world where customers are looking to pay for what they use, and pass that model down to their business customers. Software consumption models are changing, becoming increasingly customizable and flexible.


What do these changes mean for you, and how can you best exploit them for the overall value you bring to the business? Here are two key considerations.


1. Financial metrics take on increasing importance

You have an opportunity to drive significant change through the organisation with a pay-per-use model. But this depends on having some level of financial tracking at the service level to understand the impact your choice of SaaS vs. on-premise has on your service cost. To be successful, you need to:


  • Understand your service cost so you know what you’re going to charge internally
  • Have your service catalog in place so your organisation can understand what your cost-per-service is
  • Communicate back to the business how much you’re saving and how this new model is helping to meet business goals


2. The overall business problem doesn’t change

Whether you are using a pay-per-use model or a traditional software license, don’t lose sight of the overall business problem you’re trying to solve. No matter what your consumption model is, you still need to:

  • Consider the impact to the organisation
  • Address end user adoption to ensure ROI
  • Measure the ROI in business terms

For example, say you need to address incident management, and you want a SaaS solution like HP Service Anywhere with the goal of cutting down the number of tickets, automating responses, and so on. But whatever model you choose, you still need to ensure your organisation has the right approach to reducing incident management costs and reducing tickets. And this is where HP Software Professional Services has the people and process expertise to help. Don’t let the novelty of pay-per-use overshadow your strategy.


In my next two blog posts I’ll write about signs that you might need a more customised solution—for example, pay-per-use or outcome-based services—as well as the success factors for deriving the most value out of the new models.


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