Software in the era of Outcome-as-a-Service and the top benefits of SaaS
With the recent launch of the Blue Planet Enterprise Automation Suite (BPE), Paul McCluskey, Vice President, Blue Planet, offers his perspective on the trends and key business outcomes that SaaS provides to organizations purchasing technology.
The verdict is in, and the evidence is compelling: organizations have shifted away from purchasing traditional technology licenses in favor of as-a-Service subscriptions. Consider the data from TSIA showing this shift in the T&S 50 index* (see Figure 1); organizations are spending more on technology services than products—a shift which is especially surprising when you consider that services are traditionally attached to product sales as a smaller percentage of the overall purchase. The lines crossed about 8 years ago and the trend has been gaining momentum ever since.
*The TSIA T&S 50 index tracks the aggregate financials for the world’s largest technology and tech services vendors.
Figure 1. TSIA T&S Index
For technology vendors like Blue Planet, this shift to recurring revenue models provides compelling business advantages. More importantly, this trend continues to accelerate due to the compelling advantages that customer organizations are gaining from the shift – most of which can be summed up in the single idea that organizations are much more interested in purchasing outcomes than technology. SaaS provides a better set of business outcomes for organizations purchasing technology, including these top benefits:
1. Utilize OPEX rather than CAPEX budgets
Organizations shifting to SaaS purchasing avoid significant up-front costs and capital outlays to gain financial advantage in using OPEX budgets. The benefit of multi-year IT budget cycles are effectively accelerated because the robust capabilities needed now across your entire ecosystem can be used immediately, while the payments are stretched into the future in monthly and yearly payment schedules.
2. Improve outcomes with cloud-powered benefits
Many IT teams these days have initiatives to reduce technical debt in their deployments. Moving to cloud-hosted technology helps to avoid and reduce this debt: rather than standing up new server and storage infrastructure to run software, SaaS enables teams to leverage software maintained in the cloud on their behalf so that they can spend their time on utilizing the software and enjoying its benefits.
3. Accelerate outcomes with agile feature releases
Using software in the cloud means that new capabilities can be delivered without waiting for the next major release: agile feature maintenance can be frequent without disrupting your operating environment, and without having to wait for scheduled server reboots. How frequent? Our Blue Planet software is updated with new features as frequently as twice a month to ensure a constant expansion of network device support, along with new automation, alerting, and reporting functionality. This means we can respond quickly to new feature requests from our customers.
4. Optimize costs with pay-as-you-grow, matching payments to consumption
SaaS enables teams to start small and grow larger over time, and to optimize costs by paying for only what they use. Sometimes described as a “true consumption” approach, this type of billing ensures that customers are paying only for the value that they receive – rather than paying for software that is never used. Blue Planet offers SaaS priced on a per device basis, billed per month – and this type of granular pricing enables precise match of IT cost to benefit for our customers.
With SaaS month-to-month consumption billing, the flexibility to contract use as well as to expand is part of the benefit. Consider organizations which experience variable cash-flow based on their type of business – for example, hotels with room occupancy, hospitals with bed occupancy, or large venues with ticket receipts. Having the flexibility to fluctuate payments of network management according to need means being able to maintain business profitability through variable business cycles.
5. Normalize IT expenses
In addition to flex payment schedules, organizations can also elect to commit in advance to standard monthly billing schedules. Blue Planet offers a price incentive when our customers make this type of purchase. Committing in this way also establishes a normalized monthly budget for IT which is easier to plan year to year without the variability that comes with CAPEX license purchases. Normalizing IT expenses helps to simplify business profitability analysis, eliminate the hidden costs of IT budget planning, and lower the stress on teams associated with acquiring and renewing technology infrastructure.
6. Lower your risk of making the wrong technology purchase decision
SaaS can be especially advantageous for small and mid-sized enterprise businesses because software designed for global-scale organization can now be made accessible and affordable. Easy try-before-you-buy trial usage makes it possible to experience the software within your own environment, to see how it will deliver before you purchase. Also, if the software does not perform to deliver the outcomes you expect, your team can discontinue use without any commitment. Effectively, this means that vendors like Blue Planet are now fully sharing the risk with our customers that the software we provide will produce real outcomes – otherwise, without outcomes, our customers will not continue to use the software.
To learn more about how the Blue Planet Enterprise Automation Suite delivers an Outcome-as-a-Service experience for your network, see our Blue Planet Enterprise site. Get started by requesting a free trial to see how BPE can lower your costs, streamline your operations, and help to optimize your network performance.