Who do you think has been most affected by the rise of cloud computing over the past few years? The growth of SaaS has brought changes in technology and business processes across the board for service providers, developers, users – and ISVs.
Innovative ISVs have been using SaaS to exploit new opportunities, add value to their business, enter new markets and regions, expand, and essentially bring in more revenue. All these can be achieved by exporting applications.
However, it also requires strategic planning and there are many challenges and opportunities which need to be addressed. Is a SaaS move the right move? How should one go about it?
SaaS can be developed faster than other applications, and it is inherently scaleable and flexible – meaning the value can be far higher. Exporting SaaS can enable an ISV to expand rapidly in new global markets, allowing the creation of an entirely new value proposition as well as subscription-based business models.
Entering new markets can be daunting, costing more time and other resources if not done correctly. Principally, it is a new business opportunity and should be treated as such.
It requires a new business plan – but this can often be overlooked – incorporating a basic assessment of how to deploy elsewhere or whether it will just be an extension of existing processes.
The first stage is to assess and understand the financial risks and rewards, getting a clear idea of budget, RoI and fixed cost. Choose the right target markets and assess existing products carefully to see where you could go next, taking advantage of existing domain expertise where possible.
This plan will help to determine which markets offer the greatest potential. A thorough territory assessment should be carried out to learn about one's potential competitors and any gaps in the market.
Locally tailored messaging will be required; one must not assume there will be no cultural or language differences. Business leaders must embrace international business etiquette – such as learning about the appropriate greetings in various parts of the world. ISVs must also take care to consider various and targeted approaches.
Similarly, there may be distribution limitations in different locations, so supply and support must be considered. This could have a great impact on competitiveness, as speed of delivery is essential.
Furthermore, there will be new regulations to consider. Compliance issues can really trip up a global expansion project if not understood, creating a barrier to product deployment. And then different price points will likely be required based on demand, maturity and so on.
Vendors will also want to target the influencers and buyers specifically, and there are likely to be dramatic regional variations here too. Some markets may be much harder to influence.
An understanding of how buyers in the market acquire products and services can be important when mapping out a completely new set of influencers; there may even be whole new groups of influencers who are essential to the new markets.
Extant competitors may have an advantage in terms of local knowledge, customer support, know-how and experience. It is crucial to consider every possible aspect before moving forward with a project.
This is perhaps why we are seeing many legacy apps stuck on outdated systems that aren't delivering the best output. Also look at where these competitors have succeeded in various markets and what does and doesn't work for them in different markets.
It is sometimes possible to learn from early mistakes that others have made – ensuring avoidance of the same traps.
Alongside these external factors, it's crucial to internally examine product readiness. This means looking at its stability, language, compliance, and so on.
It is notoriously difficult to think objectively and take a step back from anything you are close to, but issues must be corrected before moving any further with an export project.
Interim management and outsourcing are also key considerations. Does the exporter want to sell direct or indirect through partners, and are full or part-time staff required?
Consultancy firms specialising in international expansion, government organisations and local resellers can also provide insight. Through these conversations, new considerations specific to products may arise which would have otherwise been missed.
As in any new venture, the key is in the planning; failing to prepare is preparing to fail.
Mark Armstrong is EMEA vice president and managing director at Progress Software
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