Cloud based software seems to be everywhere. In reality, according to Synergy Research Group, in 2019 the SaaS market sat in the shadow of on-prem solutions, only making up about 20 percent of total enterprise spending. As the chief revenue officer for Replicated, where we provide software vendors a platform for easily deploying cloud-native apps inside customers’ environments, I’m always looking at the bottom line and working to understand the nuances and trends of successful sales. With that in mind, I’d like to share four ways modern on-prem software delivery can – and will – increase your company sales and how you can leverage this $400B market.
Companies delivering an on-premises option have had an advantage when approaching companies in the verticals of finance, healthcare, pharma, the Department of Defense and more. CIOs and CTOs of companies within these verticals have never fully embraced SaaS. Today, we are seeing a big push toward virtual private cloud as a controlled environment.
However, deploying to any unknown environment can be difficult for a SaaS company – requiring development work on two versions of their application (a SaaS version and an on-premises version). Software vendors need the ability to deliver to any destination irrespective of where the customer wants to go; otherwise, they are forced to make a tradeoff: deliver to a customer-controlled environment or lose a sale.
This also goes for opening up sales opportunities in new geographies. During my time in Asia as CRO for a global multimillion-dollar SaaS vendor, we were precluded from doing business in markets like Korea or China unless we committed to building data centers “in country” – something that just wasn’t feasible without a revenue stream to offset that level of investment. In Europe, GDPR requirements are forcing many companies to rethink how to deliver their applications to many customers.
There are so many different, stringent data privacy and data sovereignty laws that must be followed, and, with modern on-premises delivery, your applications can be delivered in a way that fits the customer’s requirements from a security perspective, while also conforming to regional regulatory guidelines.
If you’re a SaaS vendor, there are a lot of hoops to go through for security and compliance teams in an enterprise sales motion. Most of us have been in positions where a compliance review pops up just as we are working to negotiate and close a deal – resulting in the dreaded “slip” to the next quarter. By delivering an on-premises solution, a software vendor can circumvent a lot of the challenges that can stall deals for months because the end customer has confidence in the security and compliance of the environment they set up and control themselves.
Many software vendors have acquired other companies and technologies over time – and they often have different delivery mechanisms for different products. Some are SaaS while some are strictly on-premises, which makes cross-sell and up-sell opportunities difficult. It can be really frustrating for sales. Having the ability to deliver the full product suite via a modern on-premises approach when requested improves your cross-sell and up-sell of different products by making implementation of multiple products smooth and seamless.
Regardless of how you choose to go after on-premises sales opportunities, this market will continue to grow – and so will the customer roster. If you want to open up new customer and revenue opportunities, offering modern on-premises software delivery options is a sure-fire way to do just that.
Dustin Dean is chief revenue officer at Replicated, Inc.