Even with the global economic recession, the SaaS (Software-as-a-Service) market has been growing at a healthy rate over the past few years. This growth is being driven in large part by customers’ need to reduce total cost of ownership. This provides plenty of opportunity for software vendors to deliver customer value.
A recent Gartner study showed the SaaS market still growing at a very healthy 20% rate from 2010 to 2011, reaching $12 Billion in 2011, with North America about two thirds of that, and growing to over $20 Billion by 2015. Forrester Research is even more optimistic, putting the global SaaS market size at $21 Billion in 2011, with projections to grow to over $90 Billion by 2016.
A study last year by InformationWeek Analytics found about 60% of companies are using SaaS solutions today.
Currently, the leading platforms for mobile app developers are iPhone and iPad (ie, iOS devices) and Android smartphones and tablets. As a developer of mobile apps, do you choose one platform to focus your app development efforts on, or do you support both? And what about the other mobile platforms such as Microsoft’s Windows Phone 7, and BlackBerry?
In making that decision, do you look at which platform has the largest installed base? Or do you go by which platform is currently shipping the largest volume of units? Or what about which platform has the highest overall in-app usage time? The answers vary drastically depending on how you frame the question.
Most of the published data on mobile share focuses on platform market share, which shows a rapid increase of Android compared to iOS. However, an article published by Business Insider in March instead considered the amount of actual time spent online as a proxy for app usage, which paints a very different picture with iOS clearly dominating.
The rapid rise in Android smartphone market share compared to the iPhone is clearly indicated in Silicon Alley Insider’s chart of the day from November 2011 which shows Android smartphones at 52.5% of the market, while iOS is less than 20%.
At first glance, this type of data may give a developer of mobile apps pause: Should one be prioritizing an Android version over iOS or vice versa?
With all the talk of platform market share, what many of us forget is that the relevant question is the market share of mobile app usage time. After all, that is what users will ultimately pay the app developer for. Silicon Alley Insider’s chart of the day from March 13 2012 instead tells the real story of Android versus iOS.
The chart from ComScore shows the digital traffic market share of connected devices by OS in the US – it’s a very different story than what’s told by the device platform market share where Android shipments are now dominating. When you look at it by digital traffic – the actual mobile Web usage – the picture changes, with iOS dominating at 60% and Android far behind at only 32%. Similarly, Net Applications finds iOS has a 4.4x larger web share than Android. On top of that, a number of studies have also found that iOS users are much more likely to pay for apps or make in-app purchases. On average, developers make 6x more on iOS apps for the equivalent app.
This data seems to clearly indicate that the first platform of choice for a mobile app should still be iOS.
So if you develop mobile apps, what choices do you make? Please vote in our poll:
It’s now 2012… do you have an updated business plan or marketing plan to address the new decade?
If you’re a software company, the industry is changing with the move to SaaS, mobile apps, outsourcing and other trends. It’s important to make sure you have a current business plan to make sure you’re positioned to take optimal advantage of these changes.
Check the links to the right, and take advantage of our SaaS business plan template, or the Software Company business plan template, and get started optimizing your business today!
Check out this new case study on Quest Software’s transition from being a licensed software company to a SaaS firm. You have to have Gartner registration to access it, but if you do you can find the case study at www.gartner.com.
Quest moved to a SaaS-based log management offering. Their SaaS case study shows how significant the impact of moving to SaaS can be across the entire software business.
If you can’t access the Gartner case study, Microsoft also published their own case study about Quest Software’s move to SaaS earlier this year.
Here’s a quick summary of a few recent articles and blog posts worth reading, covering topics from influencing the B2B buy cycle, SaaS sales compensation, and what works in online marketing:
If you’re moving to an enterprise SaaS model, then how to update your sales compensation plan might be on your mind. In that case, this recent blog post by Joel York at Chaotic Flow on “SaaS Sales Compensation Made Easy” may come in handy. Just remember that for SaaS you really need to focus on keeping customer acquisition costs (including costly sales comp) as low as possible – only use direct sales force when you really need it.
For small/medium software companies, what are the best marketing strategies? Of course, that does depend on your market segment.. but there are still some key strategies that make sense for almost all software or services firms:
How useful is competitive analysis? As Michele Linn points out in her latest post “Five Key Questions Your B2B Competitive Analysis Should Answer” in her Savvy B2B Marketing blog, sometimes competitive analysis can lead to dead-end marketing strategies that are just copying your competition’s moves. A business version of “keeping up with the Jones’s”.
The best competitive strategy is to try to re-invent or re-define your category so that you are the market leader… a lot of great examples of companies that are out there that have done that.
Copying competitors won’t get you there… but competitive analysis can help you determine the best way to really crystallize your target subsegment that has you as the de facto leader…
So, yes, if you are selling software products or services, do invest some time in software marketing research to better understand your competitors. But instead of trying to follow them, use that information to develop strategies that truly differentiate you within your target segment.
A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is an effective way to make sure your marketing activities align with your business strategy.
Why is that a good thing?
It means that the money you spend on marketing is more likely to produce the business results you’re looking for (more customers, larger market share, increased revenue… whatever your particular objective is).
When you do a SWOT analysis, you brainstorm and list out your company’s
Strengths (what are the positive attributes of your company, product or service?),
Weaknesses (what are the negative attributes of your company, product or service?),
Opportunities (where are the market opportunities for your product or service?),
Threats (what are the main threats to your company?).
The SWOT analysis can help you find a way to use your company or product strengths to take advantage of market opportunities, and identify and work on weaknesses that might inhibit your ability to take advantage of those opportunities.
To be successful, it’s important to always be on the alert for market threats. Leverage your strengths to either eliminate or reduce the impact of threats, and work to address any weaknesses that may increase the criticality of threats.
Finally, prioritize marketing activities and messaging that highlight your strengths, and help you take advantage of opportunities.
OK, here’s one of my pet peeves: if you have a blog or a twitter account linked from your business website, make sure the posts and tweets are targeted to your customers and what they care about.
Seems obvious, right?
But I see so many small technology and software companies that use their blog to discuss the trials and tribulations of being a startup rather than addressing the customer pain point that they designed their product to solve in the first place.
If you want to write about the experience of running your business, and share best practices with others, then by all means have a separate blog. But don’t think your customers could care less! Even worse, you don’t want them seeing your dirty laundry (why tell them about the firefighting you were doing yesterday to deal with the outage you had…?).
Make sure you have a customer-focused blog on your website, with posts that are of interest to your customer. Try to weave your USP (Unique Selling Proposition) through the blog, while making sure not to appear too salesy. Your blog should contain additional helpful information, tips, and product-related announcements that your customers and prospects will find useful.
Posted by jlc 
