Sharing the secrets of selling SaaS

• SaaS Overview
• Importance of TLC*
Agenda • SaaS criteria
• Customer Success
• Final Thoughts

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
Key terms: SaaS acronyms

• TCV - Total Contract Value

• ACV - Annual Contract Value
• ARR - Annual Recurring Revenue
• TLC - Total Life of the Customer
• CAC - Customer Acquisition Cost

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
SaaS wave
Forecast: global public cloud market size, 2011 to 2020

$180

BPaaS

$120
Total public
cloud markets
(US$B) SaaS
$60

PaaS
$0 IaaS

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Source: Forrester Research, Inc., IDC 50th Anniversary, Transformation Everywhere.
Example: SaaS transformation impact
Secure web gateway market

SWG SaaS Spend

SWG Appliance Spend

2017 2018 2019 2020 2021 2022 2023 2024

$2.3B $2.5B $3.1B $4B

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
The beauty of recurring revenue
$>120M

$>75M

$>35M

$0M
FY12 FY13 FY14 FY15 FY16 FY17

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
 Perpetual vs. SaaS
Conventional SaaS
 Understand Customer Acquisition
Cost (CAC) specific to your
$4 business. Is it changing?
 Partners have a double whammy
$3
effect in terms of lower upfront
PS and Product revenue
Sales $2
(US$M)  Total Life of the Customer (TLC)
is the key for lost PS dollars
$1
 Cisco profit levers are ultra
crucial
$0
1 2 3 4 5 6 7 8 9 10
Quarters
Source: SmoothSpan Blog,
© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
Is Conventional Software Built on Bubble Economics?
#1 Goal of SaaS is to Maximize TLC

Renewals SaaS renewals represent a

Churn YEAR 6 high percent of the
business model
YEAR 3

$30M
Replacing churn with new
$3M bookings becomes more
$7M
and more difficult with time
$70M
Over time 70-95% of
bookings comes from
renewal and upsells

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
Follow the customer journey
Develop and implement partner contact points
Increase users
Increase usage
Expand functionality
Grow value
(deployment)
Decrease value

First value
(successful trial) Decrease value Churn

Churn
Start
Churn

Trial conv. Onboarding Expansion Renewal Upsell Cross-sell

PROSPECT PROCESS PROCESS PROCESS PROCESS PROCESS PROCESS ADVOCATE

1 reserved. Cisco Confidential

© 2018 Cisco and/or its affiliates. All rights 2 3 4 5 6
 • Agile development
• Reliability
SaaS Consideration • Open vs. closed
Criteria • Usage insights Data
• Vendor retention rate data
• Gross vs. net retention

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
Customer Success
is not a buzz word

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
The new way

Customer Success Maintenance Renewal

#1 goal is to increase TLC Tech support

Assist with activation and onboarding Manage upgrade (waterfall)

Share best practices and High expense low adoption rate

communicate new features
Viewed as cost of business
Educate ongoing updates and value
to each organization

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
 • Live trial conversion rate
• New feature adoption
• Integration activity
Tracking success
• Net renewal rate
• Expansion/cross-sell
tracking

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential
In summary

Tight communication and planning across CX, sales, and

partners is critical to ensure ongoing adoption

Selling a Cisco SaaS solution builds a recurring revenue

model for your territory, paying dividends for years

SaaS solutions need to built upon a world class

infrastructure, demonstrate a commitment to agile
development, and be an open platform

© 2018 Cisco and/or its affiliates. All rights reserved. Cisco Confidential