Increasing Sales Through Adoption of the Applied Educational Systems Software as a Service (SaaS) Model

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1 Applied Educational Systems SaaS Advantage Increasing Sales Through Adoption of the Applied Educational Systems Software as a Service (SaaS) Model Version 1.0 Engage. Learn. Succeed

2 The Applied Educational Systems SaaS Advantage SaaS Advantage Executive Summary The SaaS Model Drives Greater Sales for Reps, Greater Satisfaction for s! Applied Educational Systems is pleased to introduce a new educational software model that provides numerous advantages over traditional software applications. This model is known as SaaS (Software as a Service). The unique features of the SaaS Model result in numerous benefits for its sales partners, including: Ability to reach more customers SaaS architecture and its pricing model make it an affordable option for schools of all sizes. Lower cost and speed of sale the lower initial price point can simplify the customer decision and speed up the purchasing cycle. In addition, the web-based SaaS application is simpler and therefore quicker to explain and demonstrate to customers. Increased revenues the annuity effect of SaaS subscription renewals means that more orders equate to more long-term revenue. The wide range of features offered by the SaaS Model also present many benefits for customers, which increases their overall satisfaction and your overall sales. benefits include: Lower cost of ownership On demand customer access to software via the Internet No installation or configuration requirements Greater access to curriculum content and lessons Ease of use in a hybrid or blended learning environment Increased security and reliability over traditional software applications The ever-evolving landscape of the educational marketplace, and our commitment to provide the most flexible, cutting-edge software solutions for customers in the marketplace, are why the SaaS Model has been developed and should be embraced! Introduction With economic uncertainty, rapid technology shifts and the desire to offer relevant courses, schools want and need new ways to provide up-to-date educational content for their students. More than ever, traditional educational software solutions do not meet their needs. But the SaaS Model does and the adoption of this delivery, development and business model positions Applied Educational Systems, its sales partners, and its customers for great success. This white paper will: Define the challenges currently facing the educational market, and how Applied Educational Systems can help customers overcome these obstacles through the SaaS Model. Discuss what the SaaS Model is, and give the reader a clear understanding of how it works and why it is the preferred option over traditional software applications. Highlight the key advantages that the SaaS Model presents to its sale partners, and how they result in greater sales and increased customer satisfaction. Defining the Challenges Schools face a growing number of challenges when it comes to educating their students and providing them with the relevant skills needed for real-world success. Traditional educational software applications no longer provide the desired efficiency and flexibility. Common challenges of traditional applications include: Increased costs of buying the technology infrastructure Complex, time-consuming set up and installation procedures Reduced IT staffs that are less available to provide technical assistance and system maintenance Limited reach of curriculum, as it is tied to a specific computer, classroom or network Delayed delivery of curriculum updates and system upgrades traditional software applications require physical shipment of major version changes In addition to these challenges, educators face the growing task of shifting their curriculum to a hybrid or blended learning environment in order to accommodate a more diverse student landscape that demands a more flexible way of learning. The SaaS Model offers the flexibility needed to achieve a hybrid or blended learning environment, while overcoming the technical challenges of traditional software applications 1 of 4

3 Understanding the SaaS Model Software as a Service, or SaaS, is a software delivery model that provides on-demand customer access to software over the Internet or in the cloud. Unlike traditional on-premise software applications, SaaS is not installed, configured or maintained locally on the user s computer or server. Therefore, SaaS customers usually subscribe to the Web-based software service rather than purchase a software product-license upfront. Some software providers host their customer s software applications on Web-servers. Many of these Application Service Providers (ASPs) maintain multiple products and versions to accommodate the needs of various customers. SaaS developers, however, provide all customers with access to a single instance of the SaaS application and database. This architecture is called multi-tenancy. While each customer or tenant, accesses the same instance of the software, the SaaS user-interface and software functionality can typically be customized for each customer. Applied Educational Systems employs the SaaS Model for all of its online content delivery. Rather than hosting multiple instances of its software applications, Applied Educational Systems provides on-demand Web access to a single instance of its application using multi-tenancy architecture. When compared to traditional software products and hosted applications, the SaaS Model provides significant advantages for each customer, by way of Cost, Accessibility, Reliability and Speed of Service (further details regarding customer advantages are presented on the following page). Software as a Service How Sales Partners Benefit from SaaS The SaaS Model presents many advantages over selling traditional software products, including: A. More customers B. Recurring revenues C. Lower costs D. Greater speed of service E. Increased customer intimacy A. More s One proven method for growing revenues is to increase the number of potential customers. Applied Educational Systems SaaS-based pricing and technology can increase potential market size in a variety of ways. Motivated by factors such as reduced IT staffs and the rising cost of buying and maintaining technology infrastructure, an increasing number of schools will no longer allow traditional software applications to be installed on their PCs and/or servers. Many schools are implementing thin client technology, while others allow only Web-based applications that can be accessed via their online Learning Management System (LMS). Since SaaS can be used in both thin client and LMS environments, the SaaS architecture is an acceptable, preferred option over traditional software applications for a larger number of schools. The Applied Educational Systems pricing model also makes SaaS an affordable option for schools of all sizes, from very small schools to very large school districts. With pay-per-user subscription pricing, small programs can afford to provide just a few students access to the same content and features previously only available in high-priced software applications. Likewise, the Applied Educational Systems quantity pricing for SaaS-based products is scaled so that very large schools and school districts can economically afford to subscribe thousands of students at a time. B. Recurring Revenues Multi-Tenancy A greater number of potential customers can mean more potential orders. Even with lower upfront pricing, the annuity effect of SaaS subscription renewals means that more orders equate to increasing revenue in the long run. 2 of 4

4 The chart below illustrates the potential revenue generated by getting one traditional software order per year averaging $25,000, compared with getting five SaaS orders per year averaging just $3,290 each. ($3,290 is the current SaaS price for 50 annual student subscriptions.) Assuming a 90% SaaS renewal rate per year*, the SaaS and traditional revenue models are almost equal by the second year. However, by the third year SaaS revenue is 23% higher than traditional revenue. By the fourth year SaaS revenue is 49% higher than traditional, and by the fifth year SaaS revenue is 73% higher. features can be available to customers as quickly as they can be uploaded to the cloud. Since there is no need to delay curriculum updates or new features until the shipment of a major version change, new software releases can be made on a continual basis. Updates and product innovations can quickly reflect relevant up-to-date content, and features that customers really want. Faster speed of service is not just a development advantage, but also a sales advantage. Fewer sales barriers and fewer sales calls can result in shorter sales cycles and faster deals. At the end of the day, more sales more often is an excellent reason to embrace SaaS. E. Increased Intimacy Revenue for one $25,000 traditional software sale per year, versus five $3,290 SaaS sales per year *Even with a 65% SaaS renewal rate, SaaS revenue would still exceed traditional revenue by Year 3 in this example. C. Lower Costs Lower costs are another advantage of SaaS for sales partners: The cost per sale can be significantly reduced since fewer calls may be required to close a deal. The Web-based SaaS application is simpler to explain and demonstrate to customers than complex client-server applications. Lower initial prices and technical barriers can simplify the customer decision and speed up the ordering process. Sales partners enjoy a much lower cost of service with no hardware or software to install, and no updates or patches to load, on-site service calls are no longer required. Troubleshooting specific customer issues is also far easier and faster with Web-based services versus premisedeployed applications. D. Faster Speed of Service If software development were a race, then SaaS development would be a sprint. In addition to faster programming and testing of a single database and code set, product-to-market time is almost instantaneous as new curriculum resource content and The fundamental goal of good product management is to develop products that customers want to buy and use. There are many features about the SaaS Model that lead to an increased level of customer intimacy: The ability to monitor actual usage of content and features, and allowing for further development of key features and less attention to unnecessary items. Aggregating user data, creating user polls and surveys, and collecting immediate user feedback allows Applied Educational Systems to develop better and more saleable products. The SaaS Model also provides a common platform for (future) community interaction. As educators are able to collaborate and share feedback and best practices with one another, the network effect makes their investment more personal, and makes the Applied Educational Systems SaaS-based product stickier. How s Benefit from SaaS Applied Educational Systems SaaS Model provides high quality educational content in a way that is more cost effective, accessible, reliable and faster than traditional software solutions. The top customer advantages can be summed up as CARS: A. Cost B. Access C. Reliability D. Speed of Service A. Cost SaaS pricing offers less expensive upfront costs than traditional software pricing since it is based on a subscription model. 3 of 4

5 SaaS customers generally pay for the software application on a fee-per-user, per-time basis without any long term contracts or commitments. Overall, the lower total cost of ownership with the SaaS Model compared to traditional software is what provides customers with a significant set of advantages, such as: No expensive upfront licenses No on-site installation or service fees No annual maintenance fees No additional IT infrastructure investment required (i.e., servers, network devices, data storage and backup utilities) No need to budget, plan and implement software and hardware upgrades for the above infrastructure New applications can be deployed more rapidly Fewer IT staff resources required B. Access Enabling students and teachers to access content and lessons via the Internet anytime and from anywhere is a key advantage of the SaaS Model. Unlike other delivery methods that are tied to a specific computer, classroom, or network, Applied Educational Systems SaaS content and functions can be accessed by students and teachers whenever and wherever they have Internet access. The Applied Educational Systems system is platform independent, so any computer and mobile device with a compatible Web browser can access materials associated with classroom instruction to create a hybrid or blended learning environment or a completely online course. C. Reliability The SaaS Model employs the same technology used by the world s leading cloud computing software companies. s using products hosted in the SaaS Model can enjoy more robust security and reliability over traditional software applications. Advantages include: Secure student and instructor access Systematic backup and recovery Fail-over server redundancy Off-site data storage Automatic virus protection Proactive load balancing D. Speed of Service Lower costs without long-term commitments often result in faster purchasing decisions and acquisition. Unlike expensive software licenses requiring special grants or budget approvals, Applied Educational Systems curriculum resources, available via SaaS, are typically affordable within a school s current year instructional or IT budgets. Onerous public bid and contract review processes are generally not required. Top customer advantages include: Faster implementation no hardware/software to order, set up or install Immediate release of system updates and upgrades to end user no need for major version releases Quick scaling for additional students, classes or schools no infrastructure changes required Shorter learning curve and increased productivity for instructors and students driven by the simple, browserbased user interface Summary With its cutting-edge in the cloud technology, flexibility and multitude of cost- and time-saving features, it is clear to see how the SaaS Model can generate increased sales and provide greater customer satisfaction, which ultimately leads to more reliable, recurring sales. Sales partners are encouraged to utilize this white paper as a valuable sales resource to gain a clearer understanding of how the SaaS Model works and what benefits it can bring to their customers and ultimately your sales. For additional information, please visit our Online Rep Center: To share questions or comments, please contact our sales team: sales@aeseducation.com of 4