A leading software company wanted to capitalise on the benefits of making the transition to a cloud business model by migrating its existing on-premises solutions to cloud-based services.  The company recognised the value this would bring to the business in the form of reduced operating costs, predictable recurring revenue, ability to penetrate new markets and greater customer insight.

The company was aware of the increasing trend to consume software via subscription-based services.  Still, it had not focused its product development and market requirements efforts on specific nuances of the broader market landscape, as it maintained such a strong, long-standing customer base.  Competition from new market entrants forced the issue to effect the transition to the cloud.

Client Need

Declare was asked to address a number of critical issues regarding the best way to effect the transition without stalling sales of existing on-premises solutions or creating unrest within the existing customer base.  Specifically, Declare was asked to:

• Devise a new services introduction plan in order to test the viability of the new cloud-based offering
• Devise an upgrade and EOL strategy for existing on-premises solutions
• Develop a customer communications strategy and plan for both existing and new customers
• Develop an internal communications strategy for the sales organisation to apply with customers, prospects and partners
• Assist with the ratification of the new cloud-based financial model including SaaS pricing, expected churn rates, cost of customer acquisition and lifetime customer value

Declare’s Role

Declare needed to devise a both a proactive, market-making strategy and a defensive, customer retention strategy – both of which needed to be implemented at the same time as the market was beginning to become aware that a new SaaS-based solution was coming down the line.

First, we analysed the existing customer base to determine the financial impact on upgrade and maintenance revenues.  The priority was to allay fears that future maintenance and support for on-premises solutions would be withdrawn once the new SaaS offering was introduced.  Expectations needed to be handled with care as such fears could have a damaging effect on future revenues from the product line.  A comprehensive and far-reaching communications strategy and plan was developed for key customer groups and detailed briefings as well as Q&A statements provided for key product, sales and business leaders.  Specific members of the media and analyst communities were also provided with pre-briefings and sneak previews prior to general market availability.

To ensure the successful launch of the new cloud-based service, Declare developed a detailed upgrade programme for relevant customers and supported this with an Early Adopter Programme for both existing and new customers.  This approach ensured the company aligned directly with its customers’ needs and was able to quickly gain feedback on bug fixes as well as additional features required.

To understand price expectations, Declare reached out directly to the Customer User Group to discuss price sensitivity as well as opinions on general market availability and EOL of existing on-premises solutions.  This approach enabled our client to build strong, trusted relationships with highly influential customers, which continue to endure.

Using all the gathered information, Declare worked with the product marketing leaders to develop a detailed Go-to-Market plan which would act as a global blueprint for the company’s transition of all cloud-based solutions.

Declare ultimately ratified the new financial business model for cloud-based solutions by drawing on external research data as well as proven cloud business methodologies to produce clear presentations of revenue forecasts, projected customer acquisition costs, time to recover customer acquisition costs and expected break even point.

Client Benefits

• No loss of existing customers & attracted net new customers
• Working closely with existing customers helped to forge deeper, long lasting customer relationships
• Successful launch of new SaaS solution
• Cloud-based service now positioned as leading solution in relevant application sector
• Robust SaaS financial business model
• Blueprint for transitioning additional product lines to cloud model
• Co-ordinated internal and external communications strategy
• Go-to-Market planning model
• Early Adopter Programme methodology applied to new product introductions