Operational warranty: a sales booster and a symbol of trust
According to a Gartner study from August 2015, business applications are inexorably migrating to the Cloud and SaaS. Indeed, worldwide growth in the applications market in 2015 is estimated at 7.5%, and is expected to reach $149.9 billion. The majority of spending is going towards modernizing, expanding or replacing desktop or business applications with cloud software or SaaS services.
This transformation heralds new modes of consumption based on usage, often driven by young companies, the main vectors of innovation. Their business model is based on multi-year contracts. This mode of consumption is not without risks for customers, and we need to identify their fears precisely in order to better position ourselves. To complement this understanding of the context, and to break down barriers to sales, exaegis, the Digital Rating Agency, has developed a solution enabling publishers to establish a climate of trust with their prospects. This solution, known as the "operational guarantee", ensures continuity of service until the end of the contract in the event of a publisher's failure. Backed by the operational guarantee, the robustness of the publisher's offering is reinforced by a system combining legal, technical and financial skills. This ensures the confidence needed to close deals, and speeds up the sales cycle.
The reluctance of key accounts to adopt SaaS
The main obstacles to Saas adoption felt by large companies are manifold. The first relates to the supplier's intrinsic capabilities in a number of areas that are crucial to business continuity. Security comes to mind first. From the inside, a CIO participates in the deployment of a security process, and knows precisely the efforts and skills required to properly secure an IS. They are therefore naturally reluctant to delegate responsibility for all or part of their IS to a third-party supplier. Today's security environment is characterized by an abundance of different forms of attack, and data security is a constant concern for CIOs. Consequently, the context is not conducive to such delegation. When it comes to business continuity and recovery, CIOs are also aware of the effort and cost involved in BCP and DRP operations. Your prospect won't want to sacrifice these efforts on the altar of SaaS.
The second obstacle is the long-term viability of the Saas provider, all the more so if the structure is not long-established. The adoption of SaaS sometimes requires a cultural change on the part of IT Departments, whose main barrier is trusting a supplier, not just on the basis of product information, but on the basis of information about its long-term "service capabilities". From purchasing a license and a product installed on his own infrastructure, with which he is autonomous, he takes the step towards complete outsourcing: data, applications and administration services. The failure of a SaaS provider can therefore be synonymous with the loss of sensitive data, operating losses due to service interruptions, or failure to recover from disasters.
Added to this are buy-outs of competing software vendors, carried out with the aim of killing off the competitor's solution. This kind of situation leaves the customer with no means of controlling the deadline for migration to the new solution. CIOs are aware of this difficulty because of the history of software publishers, but the impact of this situation in the case of Saas is quite different, and can lead to legal deadlock, leaving the customer completely helpless.
Reversibility is also a concern for publishers. The cloud gives the illusion that you can switch from one cloud to another, or from one CRM to another. This illusion is well on the way to becoming reality, but in the meantime, customers are sensitive to the format of their data should they wish to change provider. The adoption of SaaS is therefore accompanied by new policies for internal control of data protection, backup and recovery practices.
How to ward off objections and give your prospects confidence
When selecting a Saas service, the criteria reviewed by buyers and CIOs, apart from price, will be those mentioned above.
When it comes to security, your prospects may be demanding in terms of the processes deployed by the publisher, and in the extreme may impose a SOC II or ISO27001 security standard. These very demanding standards are costly to obtain, and address very broad issues that are sometimes outside the scope of your prospects' concerns. With the Truxt label, developed by exaegis and designed to address Cloud and SaaS issues, you can demonstrate that you meet the minimum requirements expected of a SaaS vendor. The Truxt label alleviates any apprehensions about security, among other things, and does not oblige the customer to commission a supplier quality audit with an external or internal auditor. During the pre-sales phase of the solution, Exaegis will be happy to explain the control points deployed (financial audit, accounting audit, internal audit, external audit) and the results.
With regard to reversibility or continuity of service, the operational guarantee operates on behalf of the publisher's customers to demutualize the Saas environment in a secure environment, to segregate data, and to ensure the legal reversibility of the application source code in the event of the publisher's failure. The environment is reproduced on a secure environment on which exaegis carries out validation tests to ensure that it is working properly, throughout the contract and during updates. In this way, without owning the intellectual property rights to the software, the customer acquires the necessary rights to use the solution on his own behalf, and only for the duration of the contract.
With regard to financial sustainability, the monitoring mechanisms deployed by exaegis will keep the publisher's customers informed of the level of financial risk to the publisher, based on market indicators, indicators from the publisher's regular accounting and financial audits, financial information and e-reputation. Exaegis acts as a "trusted third party" between the publisher and its customers. It exchanges monitoring data with the publisher and absorbs the effects of "raw" communications from financial institutions and statutory auditors (unpaid invoices, payment behavior, publication and certification of accounts, privileges with social organizations). Public accounting information is put back into the publisher's operational context, and exchanged with management for objective reporting to customers. Depending on the indicators derived from this monitoring, the effort required to recover data on the exaegis secure environment will be greater or lesser, in order to manage the risk of failure through a proactive approach to reducing the impact of failure for the customer.
The penultimate link in the continuity chain, the transition in the event of failure, consists of deploying the isolated solution with a "Backup Service" provider selected by exaegis from among the population of certified providers, to ensure operation, administration and corrective maintenance, within the framework of the initial contract and its duration. This transition is handled by exaegis, and includes a migration / commissioning / go-live plan!
Finally, the operational guarantee is supplemented by a financial guarantee mechanism, in the event that exaegis is unable to ensure continuity of service. This financial guarantee currently amounts to €15 million.
Default: how does a taboo subject become a differentiator?
It's never easy to talk about failure when you're at the helm of a startup or SME, and you're aiming to achieve great things. Yet key accounts are vigilant about the disappearance of, or dependence on, a supplier, all the more so when dealing with a startup. Key accounts are under pressure to outsource innovation, and innovation is becoming a criterion of corporate governance. In this context, adopting an operational guarantee means showing that you've thought of every scenario, including your own demise, and backing up your offer with an operational guarantee is proof of good management.
What's more, the operational guarantee is designed specifically to address the barriers to SaaS adoption. The guarantee protects both the service provider in terms of intellectual property, and the effects of "raw" negative information that every company may be confronted with; and protects the customer by setting up an isolation device for the solution on behalf of the customer, which can be reused at any time to deal with difficult failure situations.
The publisher benefits from exaegis' experience in structuring and operating a Saas solution, since exaegis' challenges in these areas are legitimately those of a publisher. As a result, the publisher has an operational and financial guarantor at its side, committed to ensuring the successful conclusion of multi-year contracts.
Article translated from French