According to Lauro de Lauro, coordinator of the ABES SaaS Committee, companies need to adapt to this reality since SaaS is the basis for a successful Cloud strategy.
ABES SaaS Committee Coordinator, Associate Director of the Association and Entrepreneur; Lauro de Lauro has a very direct view on the adoption of the recurrence model in the provision of IT services. “Whoever doesn't adapt, dies”, he says. According to him, this is the model that the market is demanding and, without the cloud, there is no scale. “The equation is simple and financial”, he points out. The executive calculates that the turning point of the cash model for recurrence is not far from happening and the Telecom sector is at the forefront of the transformation, pulling the other industry verticals. Read the full interview below.
How did the software as a service committee come about?
We set up the committee in 2014 based on market demand. SaaS is nothing more than a company that becomes a service provider. The nature of a software developer is developmental, that is, it has made a product, which is normally licensed, and which has a property character, as the product is purchased. This is the common software acquisition model. When you go to a SaaS model, the company is not selling anything. It is in the economy of recurrence. How, then, to change from a business model resulting from a sale to a model that places one user per month? This is the biggest challenge of digital transformation.
How do you assess the maturity of the market for the SaaS offering?
The model that the market wants is the recurrence model. So suppliers have to adapt. Whoever doesn't, dies. This is the reality. The turning point is exactly in the financial equation. The foundation of SaaS is cloud. Technologically, if the application does not scale in the cloud, it is not adapted. Today it is possible to have platform as a service and infrastructure as a service, both based on the cloud. SaaS without being in the cloud does not have sufficient financial scale. The concept of having the SaaS model is to be able to scale the volume of customers. Thus, operating costs are reduced. That's the catch in SaaS. When you have a business model where everything is priced, and everything is customized for a customer and not for a segment, everything becomes more expensive and more complex. So the model is: how do I transfer that intellectual property of mine to a model that brings together many to hire and manages to reduce operational costs and expand the range of clients. That's the equation. And this is not happening.
How is ABES, led by the committee, promoting business opportunities?
We have two simultaneous realities. The reality of startups, which are already born disruptive, natural in the concept of scaling and in the cloud. On the other hand, incorporated companies, which are the great base of the approximately 900 thousand associates, with several years of existence. The challenge is to show the established how to implement the startup model. It's not very simple because we still don't have funding. For an already established company to turn this key, it is necessary to invest. It needs to recode its software, review its marketing strategy, review its positioning. Doing this with the current cashier, based on the traditional model, is difficult. In the last two years, we have gone through a phase of making established companies aware of the business model that is irreversible. Today, a company can survive without a cloud and without being SaaS for a very short time. It is a process of evangelization and it is not a simple thing. We also have support bodies, such as Softex.
Is the Telecom market pulling digitization?
I wouldn't say it's telecom. The disruption happened in the mobility process and telecom is the basis. So, from the moment that the smartphone became capable of executing applications, the scenario changed. Today, the application is consumed, it is the closest thing to human and business needs. And that's software. How to translate processes, scale production line systems without software? It's impossible. Mobility is what promoted acceleration and along with it, the cloud. The cloud has brought to the developer level infrastructure capacity they never had. The same thing is happening with IoT. Kits for some applications, such as health monitoring, are quite inexpensive. This allows the democratization of the solution. Anyone with a little knowledge, little investment, and an account with a cloud provider can do the lab. So, the IoT explosion is also related to cloud availability. Low-cost computing added to mobility then promoted this movement.
How can cloud brokers contribute to this movement?
Cloud is simple in its offer and complex in its options. Today we have some like Google, AWS, Microsoft, IBM and each one of them has its capacity from a computational point of view and mainly a certain amount of service. Choosing the best is also a challenge. So, more and more the role of Cloud Broker is to provide abstraction for the top layer that it will develop. There are companies that need five different capabilities for the same application. The broker then has the role of agglutinating and simplifying the layers. It is already a facilitator, especially for the Enterprise environment. Small, startups have to hire SaaS. They don't have an option. It is like this in the world and in Brazil, more and more.
What does ABES do to encourage the scaling model?
We did a survey on the SaaS landscape in Brazil and realized a cruel reality. The concept is not yet widespread in the market. We are at a critical moment from my point of view because there are companies that don't know what SaaS is. That's why we invested in the last two years in events to spread the concept. For a transformation, three supports are needed. The first is marketing, which requires a special model for SaaS, based on digital. The second is the business plan, which determines paths for this business model change, from the traditional to the recurring. Finally, the transactional process to implement this change. Whoever has capital or funding makes a spinoff and starts pulling intelligence, transforms and then incorporates it. That is, nothing technical like code development. It's all about management.
How will new disruptive technologies like Artificial Intelligence and blockchain impact?
In the context of incorporated companies, in the same way that we are behind in cloud adoption, we will also be behind in new technologies. Brazil has a gap in this regard. It's not capacity, it's not a process, it's the brake of disruption.
By 2020, all software will have AI according to Gartner. do you agree?
Gartner's projections are always aggressive for Brazil. For the world, they are accurate. In the case of Brazil I would add 3 years. Launching cognitive platforms today is a matter of the brain. If you know how to do it, it's easy. The challenge is to change the business. It is an outside-in movement. From the customer to the company.
In terms of security, how do you see the impact of cloud massification?
There is no more resistance in cloud adoption on account of security. Today it is already part of the business, it became natural to have this premise. Security you have to have to minimize risk, but it does exist. But the security industry is as ready or even more active than the IoT or cloud industry. Manufacturers are moving to bring security embedded in devices. Google has released a chip that has encryption to be embedded in devices. Intel is also releasing.
How do you see the SaaS offering in Brazil in 3 years?
The new entrants curve will rise at a rate of up to 40% of growth per year. This is already happening heavily. RockContent did a survey on SaaS in Startups and mapped 500 companies and it shows. The transformation is slower and will have a lot of mortality. In this universe, we will also lose a good number of established companies because they are not able to make the transformation.
Source: Info Channel
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