Company:            FrontRange Solutions

Started:               2000

Located:              Pleasanton, California

Geography:          Global

Market:                IT and Infrastructure Management Solutions

Products:             Help Desk, IT Service Management, IT Asset Management, Customer Service, CRM, Voice and SaaS².

Geography:          Advanstar Communications, Amercian Stock Exchange, Chicago White Sox, City of Des Moines, Instron Corporation, SHI and Swisscom

Website:             FrontRange Website

Blog:                  FrontRange Blog

Twitter:              @FrontRange

Recent News:

FrontRange Solutions Announces New ITSM SaaS Solution

FrontRange Solutions delivers much anticipated IT Service Management Enterprise

FrontRange Solutions Announces Release of new Service Catalog Solution

I asked Kevin Smith, FrontRange’s vice president of marketing a few questions about his newly launched SaaS business and his view on the market going into 2011.

Why did you launch a Software-as-a-Service business?

Even as a large, profitable on-premise software company, about five years ago we saw a growing demand in the market for SaaS-based service management and help desk solutions. We knew from our experience that just hosting our existing products like some of our competitors had done in an ASP-type of solution wasn’t a viable strategy. It also wasn’t what customers wanted.

So we decided about three years ago to build a new product that was a pure multi-tenant solution and we have invested millions of dollars to create our new ITSM SaaS solution. When we looked at our version of SaaS, we think of it more as Solutions-as-a-Service that is included in our SaaSIT family of solutions including service desk, asset management and customer service.

What lessons have you learned in building your SaaS business?

One of the main lessons we learned was that our customers still want on-premise solutions, especially companies vertical industries such as healthcare, government and financial services.

Customers we have talked to want a hybrid model, with a single provider. They want their divisions and headquarters to be able to use either on-premise or SaaS, based on their needs, but be able to exchange information between both types of products. We believe it is possible to have world-class products across both on-premise and SaaS. FrontRange will continue to invest in both product lines and create distinct product roadmaps but also look for synergies.

We understand that SaaS is a different business model, including different products, customer service, sales, services and even training. FrontRange used a tiger team approach where we brought in key talent who understood SaaS processes in development, operations and other areas. The idea was to infuse the company with some SaaS DNA in a few important areas, and we will build up this expertise over time. We are also using partners to help us with our SaaS offerings including Amazon Web Services’ EC2 hosting infrastructure.

Interestingly we have seen a halo effect with our existing on-premise customers as a result of having a SaaS product strategy. For instance we have customers who have been using our HEAT product for many years, and had a corporate mandate to look at SaaS, so when they learned about our SaaS strategy it just reinforced their desire to stay on product maintenance.  This was attractive for existing customers using our on-premise products because they liked the future opportunity to mix and match both delivery options.  Our pipeline for new customers also contains many hybrid deals where companies want both on-premise and SaaS offerings.

We were also fortunate that our company was able to fund the build-out of our SaaSIT product suite from our normal operating income and cash over the past three years and were even still able to remain profitable.

The SaaSIT product felt like it took a long time to develop, and at it was a difficult process, but we are now excited to have a truly competitive SaaS service offering to sell.

Starting on Monday February 2nd we are launching our SmartSaaS Business Profile series which will cover both Pure SaaS firms as well as those Cross-Over and Hybrid firms who are actively moving to a Software-as-a-Service model.  The idea is to get their thoughts not only into their firm but also what is happening SaaS industry today and in the future.
 

The series should be something unique to the SaaS industry and hopefully fun to read. Let me know what you think and if you want to suggest any companies that should be included in the series.
 

Kevin