Open-Xchange CEO Rafael Laguna talks about how web hosts can make money with SaaS

WHD 2012 — How to Make Money with SaaS with Rafael Laguna of Open-Xchange

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On the final morning of sessions at World Hosting Days, Open-Xchange CEO Rafael Laguna talked about how web hosts can capture the growth of the software as a service market, compete, and make money.

Laguna started the presentation by offering a bit of background on Open-Xchange, which provides webmail through service provider partners. Since its launch in 2007, Open-Xchange has grown to 42 million users.

“Making money out of the services you are providing is the biggest challenge for providers,” Laguna says.

According to Laguna, 40 percent of people spend their Internet time on their email. He says this statistic reflects a need for a change is the sales process. Rather than targeting the head of admin when selling webmail, web hosts should target the users.

Open-Xchange helps with the process by integrating upsell triggers within the webmail interface. For example, file collaboration is not part of the unpaid package, the icon is still there, so if a user clicks on it they are prompted to an upgrade button. He says that to make money, service providers need to move away from the off-the-shelf selling to in-app upselling because it works.

“When they’re in a mood to buy stuff, give it to them,” Laguna says about users. While he knows that admins may not like service providers selling directly to their customers, everyone inside of a company has the ability to buy stuff, especially smaller companies.

“Fulfill the users of your system,” Laguna says.

While end users may use your mail client, they may not know about your brand, so you need to provide a good user experience so they know this. Open-Xchange can be white-labeled so users will have more awareness about your brand.

In addition to being white-labeled, Open-Xchange doesn’t dictate a specific price or package, but rather gives service providers a stack of software.

Open-Xchange has grown 100 percent year-over-year, and has doubled its users year-over-year as well, according to Laguna.

“It’s not the Gmails, it’s not the Office365s that make these numbers,” he says.

Laguna thinks that local providers will drive SaaS, since big companies do a lot of sneaky things like Facebook and Google having access to information.

With the change of how software is delivered, the SaaS market is predicted to reach $100 billion in 2017. Researchers predict that by 2016, 25 percent of the software market will be SaaS. He says the common thinking is that the SaaS market will grow 50 percent year-over-year.

“This market is growing, you’ve been there from the beginning, you have locality, you have skills on how to support and run applications,” Laguna says.

Laguna talked a bit about Open-Xchange 7 version which runs HTML 5 which really helps with the mobile experience since performance is the biggest concern with web applications.

While there were a few technical difficulties that caused his slides to crash about halfway through as he was planning to show a demo, Laguna says a demo is available at its booth.

The WHIR recently included Open-Xchange in its roundup of five popular email and collaboration software for web hosts.

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  1. The SaaS marketing continues to grow as users needs become more advanced. SaaS is attractive because there are less up front costs. Cloud based SaaS solutions allow for greater accessibility.