SaaS Mindset
IT Thought Leadership

Moving from a Product to a SaaS Mindset

by: VMware VP and Global Head of Engineering Roopa Raj and VMware IT Director Sarita Kar

VMware is in the middle of a business transformation—from a perpetual-license model to subscription-based model (SaaS). This shift is driving a digital transformation across all major organizational functions—products, go-to-market, and operations. Roopa Raj, Vice President and Global Head of Engineering, who joined VMware during this transformation, believes that everyone has a role to play in the transformation, directly or indirectly, as VMware moves from a product to a SaaS mindset.   

Enterprise SaaS mindset at VMware

In the current scenario, VMware has three corporate priorities:

  1. Win the multi-cloud enterprise.
  2. Operate as a “consumption-based” SaaS company.
  3. Adopt our mindset to operate as “One VMware.”

Our Chief Digital Transformation Office (CDTO) prioritizes aligning to these broad companywide priorities, to:

  • Build a world-class foundation platform for selling to our SaaS customers in the most effective way.
  • Simplify commerce.
  • Drive actionable insights through data.
  • Enable seamless customer, partner and colleague experiences.

Delivering on these priorities requires a SaaS mindset, the ability to operate cohesively as One VMware, and many other functions to be aligned and connected, starting with people and driving our digital DNA, then processes.

Data

Data transformation goes beyond collecting and storing data as the single source of truth. It is about empowering our colleagues to operate with a data-driven mindset to produce actionable insights that can inform decision-making. With data, we can create a baseline of where we stand today and drive progress toward specific business outcomes. An example of this is automating the reporting of monthly and annual recurring revenue (MRR/ARR) and churn to help us dynamically monitor our SaaS business growth.

Systems

We need to build systems with new digital capabilities, a massive undertaking. And we want to accelerate delivery while we have a laser focus on critical aspects, such as resiliency, performance, security, privacy and compliance. We also want to deliver new digital capabilities incrementally, but how do we make the operational capabilities more robust, such as moving from monitoring to observability, proactive issue resolution?

Underpinning all of these is driving the needed SaaS mindset, which is extremely critical. We must focus on how we enable our teams to move from a traditional product mindset and how we change ways of working in line with a SaaS mindset. Some examples include:

How do we move

From—focus on domain-specific, big feature releases in waterfall methodology or with limited agile principles

To—end-to-end business capabilities cutting across domains in a unified manner using agile methodology across all the impacted teams

From—output-driven focus on project completion

To—outcome oriented focused on value, improved speed to market, ability to deliver multiple products simultaneously, and faster and multiple release cadence through effective CI/CD, automation and continuous learning.

In a nutshell, our strategy focuses on creating a connected journey across all transformational areas—people, process, policies, data and systems to create new possibilities for our business, to transform ourselves into more nimble innovators, to find better ways of working, to adopt inventive business models, and to deliver new and engaging customer, partner and colleague experiences.

Building SaaS culture

As we transform, we need to improve the way we support our current business models and customers. A significant part of our revenue comes from perpetual business. We continue to enhance and ease the way we do that business.

While we do this, we focus on transformation and standing up a platform that offers, products through our SaaS business model in an incremental way and achieve incremental business value realization.

We need to get mature at driving this dual velocity and scale it up on both sides. Whatever the process, or methodology, we need to scale up to delivering products in multiple ways. But it is a journey; we are not going to scale up, get mature and transform overnight. We must improve and reach our target maturity level, but we need to reach that target state as quickly as possible.

We identified several areas to focus on to tachieve the maturity and scale we want in the most effective manner. These include:

1) Transforming as quickly as possible engineering teams need to work in an integrated manner. To deliver end-to-end business capabilities, different engineering teams across different domains need to come together, plan and work in an integrated manner, deliver together and deliver as frequently as they can so businesses can consume end-to-end capabilities and we can achieve incremental business value realization.

2) Trying to mature Dev/Ops or CI/CD of every tech stack involved so we can improve overall developer productivity and developers can focus on building the business changes and ensure all CI/CD tasks are fully automated.

3) Transforming concurrently We cannot transform sequentially (we can’t build a foundation platform and then build partner experiences and then build master data management systems and so on). We need a mechanism where we can simultaneously work on several transformation areas or products at the same time and tightly manage the interdependencies between them. So, we are adopting the best practices from a scaled agile framework to proactively plan and manage interdependencies between products and progress without much rework or technical debt.

4) While we deliver rich business capabilities, we also need to focus on improving and maturing our operational capabilities to be able to better serve our customers. We have to focus on security, compliance, upgradability, and all of these need to be balanced with feature delivery.

At the end of the day, we can achieve the balance with high customer centricity and a deep understanding of business impacts, plan very thoroughly and synchronize the multiple priorities and execute them with the right methodology.

Measurements to excel in the SaaS world

There is an inventory of metrics we capture at various levels, but in summary, we have six SaaS metrics that are the top enterprisewide key performance indicators of our SaaS business. See Figure 1.

Figure 1. Key performance indicators of our SaaS business.

How to build a SaaS-first mindset?

The key is to understand that the success of any transformation is for cross-functional teams to come together, have goals and priorities aligned, and plan and execute together as one integrated team. For this reason, we have a third priority at the organizational level: “adapt our new mindset to operate as “One VMware.”

We focus on the three “Cs”–customers, consumability and collaboration so that whatever we do, we always put customers in the center; whatever we build, we always make it consumable by customers quickly and easily; and whenever we collaborate, we always ensure that cross-functional teams work as one integrated team. By doing these things, we will achieve our business goals and customer success.

For more information, listen to the second podcast of our Digital Transformation series. 

VMware on VMware blogs are written by IT subject matter experts sharing stories about our digital transformation using VMware products and services in a global production environment. Contact your sales rep or vmwonvmw@vmware.com to schedule a briefing on this topic. Visit the VMware on VMware microsite, read our blogs and IT Annual Report and follow us on Twitter.

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