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What SaaS-ification means for customer-business relationships

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Wes Durow
Photo courtesy Wes Durow
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Marc Andreessen once famously said that software is eating the world. And with the rise of cloud technology and software-as-a-service (SaaS) companies, it appears as though software might also be eating traditional revenue and service models of large enterprise companies.

“More and more of our customers are choosing to switch to a subscription model,” said Mitel Chief Marketing Officer, Wes Durow. “And in that world, response matters.”

A telecommunications company with customers in more than 100 countries, Mitel touts itself as one of the fastest-growing cloud communication providers. Speaking to DX Journal after the SaaS North conference in Ottawa, Durow said the move to cloud is changing how companies engage with customers, and businesses need to be aware of how customer relationships shift with the rise of as-a-service models.

“When you buy something every seven, eight or nine years, you’ll sign a longer contract and probably put up with some ups and downs,” said Durow. “But when you’re paying on a monthly basis for a service, you want short contracts, immediate response time, and a stream of new features pushed out to you as part of your subscription.”

Companies are quickly adopting as-a-service (aaS) offerings because of major cost savings and simplified integrations.

With cloud computing, for example, companies can dramatically reduce the physical footprint and cost required for in-house IT infrastructure. But when you engage a vendor and pay for services on a monthly or short-term basis, the nature of the business relationship can change as a result of many more touch points.

“The move toward Software as a Service or SaaS-based solutions has been well documented across customer, employee and financial data applications,” said Durow. “The unified communications segment now has more than 10 percent of the North American market choosing Unified Communications-as-a-Service (UCaaS) solutions versus on-site options.”

Mitel says UCaaS customers represent more than one million total users for the company, and that it has “substantially” more private cloud users.

“As customers move from intermittent transactions toward monthly UCaaS subscriptions, we have had to change how we design, deploy, bill and manage these services,” Durow said. “Further, we are also growing our customer success organizational capability so we can counsel and support these customers, in partnership with our channels where pertinent, to help guide them forward as they seek to add new features or intersect UCaaS capabilities with other SaaS services.”

Durow believes that responsiveness will be a key success metric for anything offered as a service.

“It’s all built around this transition from a transactional relationship to an experiential relationship,” said Durow.

Multiple industries are embracing the new service model. A recent Navigant Research report finds that Energy-as-a-Service has the potential to reach a global market of $221.1 billion by 2026. ServerWatch reports the Infrastructure-as-a-Service public cloud market is blowing up and revenues could scale from $16.8 billion in 2015 to $22.1 billion today.

For Mitel, acting on rising demand required the company to embrace a wide array of new technologies. The company used Salesforce for both internal and external tasks. They also rewired operations using Workday and adopted chatbots to boost demand-gen and service support processes.

“In our category, the number one differentiator for a brand is responsiveness,” Durow said, adding that the central focus with as-a-service offerings is the customer and their needs.

“The best companies that are really driving digital transformation speak very clearly about the problems that are solved, and they do it in a way that demystifies the technology. It doesn’t make it feel like they have to climb Mt. Kilimanjaro to get there. People want to leverage what they’ve got, have someone knit it together for them and do it in a way that helps solve a business problem.”

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Setting Canada up for long-term success is about talent and collaboration

Minister Navdeep Bains talks to DX Journal about Canada’s innovation economy

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Canada’s Minister of Innovation, Science and Economic Development, Navdeep Bains. - Photo by DX Journal
Navdeep Bains, Canada’s Minister of Innovation, Science and Economic Development, speaking at CIX2018. Photo by DX Journal
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Canada’s $1.26-billion Strategic Innovation Fund is being used to provide investment for everything from aerial firefighting technology to satellites for the global shipping industry. The fund is just one of the ways the Trudeau government is emphasizing innovation and the new digital economy in its economic policies.

In an interview with DX Journal at CIX 2018, Canada’s Minister of Innovation, Science and Economic Development, Navdeep Bains, gave his perspective on the continuing efforts of the Government of Canada to support innovation across the country.


Navdeep Bains on how Canada is driving innovation

“The government really understands that we have a very special moment, that Canada is looked at as a leader when it comes to innovation,” Bains said. “Part of that success is attributed to the fact that we’re investing in people. We’re really focussed on not only developing incredible Canadian talent, but how we have access to global talent as well.”

That special moment is not only helping promote successful Canadian startups and businesses – it’s also encouraging technology companies such as Amazon and Salesforce to increase their footprint north of the U.S. border.

Canada is also getting recognition for its innovation and technology ecosystem, as evidenced by the recent announcement that Montreal will host an upcoming G7 conference on AI technology, as part of the larger Neural Information Processing Systems (NIPS) conference. The event is the largest congregation around AI and machine learning in the world.


Navdeep Bains on private and public sectors driving innovation

Bains said the focus for him and the federal government is placing a priority on people, with specific attention to diversity.

“We’re making investments in education – in lifelong learning through coding, and really leveraging immigration,” Bains said. “It’s about tech adoption. It’s about commercialization. As we invest in talent, we’re also very focused on making sure that companies have the ability to scale up.”

In order to support scaleups, Bains said the government is focused on providing access to the best technology and enabling commercialization and speed-to-market.

“That’s really the focal point,” said Bains. “How can we help companies deal with talent and people? How can we reskill and upskill Canadians? And how can really help the technology aspect? This combined with a culture of collaboration where everyone is working together is making Canada an innovation leader.”

Canadian startups and technology companies are a focal point for the Canadian’s government’s innovation approach. The federal government recently made a $25-million investment into the Creative Destruction Lab, founded at the University of Toronto, which it hopes will create as many as 22,000 jobs as well as help accelerate and support startups and AI-based companies.


Navdeep Bains on setting up long-term winning conditions for tech and innovation

Bains stressed that talent is key to future development in Canada, and cited the federal government’s recent budget as proof that the country’s resources are being directed toward the education and collaboration.

According to Bains, the government’s focus on people will have lasting importance.

“I really think that’s a key turning point for us to demonstrate success for decades to come,” he said.

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Canada’s next big act is training scaleups

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By Jack Derricourt & Chris Hogg

Jack Derricourt is the Managing Editor of Digital Journal and a contributing editor to DX Journal. Chris Hogg is the President of Digital Journal Group.

The Canadian technology landscape is booming.

Canadian companies took in $2.5 billion in funding in the first half of 2018, the strongest first half since 2000. Corporates have announced large-scale investment plans to invest in innovation and digital technology (CAE recently pegged $1 billion for the efforts) and post-secondary institutions are breaking ground to house future generations of talent (the University of Toronto is building a 14-storey building to be completed by 2021).

The Canadian technology landscape is ripening and readying for an influx and growth of more mature, internationally-focused ventures.

While scaleups make up less than five percent of Canadian companies, they create half of all new jobs in the country.

On September 26 in Toronto, Elevate ScaleUp will seek to provide helpful insights into the problems facing scaling companies. Presented by CIBC and Osler, the event features startup veterans sharing their experiences.

DX Journal spoke with Julia Kassam, Managing Director, CIBC Innovation Banking, to find out more about the next big act in Canada’s innovation space.

DX Journal: With innovation ecosystems forming across Canadian cities, what excites you the most for startups in Canada?

Julia Kassam: From coast to coast, we’ve hit our stride as a community. The Canadian startup ecosystem has never been stronger and it is launching Canada into the global spotlight. Success stories about scaling companies of all sizes, in different industries, are generating the attention of investors and aspiring entrepreneurs. We are gaining a reputation for being diverse, collaborative and competitive.

This means that Canada is no longer an occasional destination, but a critical location for international investors to regularly visit, and for global brands to establish roots and drive their own corporate growth.

DX Journal: Canadian policymakers have made strengthening the venture capital sector a priority, with the launch of Venture Capital Action Plan (VCAP) and Venture Capital Catalyst Initiative (VCCI) underway. What does that mean for startups and scaleups?

Kassam: After years of lobbying by the Canadian Venture and Private Equity Association (CVCA), the previous government took our sector’s advice and launched VCAP as an arms-length funding strategy. VCAP worked as designed; venture capital funds benefited from the capital raised and invested in several early-stage companies. The new funds that should be raised under VCCI will capitalize on that success and strengthen the sustainability of Canada’s venture capital ecosystem.

What this means for entrepreneurs is that the federal government recognizes that VCAP was an appropriate initiative, and that to fuel the innovation economy, companies need a robust venture capital ecosystem to move from startup mode to scaleup mode.

It’s a really strategic and exciting initiative because later-stage capital will help accelerate the growth for companies who need to overcome commercialization hurdles, expand into new markets and compete on a global scale.

DX Journal: Many startups struggle to scale because they don’t have the right senior talent. What is your sense of how well positioned Canada is with experienced leaders?

Kassam: Although Canada has established a reputation for developing world-class academics and innovators, we do need to attract experienced executive talent. Everything moves at an accelerated pace in a scaleup, and the business will bend and flex in ways it never has. Canada needs more leaders who know what it takes to grow globally and ensure scaleups are well-equipped to navigate and accelerate growth.

One big benefit Canada has that helps here is as a result of our proactive immigration policy – the ability for Canadian scaleups to attract skilled talent is getting easier; our country realizes that to keep pace with scaleups, concentrated efforts are needed to establish Canada as a global technology powerhouse.

DX Journal: Canada has also been able to attract tech titans such as Google to open up offices in Toronto. What role do they play in the scaleup economy?

Kassam: They serve as training ground, but also as a competitor for talent. In the best case, people learn what it takes to be part of a leading innovator while being trained by experienced executive talent at the local divisions of firms such as Cisco or Google. For scaling companies, the opportunity to pilot their innovation becomes a realistic opportunity which can flourish into a partnership that may lead to an acquisition. A big opportunity that emerges as a result of large tech companies choosing to set-up an office in Canada is an acceleration of human capital development for the ecosystem.

What we are also seeing more of is that global innovators are setting up their R&D centres in Canada. A great example this summer was Samsung announcing an AI Centre located within MaRS, led by a Toronto-based academic. Again, another opportunity for scaleups to be close to the heart of global innovation. That is huge potential waiting to be unleashed.

DX Journal: How is the Canadian startup ecosystem helping to train talent?

Kassam: Serial entrepreneurs and investors share mistakes and success stories which help shape and accelerate scaleups through collective learning. What truly makes the Canadian tech ecosystem unique is our mindset to foster entrepreneurial spirit; and a great example of how we do that is by bringing the startup community together.

Elevate, Canada’s largest tech festival and one that CIBC Innovation Banking is sponsoring, is the perfect example of creating the right information and network opportunities so that we can collectively benefit from the existing momentum in Canada’s innovation ecosystem and drive our entrepreneurial culture forward.


DX Journal:
What’s the next step for the Canadian scaleup story?

Kassam: Canadian scaleups will continue to tackle the unique challenges that come with scaling a business; however, they will think in a global context earlier than ever before. Scaleups need to strategically choose the right capital partners for their growth – ones that open doors to new markets. There needs to be an emphasis on attracting top talent earlier in the growth cycle to help drive international perspectives and opportunities.   

To hear more from industry leaders who have scaled real businesses (and have the scars to prove it), get a ticket for Elevate ScaleUp, happening September 26, 2018 in Toronto. Presented by CIBC Innovation Banking and Osler, the event will provide real insights from entrepreneurs and tech veterans who have spent years in the field, on everything from hiring, to financing, to distribution.

 

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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Bumble launches fund for investing in female founders

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Bumble
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The popular dating and social networking app Bumble announced a new initiative Wednesday that will see it investing in women-led businesses.

Announced via a blog post from Bumble HQ, the new fund will focus on early-stage investments to women-led startups, particularly those run by women of colour and women from other traditionally underrepresented groups.

“The gender gap in venture capital is staggering, particularly for women founders of color. (B)umble, a tech company (with) an 85% female workforce, wants to be part of the solution, wrote Whitney Wolfe Herd, the CEO of Bumble, on Twitter. “Today we launch Bumble Fund to invest in women ignored by the establishment.”

The point of the fund is to help those founders raise capital for their ventures.

According to Forbes, Bumble has committed over $1 million so far, and says it will invest anywhere between $5,000 and $250,000 in the companies it selects as part of the fund.

Some businesses that the new fund has already committed to are: BeautyConCleo CapitalFemale Founders FundMahmee, and Sofia Los Angeles.

Mahmee is a “Headliner” from Backstage Capital, a VC firm run by founder Arlan Hamilton that invests in “underestimated” and underrepresented founders.

According to the Bumble blog post, the company isn’t stopping at the five commitments they’ve listed — they’re continuing to look for businesses to support, and recommend that interested parties download the Bumble app and get set up with the networking platform within, Bumble Bizz.

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