The Path to Profitable XaaS: 3 Takeaways from TSIA World INTERACT

Last week, tech professionals and executives from companies from around the world joined us in Orlando for TSIA World INTERACT, which focused on The Path to Profitable XaaS.?

At every keynote, the room was packed; the halls were filled with conversation between friends and colleagues; attendees found new connections in the Braindate Lounge; and the InteractZone was abuzz with new products and services.

Whether you made it to Orlando or not, this newsletter recaps three key takeaways of this conference, relating them back to profitable #XaaS .

What’s Harder?

Key takeaway number one: Monetize services.

“What is going to be harder? Monetizing services, or laying off 20% of your workforce?” [ Thomas Lah ]

After an introduction by TSIA CEO J.B. Wood , Thomas Lah kicked off TSIA World INTERACT with the realities facing the tech industry today. He cited the 507,023 layoffs from 2022-2023 (compared to 300,000 during the Dotcom bust.)

It’s clear we’re living in an unprecedented time in our industry’s history. So what can we do?

Thomas answered this question with the iron triangle of #SaaS and XaaS profitability:

1. Monetize services
2. Migrate commercials
3. Explore new growth engines

His point about monetizing services hit hard—and it’s likely the easiest to execute:

• 49% of SaaS companies monetize #CustomerSuccess .
• 82% of SaaS companies are monetizing support.

Further, companies that monetize services have found significant benefits; for example:

• Companies that monetize customer success have a 10% higher expansion rate.
• Companies that monetize customer success are 22% more likely to be profitable.

Key takeaway:

"If you have a service motion that allows business value for the customer, you damn well better charge for that." [Thomas Lah]

If you want to hear about the full iron triangle, you can watch the full keynote (which we highly recommend you do) in 4K on YouTube now!

Put the “I” in AI

Our second takeaway: While AI provides a myriad of possibilities for the industry, there are two key considerations that are relevant to every user.

“Of course security is going to be a big thing, and employees are going to be a big thing.” [ J.B. Wood ]

This keynote focused on the threats and opportunities of AI in #B2B . TSIA President and CEO J.B. Wood led a panel discussion with:

Kevin Bowers , Director, Field Services Research, TSIA Maria Manning-Chapman , Distinguished VP, Education Services Research, TSIA Jack Johnson , VP, Customer Growth and Renewal Research, TSIA John Ragsdale , Distinguished Researcher, VP, Technology Ecosystems, TSIA Marc Troyan , Sr. Director, Customer Success Research, TSIA

While they covered a multitude of topics—including revenue generation, product adoption, #CustomerTraining , hardware services, and service delivery—there are three standout takeaways that are relevant to every user.

1. Using data, AI could possibly revolutionize the sales cycle with hyper-personalized offers.

“We, as an industry, we use the word outcomes a lot, but we really don’t sell and deliver outcomes. I don’t know how you can talk about outcomes without talking about industries. AI is going to know a lot about the individual company we’re serving, and the job role of the person we’re talking to, and we can say, this feature is going to help you because…” [J.B. Wood]

However, this requires data, begging the question: how much data will it be allowed to use?

2. Speaking of data: companies (and individuals) must make sure that their data is protected.

“You can go out right now, and you can just go to a general public AI tool, and it will come back with definitive-sounding stuff. It has to be YOUR content, and it has to be protected, otherwise it’s their content.” [J.B. Wood]

“You have to be careful. This has to be done behind the curtain, behind the firewall. This is your data, this is your secret sauce.” [Marc Troyan]

3. When using AI, new skillsets are involved—that not all employees may have.

“These [AI] tools are only as good as the questions you ask. The skill set we do not teach in schools, or universities, or in our companies, is socratic questioning. What is the art of asking the right question? [John Ragsdale]

If you’d like to hear the full discussion, you can watch it in full on YouTube now.

Embrace Convergence

Our last takeaway comes from an insightful keynote by Jim Roth , EVP of Customer Success at Salesforce :?

“Are we showing up together as one company, as one experience? We don’t want to show up like our org chart. Your customers shouldn’t feel your org chart, and we can all make progress on that.” [Jim Roth]

With helpful metaphors and storytelling, Jim explained why Salesforce converged customer success, customer support, and education services into one super discipline to create a more integrated customer experience, as well as operational synergies.

“Why wouldn’t you put all the services that your customers need throughout the lifecycle together as one super-service? Why can’t this be our new definition of customer success?” [Jim Roth]

When we operate in silos, customers are not seeing the full experience—they’re having multiple experiences, when they should be having one unified experience. For example:

“Think about a customer… they have an open support case, and at the exact same time, we’re sending them a marketing campaign asking them to buy something else. Does that feel connected…or does it feel like a bunch of departments? It feels like our org chart. And you never ever want your customers to feel your org chart.” [Jim Roth]

If you’d like to learn more, watch the full keynote now on YouTube.

It’s Time to Bust Silos.

If you couldn’t make it to TSIA World INTERACT this year, we invite you to join us in Las Vegas this October 16-18 for TSIA World ENVISION , where the theme is Busting Silos to Drive Profits and Growth.?

We’ll be talking more about the pervasive issue of silos at our companies, and how to overcome them to become a more unified, effective, and thriving workforce. This conference is also packed with opportunities to network with industry experts and explore new technologies and solutions. We’d love it if you could join us for this experience.

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Join us at the industry’s business transformation conference: TSIA World ENVISION , this October 16-18.

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