I can’t tell you how many board meetings I’ve been in lately where the agenda included a discussion of the merits of software-as-a-service as a potential business for the company. The one thing that is constant about these discussions..."
Jeff nails it again -- after 20 years of building decision support systems, it is clearly evident to me that SaaS is something "whose time has come". I've seen a recurring pattern in my career, where once the software is implemented and the team leaves -- interest in the project starts to wane and it become part of the normal day to day business. That means all the care and feeding necessary to keep a application delivering value goes away and with it, the value disappears. SaaS fixes the incentives for everyone -- so that
1. The customer continues to get value
- let's face it, lock in from having proprietary systems is going away -- lockin is only achievable by continually delivering value
2. The software company aligns cash flow to execution rather than large upfront payments and then a smaller revenue stream. Thus behaviour across the company is aligned to maintain and grow that revenue stream. Last company I worked - the biggest deals actually were bad for the company, since once they were sold, the company had higher expectations to meet and everyone ran off for the next deal, rather than execute the deal we had just sold.
There are obviously many concerns with SaaS that Jeff touches upon but I think this will be good for the industry as the current model is busted in my opinion.
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