SaaS Business Models: Towards an Agile Business Architecture

When investigating SaaS business models, one consistent message comes across: A new level of agility and responsiveness is required. This article truly sums it up.

“A lot has been said about what Software as a Service is and is not - and we’ve been part of the noise. I really feel however there is something bigger going on. There is a tsunami coming and SaaS is only one of many waves.
People have said SaaS is:

• A delivery method enabled by the spread of low cost broadband
• A technical architecture (multitenancy) that provides higher efficiency and lower costs (in the best implementations anyway)
• A business model led by direct responsibility for service to end-users
• An alternative to the traditional capital investment model of software licensing
• A low cost way to take advantage of applications and services for SMBs
• Gaining acceptance in enterprise business
• A potentially disruptive business model that could end the dominance of traditional software vendors
• An opportunity that allows new players to “level the field” against intrenched industry leaders
• A flash in the pan that will eventually morph into some other even cooler marketing-led hype.

I would say all of these things are true - and more - or less. In another way however, these observations miss the point. An illustration might help:

Business as Usual

In the “traditional software vendor” business model, the buyer is the ultimate customer. If the buyer is a company - no matter how large or small - the buyer is the filter between the people who use the application and the vendor. If you add in a sales or service channel, a secondary source, the relationship with end-users becomes even more tenuous for software vendors.

Think about that.

More Info... Saas Business Model