Cloud, Digital, SaaS, Enterprise 2.0, Enterprise Software, CIO, Social Media, Mobility, Trends, Markets, Thoughts, Technologies, Outsourcing


Contact Me:

Linkedin Facebook Twitter Google Profile


wwwThis Blog
Google Book Search



  • Creative Commons License
  • This page is powered by Blogger. Isn't yours?
Enter your email address below to subscribe to this Blog !

powered by Bloglet


Friday, April 08, 2005

Software As a Service Business Model – Overwhelming Issues

I wrote a small piece on SaaS adoption.Speculations abound about whether the software industry is going to move to a new business model of operations. The most common revenue model is software as a product with upfront payment for a perpetual usage. The trend to offer software as a service with payments over time and based on usage is emerging. The big spenders like Telco’s, Banking and Financial Services, Healthcare, Transportation players may not find hosted solution a natural fit. The business drivers force them to get cutting edge solutions that would improve competitiveness and not necessarily something that looks to have good architecture and seems logical or fashionable. It will take more time to see what percentage of customers will find the software as service offerings attractive, change their buying habits and move to annuity contracts.The application architecture, schema, the business model including dealing with channel partners and switching costs for existing customers are major impediments. Overwhelming organizational changes would have to be managed in the transition to on demand model- It is highly unlikely that existing software vendors could manage the transition smoothly. It is also too early to make a conclusive call on whether the software vendors are going be more comfortable with annuity revenue stream not to speak about the hit professional service firms may be forced to take – In all, not a very easy path lay to embrace Software-as-a-Service model. Please read the full piece here.

Category :
ThinkExist.com Quotes
Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"