The as-a-service business model

The as-a-service business model

Summary: Other industries are starting to take a lead from SaaS and learning lessons from the 'as-a-service' business model - even though most ISVs are so behind the curve they still haven't the least idea what SaaS really entails.

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It's interesting to see other industries taking a lead from SaaS and learning lessons from what I've started calling the 'as-a-service' business model. Especially when you consider that most ISVs still haven't the least idea what SaaS really entails.

An article republished yesterday on paidcontent.org is by guest author Mika Salmi, former president of Global Digital Media at Viacom/MTV. Time To Change The Lens: Media As A Service discusses the impact of digital distribution on the media industry and argues that the software industry's transition to SaaS illustrates what lies ahead:

"Shipping or downloading a static physical or digital product is a dying business. Pioneers like Salesforce.com, and now Google with their office apps, are showing how a 'product' is not a discrete thing. Rather, it's an ongoing relationship — with continuous updates and two-way communication — with customers and even between customers."

Sometimes it takes someone outside our own industry to be so clear-sighted about what's happening within it. Salmi gets right to the point without getting distracted by discussions of virtualization or subscription pricing. He identifies the core of the as-a-service business model as being the way that it changes relationships with customers:

"This is not just about putting up a pay wall and charging a subscription fee ... The 'S' in MaaS is not an afterthought or tacked on, it is the entire ecosystem attached to the content."

If only there was so much refreshing clarity within the software industry, where, as I mentioned in my last post, most people seem to believe they can simply plonk their existing software on the Web or into a pay-as-you-go subscription plan and be successful without having to make any other changes to the way they do business. The as-a-service business model is much more than that, requiring a real-time service infrastructure and culture, able to interact with and respond to the needs, interests and dynamics of customers and their own connected networks.

Topics: Cloud, CXO, Data Centers, Emerging Tech

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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4 comments
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  • Insurance policy

    For many small businesses, why would you want to invest into hardware and have to maintain that infrastructure?... The reality is that software companies must move this model down to the small business and show how a "monthly fee" (pay as you go) can save so much more money in the long run.

    In the end, the SaaS model is going to succeed based on the same old time-tested business model that most I.T. service companies forget about... Value.

    Provide services (or products) that are valuable and timely.
    troj65
  • RE: The as-a-service business model

    We at Cirrhus9 have been working to this end for a long time.

    The "S" in, our specific case, IaaS truly stands for SERVICE from our point of view. There is so much more going on then just setting up a virtual private data center for a client. You have to be agile and flexible in order understand the customers needs. Responding quickly for them so they can respond quickly to Market Demands.

    Our goal is a long term, successful customer relationship that, in the end, will not only keep the clients happy but bring in additional customers and revenue streams.

    This, in turn, will drive our eco-system and expand our user base by the good old fashioned "Word of mouth" recommendations that happy customers bring to the table.

    But, it's all academic if you don't understand how much of a vital role that "S" really plays in the scheme of things.

    Mike Michalik - CEO
    Cirrhus9
    www.cirrhus9.com
    mmichalik
  • Well now...here's a ringing endorsement of SaaS...LOL...LOL...ROTFLMAO!

    http://www.ubikwiti.com/blog/?p=576#

    And if this prognostication comes to pass...just how many businesses that relied on SaaS, will be around as well?

    Then of course there is always this scenario:

    http://it.toolbox.com/blogs/managing-infosec/what-to-do-if-your-saas-provider-goes-out-of-business-27674
    IT_Guy_z
  • RE: The as-a-service business model

    Good stuff, I have always said that their are two S's in SaaS and the second is more important. Witness my thoughts on the matter last month:

    http://ximix-blog.blogspot.com/2009/09/there-are-2-ss-in-saas.html
    Edgy Saas Guy