Over the past decade there is a high volume of discussion about Software-as-a-Business (SaaS) business model. It is amazing to see how many software parts and software driven experiences (Ex: Netflix, gmail) are purchased online. There are novel products that are only cloud native now unlike in the past.
About fifteen years back, I was leading the then Subscription Platform inside Microsoft. It was a strange thing that was associated with narrow band Microsoft Network (MSN) subscriptions. Slowly Xbox Live Gaming subscription service was emerging. We saw an opportunity to extend the same model for applications on Windows. However the time did not arrive then, primarily because the enterprises were buying licensed software and there was no notion of Cloud Computing then.
Now Cloud Computing and SaaS Business Models are maturing fast. There are new cloud native players with SaaS Models including Salesforce, Workday, ServiceNow, et al. And there are incumbents fighting to stay relevant and grow further including: Microsoft, Oracle, Adobe, et al. Not to mention the new comers like Amazon and Google working on gaining a fair share to diversify their revenue sources. Crunchbase claims that there is a potential slow motion crash of SaaS; I don’t agree with that much.
Cloud Computing has been a boon to unshackle the stronghold of a few big players. Cloud Computing meant cost of innovation has been lowered which directly translates into better and faster innovative offerings coming out. Our expectations are growing as well.
No media site can afford not to have recommendations or engaging content.
No sports site can afford to not have live feed, commentary, and video.
No HR department can just entirely rely on homegrown slow-IT software.
No Marketing department can rely on a handful of online sites to drive traffic.
No retailer can sit happy with just a pretty well stocked store; they have to hustle with online, mobile, social, and personalized experiences.
All these engender novel offerings in the market. For example on 12-12-2017, JetBlue Airways sold #GetPacking game on Amazon.com as a way for customers to quickly earn free tickets. The experiment was a challenge and faced initial hurdles (see here). Despite that it is important to realize the new experiments coming along.
Bessemer Venture Partners published 2017 State of the Cloud which provides some excellent insights for how to think about the Cloud. They briefly touch upon the revenue models and opportunity for differentiation.
I fully anticipate continued growth in innovation, offerings, and revenue from Cloud Computing powered by SaaS Business models. Let us get our oars ready to sail in that direction.
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