Software as Services

The as-a-service business model

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Business models
Customer experience
Social computing

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.

posted by Phil Wainewright
October 5, 2009 @ 1:39 am

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