shift: the saas siren

Encyclopedia Mythica tells us this about the Sirens:

In Greek mythology, the Sirens are creatures with the head of a female and the body of a bird. They lived on an island (Sirenum scopuli; three small rocky islands) and with the irresistible charm of their song they lured mariners to their destruction on the rocks surrounding their island (Virgil V, 846; Ovid XIV, 88).

Delightful. So let's go back to the beginning.

The more I learn about Software as a Service (SaaS) the more I hear the Sirens. That's because their singing the buzz is building in volume every day - certain high-profile VCs are "only investing in SaaS" vendors. . .there are "SaaS Conferences" galore. . .you can't open a trade rag without seeing it. . .new analyst papers are popping up daily. This isn't "this year's object-oriented database" fad. . .it's serious. And disruptive as all hell to the "traditional software model" in which ISV A writes software that is packaged, delivered and installed by Company Z, for which they pay a one-time perpetual license fee and annual maintenance fees.

Let's take it as read Company Z would rather not pay a big chunk of change for certain sorts of software. Add the allure of Company Z being able to obtain access to the capabilities of ISV A's solution without having to invest in all of the people, hardware and networks required to operate that solution. Add to that the sizzling allure of Company Z having the option to buy just what they need, when they need it, and stop using it when they stop wanting it. It gets pretty compelling.

For ISV A, the attractions are equally interesting, but the challenges of delivering are far beyond what they've ever needed to address. They have to worry about maintaining service levels, more frequent release schedules, a greater focus on service, different sales compensation schemes, more urgent competitive pressures, and a sea-change in revenue streams from quarterly to monthly with no cushy maintenance stream to fall back on. . .

My management tells me to be to the point, so I'll sum it up like this: ISVs think they can make more money selling their software as a service, and they think their customers would prefer to consume it that way. Neither side entirely understands the implications of this in the long term.

Yes, you probably knew this already.