« Welcome to the new SaaS Week! | Main | SAP Takes Over Business Objects; SaaS Ramifications? »

I've heard a lot of talk about a big downside of SaaS, from the vendor's perspective at least, being that it means a lot less immediate money from each new sale, meaning that a business's revenue would be spread out over a much lengthier amount of time and less accessible for business growth.

So I was interested to find a press release by Five9 in which it decided to offer permanent access to its SaaS-based predictive dialer for a one-time initial purchase followed up by a yearly maintenance fee. In other words, the deal means customers can use the same pricing model for SaaS as if they were buying on-premise hardware.

The model certainly solves the initial problem for the vendor, but will the model be popular among customers? It is hard to imagine companies being willing to pay similar rates for permanent access to a service as they would for physical, on-premise products. But then again, the idea of paying upfront for future services is hardly new -- Web hosting companies have offered annual rates for Web server space for years, with a discount for customers who pay by the year rather than by the month. It will be interesting to see whether or not Five9 is onto something.

Posted by krissidanielsson in Vendors |Digg This|Add to del.icio.us

Trackback Pings

TrackBack URL for this entry:
http://www.ebizq.net/mt/mt-tb.cgi/2730