The last few years have seen the success of
Software-as-a-Service, or SaaS, spread beyond poster child
Salesforce.com to many other well-known companies: Taleo, NetSuite,
SuccessFactors, Concur, and more. But there is always a
contingent that asks: is SaaS just hype? Or rather, is this a permanent
change in the technology landscape?
Want to learn about security architectures for SOA? Attend ebizQ's upcoming webinar. Learn more.
It does seem that an overwhelming number of software companies
are opting to release their products from the cloud as opposed to CD
form. The world now accepts Saleforce.com’s initial premise
of software living on the Internet as a core tenet, and this
methodology is quickly spreading beyond software. All around us we see
everything from consumer product companies to medical services adopting
the subscription model.
In fact, if you look beyond SaaS, you'll see the subscription
model taking hold everywhere. Take for instance: Zipcar, instead of
buying one car, subscribe to an entire fleet; Netflix, don’t
buy DVDs, subscribe to a service and get as many movies as you want for
as long as you want; Bag Borrow or Steal, as noted in the
“Sex & The City Movie,” why spend all your
savings on one designer bag when you can have access to every design
for every occasion? There are also medical practices moving to a
membership model, accountants moving to a retainer model, even farms
allowing buyers to subscribe monthly for fresh produce. On Wall Street,
the one bright light is the wealth management industry, with a
fees-based approach, based on assets under management, which translates
to steady, predictable revenues.
And it’s no wonder all of these industries are
moving towards the subscription model. With more selection, greater
control, and fewer upfront costs, subscription services make it easy
for everyone to buy less and subscribe to more.
So why is this model so attractive? The reasons that made SaaS
the dominant model for creating and delivering applications are the
same reasons why subscriptions are taking hold in all other industries: