A very informative article about Delivering software as a service has been published by McKinsey.

Proponents of the shift

  • Bandwidth costs are continuing to drop
  • Customers feel they would have more control if they paid every month / cycle as they would have the option to switch easily
  • Customers are frustrated by buying a software license and paying for upgrades
  • A few early successes out there - salesforce.com
  • Advancement in technology to provide Saas

Changes affecting the enterprise software vendors

  • Development teams don’t have to maintain multiple versions of the product(s)
  • Gain ability to deliver software from large data centers
  • Re-think the sales model
  • Changes to the customer service departments - mission critical problems to be solved quickly
  • Handling problems not directly in control - like network outages, power outages etc
  • Performing software updates while software in “online”