Backblog | Software as a Service (SaaS)

When old becomes new again, ISVs look to telecom for pricing inspiration. For decades, the telecom industry has been honing what other industries are only now getting into – business models that start with simple subscriptions then add complex pieces such as sign-up/activity/event fees + bundles + add-ons + incentives + promotional products. SaaS operators are evaluating new ways to create multiple revenue streams from each customer by blending limits and usage (usage being the “activities” in which end-users engage in consuming or interacting with goods and services).

With all of the recent marketing hype surrounding SaaS ERP, you might be surprised to learn that it only commands 7% of the 2011 global ERP market share by software sales. According to a July, 2011 report by Gartner Research, this translates to a roughly $1.7 billion (U.S.) slice of the $24.3 billion ERP software pie.

Here’s a challenge: Go to any enterprise software vendor’s Web site and try not to find a reference to the terms “Cloud” or “Software as a Service” (SaaS). These terms have become so pervasive that they are almost indistinguishable from the software itself.