The existing Software as a Service (SaaS) business model is predicated on the thought that software development is difficult and complex. Development is the exclusive domain of talented programmers and the SaaS provider has those people and the skills to turn it into something of value to their consumer.
If you need more background, a textbook description is here
A new breed of tools, including this blog, have put programming power into the hands of non-programmers (like me). This has been a sea-change in the world of software development by enabling people entrenched in their business models to program solutions for their businesses. The change has been led by Web 2.0 but is being supported by initiatives that are directed at allowing people who are entrenched into their business to have a greater hand in developing their own software solutions.
The effects of this change have started to manifest themselves in the SaaS market already, but it’s just the tip of the iceberg. Being that software development, as we know it today, is no longer as costly as it previously was, the value applied to it will be lower. This will be reflected in the price people are willing to pay for a subscription to a SaaS solution (vs. doing something in-house).
I believe the SaaS model must augment itself by offering other services that are congruent to the focus of the software solution. An obvious alignment would be to offer consulting services alongside the software; i.e. A restaurant management software that is augmented by a restaurant consulting group. This model can be replicated to any business that already provides a service complex enough to be augmented by a piece of software.
Even the Telco space….more on that later.
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I agree the SaaS world is about to be turned upside down. Salesforce.com watchout!
I think that the SaaS tools that have been put in the hands of developers are also quite cool, and generate real momentum for the more popular SaaS implementations (like SalesForce).
These tools are APIs and when one looks at the Apple iPhone SDK, the Google SDKs for their phone and search engine, the API that SalesForce actively maintains genuinely offers a win-win among vendors who take care of the main product and customers who need some boutique solutions.
Personally, I think the expansion of tools for both users and developers is where the open source movement has gone in the last few years. Lots of people still get self-righteous and indignant whenever think think someone’s open source isn’t open enough (like Apple and Sun won’t GPL their OS code, but it’s open), yet the new really cool thing that gives one power and is free as in beer are these APIs – the high level ones for users or the slightly lower level ones for developers. All offered by the SaaS folks.