SaaS market dynamics

The graphic below provides a summary of the dynamics of the SaaS marketplace.  Naturally since SaaS have a lot of buzz right now everyone wants a bit of the pie and Gianpaolo Carraro provides a great description (and the image) on his blog of the different players and the most natural strategies that they can take to take advantage of the this growing market.

Whilst I don’t personally have a lot of involvement with active SaaS projects I recently took a look at a few areas where I have seen SaaS proving popular with customers that I work with and I saw an interesting trend. 

Lots of interest in SaaS during the early phases of the lifecycle, however once a products value was accepted in the enterprise and its usage grew substantially most of the SaaS services were brought back into the enterprise.  I am sure that won’t always be the case but it was surprising consistent. 

I guess such a lifecycle is not very surprising, however it does make me think that SaaS will be most successful where:

  1. the SaaS supplier can deliver some value – beyond simply scale – from hosting multiple customers on the same Internet facing infrastructure
  2. the service is by its nature shared,  with no single enterprise having ownership
  3. an individual enterprises demand for the service fluctuates considerably
  4. the SaaS application provides capabilities that are not available in enterprise products
  5. the integration with other SaaS or enterprise systems is either not required or is simple

Steve Richards

I'm retired from work as a business and IT strategist. now I'm travelling, hiking, cycling, swimming, reading, gardening, learning, writing this blog and generally enjoying good times with friends and family

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