Phil Wainewright of ZDnet addresses the recently announced SaaS strategies of SAP, Adobe and Microsoft
The challenge: transition from a business model where you earn revenues by selling perpetual software licenses to one based on monthly subscription payments -- while continuing to report rising revenues and protecting your profitability. Can it be done?
... Microsoft: ‘Speak no SaaS’. The world’s largest software vendor is pursuing a strategy of launching services that are complementary to its existing licensed products, while refraining from offering services that compete directly against any form of licensed on-premises software. It’s betting that most customers will prefer to stick with trusted, established products rather than switching to online alternatives, giving it plenty of time to build up revenues from those complementary services. Choosing not to offer direct on-line competition to its own products may seem like a head-in-the-sand strategy, but you can hardly blame Microsoft for seeking to buy time for its existing business model while it develops a services strategy. The problem is that, in providing online services for customers without putting the core products themselves online, Microsoft risks sending customers elsewhere in search of a more integrated user experience. ...
Source: SAP, Adobe, Microsoft: three monkeys take on SaaS
In general Phil has a point that the current business models are what's at stake in the short term. I do not agree with his assessment that Microsoft would struggle providing users with a more integrated user experience in my perception that's exactly what Software + Services is all about.
