The Rise of Pay As You Go Enterprise Software
SaaS has fundamentally changed the landscape because it removes the traditional upfront expense from the equation. The virtues of SaaS have been widely documented around the web. Our favorite SaaS advantage is the ability to offer constantly evolving platforms, services that adapt to users' changing needs. Rapid development and inexpensive deployment makes this possible for SaaS platforms. This adds up to a great benefit for customers over time. As the platform evolves and new features are added, customers get more utility and value for the same price. Another source of saving comes from eliminating the "upgrade cycle", which has been a traditional cash cow for legacy providers. The upgrade cycle is actually a hidden cost because users tend to assume that upgrades are optional, but when their version is no longer supported they are forced to upgrade or pay for fixes elsewhere. In SaaS, all users are always on the latest version of the software. Reserva delivers ERP-sized solutions at a Quickbooks-level price point. Customers can adopt an advanced enterprise system without risking upfront capital. Legacy providers have benefited from this dynamic because after putting up tens of thousands of dollars (or even hundreds of thousands) upfront, customers have no choice but to muddle through with the system. There is no other choice but to make it work. On the other hand, SaaS providers have to earn their customer's trust every single day -or risk churn.