SAAS: Pay for performance

In the traditional packaged software world, people select software based on the needs they have today, including product functionality, product support and compatibility with others in their eco-system. You buy packaged software expecting it will meet your initial needs and hoping it will grow with you if and when your needs change.

You buy Software as a Service (SAAS) because it meets your needs today, but with a higher expectation that the products will be reliable, the publisher will support it well, and that any new features are added quickly, because every month (or whatever your SAAS subscription period is), you get to affirm or reject your decision to continue to use that solution.

This is a huge change in perspective that forces the SAAS providers to continually and rapidly improve their solution to ensure that their service is meeting end-user’s needs. It is akin to hiring a salesperson on commission versus paying them a fixed salary.

SAAS is a pay-for-performance model, which aligns the interests of the software provider with the interests of the end-user. This is significantly more reflective of the reality of end-user’s computing experience than traditional packaged software, and ultimately will lead to much higher satisfaction among end-users.