Disruptive technologies tend to rewrite the rules of profitable growth and competitive advantage in a sector. SaaS is no exception. But we expect that three fundamentals of success in software-platform power, scale economics and product stickiness-will continue to apply to software as a service as they have in packaged software. In addition, one new factor-gaining deep customer insights and finding ways to profitably act on them-will be crucial.
Companies are facing a choice: defend their turf and risk being bypassed or transform their business and embrace the SaaS model. Most are making the smart choice to experiment and evolve, using the three strategies: Commit to a strategic path and align resources through Flex pricing, attack adjacencies and better in the cloud functionality, Embrace customer insight and intimacy, and Organize for innovation.
