Will SaaS go the way of of ASP’s

I subscribe to the searchCIO email notifications. It was with some interest that I read the an email from the editor with the same title as this post.

The basic synopsis was  ASP used to be the latest industry hype. That industry went south, leaving customers in the cold. Some people draw parallels between ASP and SaaS.

 At a Babson College Executive Education session on SaaS last week, attendees voiced their concerns regarding the potential life span of the SaaS vendor market and whether they should wait for an industry shakeout — similar to that in the ASP market a few years back — before moving toward adoption

Apparently at this event Jeff Kaplan of ThinkIT Strategies spoke and addressed this by saying, as with any company you deal with. You should do your due diligence on them. Good advice, damn good advice.

My personal view is that SaaS will survive the hype cycle. I think this for several reasons.

  1. The ASP value proposition was much more limited than SaaS. People are buying SaaS for the value it adds, ASP was always an outsourcing deal designed to cut costs
  2. The decisions on buying SaaS are in the business mostly, meaning people buy SaaS because they use it, most other software purchases are different, people use software because they've bought it.
  3. The flexibility of the subscription model allows a much more fluid adoption approach. You can add or  subtract subscribers as you  want.
  4. Finally, ASP's were undifferentiated, SaaS providers actually have different propositions, fulfilling different needs even within the same segment

There are always risks in any IT deal. Mr Kaplan's advice is about as good as i've heard it put. You are accountable, even beholding to your shareholders, to make good decisions based on a decent review of any proposed vendor.


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