NEW RESEACH: Evolving the SaaS commercial model

The SaaS business model is a permanent and growing feature of the SITS market. Start-ups predominantly opt for the model and we are not hearing of much PE/VC funding for businesses wholly reliant on the perpetual licence/on-premise model. Providers are highly valued but those high valuations are under scrutiny in the light of on-going and heavier losses from established SaaS pure plays, (who are still in growth mode), which raises the questions of whether they are they paying too much for growth, and when and what level of returns can be expected.

Debate about SaaS success metrics can descend into a playground-style shouting match but the reality is that the SaaS model is different to the on-premise licence model, so the performance of SaaS companies does need to be assessed using different or at the least additional measures to those used for vendors with licence-based models. But the bottom line is still the bottom line and at this stage in the market lifecycle established SaaS vendors need to provide convincing evidence of when the rising tide of losses will subside sufficiently to bring profits into view, and the likely level.  

The latest ESASViews research note, Evolving the SaaS Commercial model, examines how the SaaS commercial model is developing and what we can expect. As always, eligible subscribers can access the research here, otherwise please contact Deborah Seth for information about our subscription services.  

Posted by Angela Eager at '17:24' - Tagged: software