Making money from SaaS
The core promise of SaaS is that it will help you deliver services more efficiently. Instead of trying to manage software projects (which can easily get expensive and out of control) a company can outsource non-core development and deploy an SaaS solution almost instantly. In the current economic downturn many people have been watching SaaS vendors closely to see whether they struggle or thrive. On paper they are cheaper and allow businesses to focus on their core strengths, but would companies shun the risk and element of change in uncertain times?
There have been a few earnings announcements over the last couple of months that are proving the SaaS backers right. Salesforce is the biggest ‘flag bearer’ for SaaS solutions, and it has exceeded analyst expectations and posted a 43% revenue increase from the same quarter last year. The good news doesn’t end there however. Concur, Taleo, RightNow and many other SaaS providers are also posting record quarters.