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In this Workout, TSIA Executive Director Thomas Lah will refresh the data from 2014 and outline why a majority of the first generation of SaaS business models will never be profitable. This is a foundational understanding if technology companies are to craft profitable XaaS business models where technology is consumed as a subscription.
To make the case for the inevitable failure of SaaS 1.0 business models, we will start be reviewing the economic engine of traditional, license based software companies. From there, we will review the most common economic engine of current SaaS providers. Next, we will overview the multiple premises being used to defend the viability of the current unprofitable SaaS model. Unfortunately, TSIA believes the current defense logic does not hold, and we will review the failure points in the SaaS 1.0 model that are already presenting themselves in the data. Finally, we will outline the parameters of a viable SaaS business model.
TSIA firmly believe technology consumption is moving in the direction of pay as you go, SaaS like models. The point of this presentation is to highlight the clear reality that profitable, sustainable, SaaS business models have not yet firmly established themselves in the public domain. It is this reality technology executives must consider as they pivot off of their legacy business models and toward and new ones.
Executive Director, Technology Services Industry Association (TSIA)
Publish Date: March 17, 2015
TSIA is well worth the investment. This is the one place where you can come and get a fusion of ideas that you can then marry up to the goals and objectives of your organization and boil that down into several actionable plans that you can implement over the next 6 months to a year.
Peg Rodarmel, SVP, Subscription Services, Infor
The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.