Conference Presentation

Making XaaS Profitable: One Year Later

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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.

Presented By:

Thomas Lah

Executive Director, Technology Services Industry Association (TSIA)

Publish Date: March 17, 2015

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Peg Rodarmel, SVP, Subscription Services, Infor

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