Software as a Service

February 9, 2007

I had some time today to catch up on my “links for you” (links your friends post to their account they believe you would be interested in) at and I cam across a link to an article a friend of mine had sent to me a week or two ago on the RSS reader. The article entitled: Death of the RSS Reader / Software as services was written in December 2005 (Yes) by Phil Waineright who rights an “Applications on demand” blog for ZDNet (I added his blog to my list because he is dead on here). While I am not sure that he has captured the full value of “Software as services” (which I believe goes way beyond RSS) I think that he has a point.

Software as a service (SaaS)
The idea of software as a service has been around for quite some time. SaaS is well documented on the web and has its own place even at Wikipedia: SaaS. I was involved in a few startups that were early adopters of the idea except we called ourselves Application Service Providers or ASP’s. Back in the day we built applications and “rented” the use of those applications out to companies in return for a monthly fee (the holy of all holies – recurring revenue). These applications were maintained by us. We handled the server and network architecture (we obviously outsourced this), we updated the software and managed the data. The client simply opened a Web browser and worked with their data.

There is however, a big difference in SaaS to the business (b2b) and SaaS to the consumer (b2c). A while back the industry thought that the b2b software industry was going to explode. Services between companies have certainly moved to the web and that continues to increase, but not nearly as much as the b2c side.

Today you can see software as a service almost everywhere. Google and Yahoo compete for the consumer’s attention all of the time with their applications which help you do everything from manage links and video to email and favorite TV shows. There are also many other smaller applications (who are continually swallowed up by larger organizations) that offer niche market applications like Flickr and Dandelife to name a couple.

I think a notable Software as a Service in the consumer space is PeaPod. While you may not think about it as a traditional SaaS, for the consumer it is most definitely a contender. What better services then the ability to virtually attend a supermarket, order some goods and have those goods delivered to your home. On that same level, you could include Netflix, Blockbuster and the like in their as well.

While the RSS Reader online can certainly be considered a service, I am not sure that he has done justice to the explosion in SaaS on the consumer side.


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