SaaS Represents the Commoditization of Business Function
June 26, 2014
Grazed from Utilizer. Author: JP Morgenthal.
North Bridge in partnership with GigaOm Research released their 2014 Future of Cloud Computing – 4th Annual Survey Results. As you examine the 124 slides, one thing is obvious that the greatest growth in cloud computing is coming from Software-as-a-Service (SaaS). Market research like this is very important because it provides tangible proof for our anecdotal hypotheses. That said, the report does not extrapolate what is the most interesting facet of SaaS hyper growth—59% in three years—the model for commoditization of business function is market validated.
Like all things that get commoditized, differentiation or uniqueness that keeps economic value high becomes less important than the common, undifferentiated features driving costs down. The interesting thing is that lower costs is a side-effect of commoditization as commoditization can only occur when businesses identify that they can achieve the same goals with the commodity item as they can with the unique one…
Hence, businesses are speaking with their dollars and telling the market, we?ve figured out how we can operate our businesses equally well using this less complex, highly-configurable SaaS version as we can your expensive, monolithic, high-overhead, licensed version of this business function…
Read more from the source @ http://govcloud.ulitzer.com/node/3112918