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Why is SaaS the preferred model? Does anybody have experience with other business models?


#21

My Experience

I started with desktop software 21 years ago. Have slowly switched to SaaS model (using the same Desktop software) over the last 5+ years. New product (same market) is pure SaaS.

For us SaaS is much better. The revenue follows the benefit closer. So those users who really benefit use it longer and pay more. If you have one price for all users then some are under paying and some are overpaying (compared to benefit) so you may lose some customers who would be overpaying b/c your are charging too much up front, or lose revenue to those customers who are under paying.

It also lets us afford spend time helping those customers who benefit the most.

One Caveat:
I think the PROBLEM you are SOLVING will strongly influence the revenue model. I know someone who sells wedding planning software. I think that for a non professional user of that software, the SaaS model makes little sense.
OTOH, I know someone who sells Property Management software. SaaS is PERFECT for that.


#22

Yes, I see it happening all the time but our app is essentially for individual freelancers and many people were happy that it is NOT a SaaS and they own their data. Maybe one day we’ll do some business-related features with a subscription.


#23

BTW, SaaS is a REVENUE model and independent of the architecture.
I.e., you can be SaaS and still have the user own their own data.

You could have desktop software where they have their data locally but it’s a subscription service.