At the highest level, there are two core ways issues with service agreement compliance will end up costing you, the service provider, a significant amount of money:
The software industry is in the midst of a dramatic shift. No software publisher big or small will be left unaffected by enterprise and consumer end-users’ growing preference to consume their software as on-demand services. According to industry-leading analyst firm IDC, by 2010 nearly 65% of new product from established ISVs will be delivered as SaaS services and nearly 85% of net-new software firms coming to market will be built around SaaS service composition and delivery. As a software publisher, the question you should be asking yourself is not how to avoid the cloud – but how to navigate a migration to the cloud for all or some of your applications as quickly and efficiently as possible. In a recent presentation, Saugatuck Technology’s Mike West made it quite clear that every aspect of an ISV’s business will be impacted by a shift to SaaS, from business planning and management, technology development and operational processes, and even corporate culture.
I don’t have many pet peeves in life. Okay, my kids will tell you I’m the typical dad who gets irritated when they leave the lights on in their rooms and monkey with the thermostat. But besides that, I roll with things pretty well.
Then comes perhaps my only work-related peeve: the misuse of the term “license”. I am sure it stems from my IBM days where teams of gifted lawyers spend oodles of cycles slicing, dicing, chopping and julienning seemingly simple concepts and produce software license agreements of Tolstoyian proportions.
You can’t be in a leadership role in the technology industry and not be involved at some level in the debate between pay-as-you-go and lump-sum type revenue models. Without question – lump-sum dominates the technology market space – for software – and for features-on-appliance (i.e. software). But the emergence of SaaS has opened up the debate.
The debate is quite heated. Opponents of pay-as-you-go say things like “it’s too complicated”, “enterprises won’t go for it”, “software vendors can’t convert to it”, “it’s a fallacy to think that SaaS uses pay-as-you-go”.