Saas Blogs: When Should Software be Sold Pay Per Use?

On his SaaS Blogs - understanding the Software as a Service revolution, Sinclair Schuller asked the question:

When Should Software be Sold Pay Per Use?

Andreas Müller of WIN-Verlag GmbH & Co.KG recently asked me:

Which pricing models and use models for 3D-Software do you think will prevail in the future? What are the odds that SaaS will establish itself in these markets?

This is hard to predict. Suppose you were in the movie business in 1980. You had one screen, and life was good. With the advent of multi-screen complexes, movie goers could frequent your establishment and have a choice. Business was booming. How could it get any better than this? Then came the VCR. Suddenly people were renting tapes and not showing up at your complex. The video rental store became king. DVDs replaced tapes and shop owners no longer had to admonish patrons for not rewinding. :-) How could it get any better than this? Along came the internet. Now people don’t want the hassle of picking up/dropping off the movies. They want the movie. They don’t want the disc.

It’s all about what’s really desired. Cable TV attempted to eliminate the hassle but customers had to watch movies on the movie channel’s schedule. Before the advent of the DVR, people were disappointed with this. Will software follow the television industry? Free with commercials (ABC, CBS, NBC), subscription (HBO, Showtime, Cinemax), or pay per view? People want solutions. They don’t really want applications. They will use an application as a means to an end – but it’s all about the end. The demand for SaaS models in these markets shouldn't be fundamentally different nor need to veer significantly from other models currently in the market. There are some unique areas we can work on with our customers to provide more value, and we are evaluating these, but our approach will not be considered unorthodox. In general we are trying to broaden the way our users access our technologies and how we can provide our technology to the widest possible audience in an affordable way.