The world of software applications and products is moving from on-premise to a Software-as-a-Service (SaaS) model. Perpetual licence earnings are shrinking, while subscription revenue including SaaS is growing increasingly fast and at a steady pace. According to a recent PWC report, subscription revenue (including SaaS) is set to grow at a 17.5% compounded annual rate, reaching 24% of total software revenue by 2016. Approximately 40% of the turnover of 10 of the top 100 software companies globally is generated by the SaaS service.
Gartner predicts that 77% of companies plan to increase their spending on SaaS in the next two years. So the big question is, how can you (as a software application or product vendor) quickly move to SaaS, test it and ride the wave of opportunity before losing your specific competitive advantage to some of the fast-progressing SaaS vendors like Workday, Oracle, Saleforce.com, SAP, Microsoft, Intuit, and Zuora.