2017-12-03. Trouble ahead for SaaS

From a user demand angle, the SaaS business model is built on a simplification advantage: A SaaS tool gives you the functionality you need to do your job, ready to use and hassle-free. In return, they charge a monthly (or yearly) fee. The per person logic is a favorite, but other tiered pricing models exist that scale with usage or features.

From a supply angle, it seems like SaaS proliferated because of how easy and inexpensive it has become to create them:

I believe that these forces will also ultimately be the demise of SaaS as the king of B2B pricing models for software.

SaaS may fight back and replicate pricing models that are tuned to infrastructure usage. Like charging per actual days used or just for active users instead of charging for everyday and every user. They can and will keep investing in differentiating functionality that is hard to replicate under a distributed model, especially for niches. Machine learning models will also bring advantages to the players controlling most of the data when these times arrive.

Complex models may survive in SaaS, but the future clearly will bring a lot of hardship to this model.

IaaS + Containers + Automation + Open Source > SaaS.