Just 30 miles west of Washington DC, in the town of Ashburn, Virginia, flows nearly 50% of the world’s internet traffic. Ashburn also happens to be where I live and is just a dozen miles from Logi’s headquarters. So, to say that “The Cloud” is something I think about often would be an understatement.
The cloud has come to mean many things to many people, and often times it is conflated with software as a service (SaaS), because the cloud is the primary distribution mechanism. The confusion is understandable, as the cloud has made the “as a service economy” a burgeoning part of the tech sector’s growth.
While moving software distribution from floppy discs and CDs (AOL is just south of Ashburn too) to the cloud may seem a simple distribution change, it really has harkened in an entirely new era for software companies. In fact, the responsibilities of software companies could not be more different today than they were just a decade or two ago.
In the era of physical distribution, software companies had a very limited relationship (if any) with the end user. Further, the only way to ensure upgrades was to hope that the next product was desirable enough to warrant a purchase.
Today, the world has totally changed.
- Software companies own distribution. Brick and mortar has given way to digital channels that demand a mix of SEO and app store optimization for discovery, positive reviews to earn downloads and regular improvements to earn ongoing loyalty.
- Updates are pretty much free. Software vendors must constantly improve their products for free. This is now expected and iterative or even drastic updates are increasingly difficult to monetize.
- Lack of update monetization has led to new business models. Few companies are selling $1,000+ bits of software anymore. Instead monthly subscriptions, freemium models and even ad-supported models are all ways software companies drive revenue. Getting users in via free trials and locking them in to subscriptions which offer upsell opportunities is the new way to monetize.
These are just a few examples of how things that have changed for software vendors in the past decade, and things are continuing to evolve. We talk to companies every day who are looking for new ways to deliver and monetize their software, which is why we wanted to make this a focus at our upcoming user’s conference.
In my #Logi16 session Bringing Genius Apps to Market, I’ll dive into go-to-market details to help companies who are thinking about transitioning to a SaaS model, struggling with their conversion to a SaaS model or those looking to become more successful with their SaaS model become more successful.
We hope you’ll walk away with a better understanding of how to package, promote and price your offering for success in the “As a Service” world. Hope to see you there.
#Logi16 is taking place October 12-13, 2016 at the Ronald Reagan Building and International Trade Center in Washington, DC.