I absolutely love this new article by Geoffrey Moore on the power of software as a service (SaaS) business model. In SaaS’s Real Triumph he writes:
“by far the greatest contribution of SaaS is to free the enterprise from the tyranny of the product release model.“
He cites the operational burden, enterprise-wide distraction, and associated cost to roll out an enterprise IT application and then the subsequent hesitation to repeat that when a new release of that software becomes available as that deployment model is not sustainable nor affordable. There are gobs of dollars spent on buying and then deploying an application that the enterprise knows will be outdated in just a few years’ time. Moore points out the painful truth, stating:
“you have paid maintenance of 18 to 20% per year for anywhere from five to ten years for the express purpose of not availing yourself of the innovation created during that time period.”
This freedom from tyranny of the product release and network rebuild model is exactly what the cloud voice platform delivers for VoIP and IMS. In addition to the business model transformation (success-based pay as you grow vs upfront CAPEX), cloud voice platforms mean the latest and greatest feature set is available at all times to the provider. The building, running, scaling, innovating of the VoIP network is outsourced to the cloud.
Not only does it deliver innovation on a recurring and non-disruptive basis, but also unleashes vast potential for service providers. With capital expenditures and operational/IT resources now free from the tyranny of building and running a VoIP network, service providers can focus and plow ahead on high-ROI new service initiatives that will set them apart and drive revenue in the all-IP age.
So to review, the old world way is CAPEX followed by resource drain and OPEX to deploy followed by an annual maintenance cost to stick with old software and eschew the innovation delivered by the software company. SaaS frees enterprises from this model for IT applications. Cloud voice platforms do the same for VoIP for service providers.
Want to learn more? Read our whitepaper Service Provider VoIP – Next Gen is Cloud.