Comments on: Google’s New Hybrid Model http://www.thinkstrategies.com/blog/2009/01/googles-new-hybrid-model.html This blog examines the business implications of IT service trends ranging from software-as-a-service (SaaS) and cloud computing to managed services and other on-demand services. Wed, 03 Nov 2010 22:38:58 -0400 hourly 1 By: The SaaS Hybrid Question - Demystifying Software Business Models | Chaotic Flow http://www.thinkstrategies.com/blog/2009/01/googles-new-hybrid-model.html/comment-page-1#comment-237 The SaaS Hybrid Question - Demystifying Software Business Models | Chaotic Flow Tue, 03 Feb 2009 16:17:52 +0000 http://www.thinkstrategies.com/blog/?p=313#comment-237 [...] a hybrid approach where a vendor offers both SaaS and software versions of a product? Recently, Jeff Kaplan reported that Google will be offering Gmail as an installed service–flying in the face of the current conventional wisdom that SaaS players should stay true to [...] [...] a hybrid approach where a vendor offers both SaaS and software versions of a product? Recently, Jeff Kaplan reported that Google will be offering Gmail as an installed service–flying in the face of the current conventional wisdom that SaaS players should stay true to [...]

]]> By: Joel York http://www.thinkstrategies.com/blog/2009/01/googles-new-hybrid-model.html/comment-page-1#comment-222 Joel York Thu, 29 Jan 2009 03:54:44 +0000 http://www.thinkstrategies.com/blog/?p=313#comment-222 Hi Jeff, I think this issue is divisive, because people become technology zealots, instead of thinking in business and economic terms. Instead of SaaS vs. software, the question is better posed from the product view as on-demand vs. packaged vs. customized, then the controversy falls away. For example, what is PC anti-virus software? It is on-demand, even though it has a client install and a heavy services component (data/threat research). Taken this way...going from on-demand e-mail to packaged e-mail is not such a big leap, because there is no customization. A little more complex managing upgrades, and a shift of infrastructure costs back to the customer, some training, but still a commodity product. Perhaps security or comfort would make such a move plausible. The heart of the hybrid controversy is really commodity vs. customized. Then you really break the model and make it hard to manage both. Small SaaS vendors can fall for this and find that their business has fundamentally changed from software to consulting. For a small startup, I would recommend focus and a single business model. But hey, GE is in 100 different kinds of businesses. Doesn't mean you can't be profitable. You just have to be true to the customer needs and keep them aligned with the business economics. Google is more like GE, and they are fighting Microsoft. By <a href="http://www.crunchbase.com/person/joel-york" rel="nofollow">Joel York</a> at <a href="http://chaotic-flow.com" rel="nofollow">Chaotic Flow</a> Hi Jeff,

I think this issue is divisive, because people become technology zealots, instead of thinking in business and economic terms. Instead of SaaS vs. software, the question is better posed from the product view as on-demand vs. packaged vs. customized, then the controversy falls away. For example, what is PC anti-virus software? It is on-demand, even though it has a client install and a heavy services component (data/threat research).

Taken this way…going from on-demand e-mail to packaged e-mail is not such a big leap, because there is no customization. A little more complex managing upgrades, and a shift of infrastructure costs back to the customer, some training, but still a commodity product. Perhaps security or comfort would make such a move plausible.

The heart of the hybrid controversy is really commodity vs. customized. Then you really break the model and make it hard to manage both. Small SaaS vendors can fall for this and find that their business has fundamentally changed from software to consulting. For a small startup, I would recommend focus and a single business model.

But hey, GE is in 100 different kinds of businesses. Doesn’t mean you can’t be profitable. You just have to be true to the customer needs and keep them aligned with the business economics. Google is more like GE, and they are fighting Microsoft.

By Joel York
at Chaotic Flow

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