In one of my earlier posts, I have writtent that Professional Services revenue will outdo license revenues by and large. How true it is for a SaaS vendor in comparison to a traditional on-premise software vendor?

A major portion of the SaaS revenue is for systems that are already up and running, and where does pro services come into picture. It definitely does but not in the traditional sense. We will come to that a bit later in the post. Moreover, if you look at the revenue models of SaaS itself, it is do with more volumes and less margins, but a good model due to the fact that it is predictable revenue over a period of time where your margins go up.

Pro Services revenues in the form of Software Installation, Database Tuning, OS Optimization, Information Security and the likes have vanished in the SaaS model as these come along with the vendor’s offering. Revenues in the form of data conversion, project management, integration, training and customization still are high ticket pro services activities that would make your SaaS implementation successful. Primarily it is moving from technical focus to business management focus and this requires different level of capabilities.

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