There is a certain buzz surrounding SaaS and the scope of it keeps increasing as there is definite acceptance of this model. Does this mean that all ISVs can change their traditional software to Services?

The transition from traditional software to SaaS is quite daunting. But, as the saying goes, more the challenges, more will be the opportunities. When it is a new product and you are starting out on SaaS, you can really version your software and get to market quickly; get a feel of how the market reacts and incrementally keep improving in a reactive way. Whereas, when you are talking about moving your existing software to SaaS version, it needs to be as good as the real thing, else it won’t fly.

It either has to be better or as good as the traditional software. This is where the challenge lies for the ISVs to move from on-premise to on-demand. Imagine a situation, where your enterprise product is selling for a million dollars, and you want to move to SaaS and this effectively means that it might take enormous volumes for you to achieve the million through this model. Here, SaaS may not be the right move.

On the other hand, if this million dollar product company identifies a completely different market (or the long tail as we put it!)  for the SaaS offering, then this can definitely be  a reality.

At the same time, you cannot delay the inevitable of offering your SaaS version if there is a market, lest someone lese would offer it and your entry barriers in this business model would become even more steep.