[patman81]

For existing software providers, the book recommends a transition to an recurring revenue model ala SaaS. Short term business incentives and technical limitations in an existing code base, may make this a tuff sell to existing software providers.

But the long term advantages are well argued in the book (less support costs, higher long term revenue per customer) and perhaps worth the costs of transition.

The recurring revenue model is particularly advantages for products with a strong lock-in.

[nickpsecurity]

You have a good point and it complements my comment rather than contradicting it. I should've been clear that, by SaaS, I meant the cloud-hosted-monthly type we see the most. Traditional software that's paid for monthly is still licensed, commercial software. You are totally right that this can be financially advantageous to the company: it's the reason many of us avoided certain software in the past. ;)

Now, with the entrenched doing it, it's looking to be difficult to avoid for buyers. One negative side-effect is that it might be more difficult for newcomers to start without a lot of capital. Snagging a few customers for $1,000-3,000 each can cover costs more quickly that slowly building up subscriptions of $10-50 a month. On the other hand, it might make it easier to sell.

Still not sure on that part. Wonder if anyone has published a detailed analysis of costs and benefits of that for a startup doing a native application on subscription. Probably just missed it.

The recurring model is proven, though, for established software companies to iterate more on and squeeze more profit from their offering. The shift of the profitable firms toward that market argues heavily for it.