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James Blake

We've seen a rather large vendor (with a six letter multi-coloured name) recently enter one of the markets we operate in through an acquisition.

One of the first things that happened was that they reduced their subscription down to a fraction of what it used to be.

This works to commoditise the market - exactly what those who see SaaS as a utility want.

The issue is, unlike electricity or other utilities, there are large variations in the quality of get between different SaaS vendors.

Imagine your joy at negotiating a killer deal to get water for a fifth of what you used to pay for it, but turning the tap on and getting sludge.

The driving down of prices may allow vendors with deep pockets to buy marketshare, but it stifles innovation from the companies who are trying to use the cloud computing model to solve problems using this new paradigm and move technology forward - not simply relocate our existing problems into the cloud.

The good news is that with SaaS, customers are typically not locked into the same technology refresh cycles they were under on-premises solutions and they will soon discover that you get what you pay for with SaaS, and they will be free to move to another suppler.


Sounds like a bitter pill to swallow but yes, it is something for companies to offer value and be valued in return through sensible costs because to do otherwise, is to shortchange yourself and eventually when things get too tight, shortchange the customers who've come to rely on you.


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