Software Pulse

Business Strategy for Software Executives

June 10, 2009

Lincoln Murphy

SaaS Vendors: Stop Thinking Like Software Companies!

Succeeding with an on-demand model requires ISVs to adopt a completely new mindset in order to avoid the commoditization trap.

By Lincoln Murphy, Sixteen Ventures

It is called Software-as-a-Service, yet SaaS Vendors continue to focus on the first “S” (Software) and not the last “S” (Service). It is the Service that makes SaaS unique and differentiates it as a Business Architecture from Legacy (on-premises, deployed, etc.) Software. But taking full advantage of being a SaaS Vendor requires a shift in mindset; Stop thinking like a Software Company and start thinking like a Service Company!

By shifting your mindset in this way, the result will be better management of customer expectations, increased revenue, and an improved ability to defend your market position. The mindset shift is small, but is incredibly powerful and potentially game-changing for your company.


Get All Your Software Business News in One Click

Visit the news page for the latest developments impacting software business strategy today. Hand-picked by human editors, the news page compiles articles from the world’s leading business, finance, technology and online publications every day. And our Software News Summary pulls together the most important stories every Friday. Rely on to stay informed!

It’s Time for Sales 2.0

Anneke SeleyAnneke Seley of Phone Works explains why it is imperative that the software industry changes the way it sells. Read her analysis of next-generation, tech-driven sales strategies in this post to the Blog on sales best practices.

The Three Rs of Anti-Piracy Strategy

Tim BridgeTim Bridge of V.i. Laboratories says that most software vendors are in denial about the level of revenue lost every year due to piracy. Find out more about what vendors can do to decrease piracy levels in this post to the Blog on operations best practices.

Publish Your Perspective! wants your opinions. Send your thoughts on the enterprise software industry to editor, Maryann Jones Thompson ( and have your opinions published on our site.

DON'T MISS: The Irrational Side of Change Management

Most change programs fail, but the odds of success can be greatly improved by taking into account these counterintuitive insights about how employees interpret their environment and choose to act. Read more about change management best practices in this article from The McKinsey Quarterly.

News Update: M&A Moves

Software deal activity picks up; plus, Forrester says software processes are dropping, and Obama wants a national tech policy. Read these stories and more software news of the week in the latest Software News Summary.

Poll: SaaS Without the Service?

Are SaaS vendors skimping on the second “S”?
Take our Pulse Poll >>

Last week, readers speculated as to whether ISVs could pass a financial industry-type stress test.
Give us your opinion and see the results >>

More at

Should Microsoft buy
Read the most important enterprise software industry news of the week >>

Austin Ventures commits $50 million to form Brazos Software.
Monitor the latest software venture capital deals >>

Intuit pays $170 million for Pay Cycle.
Size up last week’s software M&A deals >>

Virtual Desktop Software maker Unidesk named Don Bulens CEO.
See who’s made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the site.

Parting Thought

“Challenges are what make life interesting; overcoming them is what makes life meaningful.”
— Joshua J. Marine

Courtesy of Malcolm Kusher, The Kushner Group



OpSource delivers a complete Web operations solution for software as a service and web companies. Many of the largest software companies and the most innovative web companies have selected OpSource as their Web operations partner. By doing so, they are able to focus their resources on building on-demand businesses, rather than investing in and managing the complex and costly infrastructure 24x7, staff and services necessary for successful web application delivery. Providing everything but the application itself, OpSource is the only Web operations company whose customers pay only for what they sell, not for the resources they consume.
Find out more.


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