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Robin Islam
Apr 07, 2022
In General Discussions
Looking back at the past ten years, the annual global SaaS revenue has exceeded 100 billion US dollars, with an average annual growth of 39%. The entire enterprise software industry has annual revenue of more than $450 billion, but the average annual growth of traditional software is only about 4%. It can be seen that in the field of enterprise services, SaaS is occupying or even eating the market of enterprise software at a rapid rate. Looking at the TOP 50 SaaS companies alone, their total market value exceeds $1 trillion. Compared with foreign SaaS, the starting time of domestic SaaS is not much different, and it is less than ten years. However, there are almost no real SaaS companies born in China. What is SaaS in the true sense, there are a series of evaluation indicators and measurement standards. One of the common indicators is the proportion of subscription business revenue, which should reach more than 70% . If it is measured by indicators such as net retention rate, it is not an exaggeration to say that there is no real SaaS company in China. When it comes to the slow development of domestic SaaS, many people push the reasons to users and the market. Such as the low level of informatization of the enterprise, the management is not standardized, the habit of not paying and so on. In short, it is all a user problem; if it is further generalized, the domestic enterprise service market is immature. In fact, many SaaS companies have entered an industry misunderstanding from the beginning: the so-called SaaS is just another kind of software . "What is SaaS?" I've asked hundreds of SaaS users about that. Their answer is the same: SaaS is not the standard software online. It is not surprising that users have this understanding, but it is strange that SaaS companies have this perception. Could the software be delivered in a different way to do better than traditional enterprise software? I am afraid that SaaS companies themselves do not believe this logic. To do SaaS according to this perception, its business Phone Number List model is not established at all. To do SaaS, it must be clear that the foundation of its business model needs two necessary supports. One is a service and the other is a subscription, and they are necessary for SaaS to succeed . Neither services nor subscriptions are new concepts or models, as they have existed alone for hundreds of years. However, combining services and subscriptions is a new paradigm. In particular, combining software-based services with subscriptions via the Internet forms a new business model with strong monetization capabilities of SaaS . That is, the essence of SaaS is a service, and the best revenue model for a service is a subscription. As for software, it is only a medium of delivery of services. Therefore, looking back at the gap between domestic and foreign SaaS, it is actually a gap in cognition of the nature of SaaS business. To be more specific, it is the gap in the understanding and application of services and subscriptions . Let's start with why service is a better business than product trading. 2. The product era is over, and the world will enter the service era
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Robin Islam

Robin Islam

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