Don Marti

Mon 06 Mar 2006 06:02:16 PM PST

MLP: hosted software pricing

(original posting date: 17 Feb 2006. Expanded.)

Nicholas Carr talked with Greg Gianforte, CEO of CRM provider RightNow. "He said that five years ago 50% of customers were using the SaaS version but that today the percentage using SaaS is up to 87% - and still rising."

(What Carr and Gianforte are calling SaaS here is ASP. In my humble opinion all ASP is SaaS but not all SaaS is ASP. Murugan Pal points out that customer-hosted software subscriptions can also be SaaS.)

So why the trend away from customer-hosted?

Matt Asay writes, "RightNow charges the same price for hosted or on-premise subscriptions."

Paul Graham was right.

Meanwhile, Jim Kunstler writes, "We'll also discover that telecommuting over the Internet is not so "cool" in brownout nation". Having telecommuted through the Great California Power Crisis, I can confidently say that a good home office laptop and a beefed-up UPS will get you and all your hardware except the laser printer through a flaky power situation fine. (bonus link: apcupsd. Use it. Love it.)

But are companies using ASP and subscription SaaS more vulnerable to power outages and other systems disruption than the companies using customer-hosted software? I guess it comes down to whether the commuting infrastructure that gets people to the office is more or less reliable than the net connections to employees' homes, hotels, and favorite coffeehouses.

"The Internet is down but we still have the LAN and everyone can still commute to work."

"The office (or route to work) is toast, but we can still work over the Internet."