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Investigating Key Beliefs Behind “SaaS Inertia” Among Legacy ISVs
Saugatuck Technology, March 2009, Pages: 6
While our ongoing market research indicates that a significant percent of legacy ISVs are either investigating or planning to move to SaaS business models over time, this report sees the trend of legacy ISVs actually implementing or embracing SaaS as relatively underwhelming thus far.
While a number of ISVs are aggressively pursuing SaaS strategies, many leading ISVs have had strategy teams in place for more than three years without tangible results thus far, or have merely formed groups to help define responses to SaaS. They have researched SaaS applications and product features, and hypothesized ranges of entry strategies (including buy versus build) required to respond to the growing customer movement from client server applications.
Some pundits view this as a state of inaction or hesitation in the part of legacy ISVs to truly move to SaaS. We see and hear increasing references to ISV “inertia,” implying that there is little or no movement by most toward SaaS. However, we also recognize it may make just plain common sense for ISVs to be careful.
Unfortunately, time is marching on, with a very challenging dichotomy facing ISVs: “He who hesitates is lost,” vs. “Look before you leap.” Most are trying to strike a reasonable balance between the two.
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