The rise of software as a service is obvious. For a long time, the idea of software being hosted by providers instead of purchased by customers and rented, instead of owned, was not something that anyone thought about.
The usage-based pricing movement is already disrupting the place of software as a service in the epicenter of startup and Big Tech life. More startups are offering their services via a developer hook, and charging for customer usage over a set number of seats.
Tech models never rule the roost forever, and the competition for the software business model of the future underscores the point. What is the next thesis that we will look at? We have thoughts on what will become the defacto startup model and strategy.
The concept was explored by the four people who took the time to write up their expectations. Our notes cover a lot more than just business models, but as the model of every startup is the most important aspect of its success, the money element comes into play in all of our perspectives.
Alex: When open source will become a startup model.
While I have a more business focus than an early-stage bent, I still get to chat with many founders who are building the early blocks of their businesses on a regular basis.
I was struck by how frequently I ran into people who were building businesses with an open source component.
We all know that open source is a business concept. Red Hat was founded in the tech equivalent of the neolithic era and has done well throughout its life. I think I know why startup companies are taking up more of the industry than before. I have a hunch.
It is about control.
Software was once something you bought. The model of early PC manufacturers offering full software suites with their hardware died off as the world realized that open platforms were the way forward. Software was a thing that consumers and corporations could buy.
The key word is buy. People bought closed source code from companies and then ran it on their own systems. The hosted software took off after the cloud came along. The code was mostly closed source. You could rent access to the service for your team, even though you didn't get a copy of the code.
Software as a service took off, and investors cheered it on. We are almost to the modern moment, but not quite. As Anna notes below, on-demand pricing began to replace the sales model of the software world, just as the sales model of the software world used to be.
