This quote from Microsoft from PC World article caught my attention.
For every $1 Microsoft makes on its software, partners make $8.70 in additional revenue servicing and customizing these products
I actually consider this a bug, not a feature of the traditional software model. It may be good for Microsoft and its partners for generating business. But look at it from a customer’s perspective. This means, for every $1 they spent on purchasing software, they end up spending $8.70 in customizing and servicing the software.
Among other things, SaaS makes integration easy. Our own integration, with both internal and external apps, is a great example of this. We launch a new integration almost every week. Try doing this with installed apps.
There is another advantage people don’t seem to notice with SaaS application integration. Once apps are integrated, all customers benefit from it. We integrated our CRM (among other apps) with Google Apps. This was done once and we have thousands of companies benefiting from this.
How does something like this work in the on-premise world? Well, software is integrated/duplicated in every, single, business. That probably explains the $8.70 for every $1 spent on software.