SaaS or SaaC? (The Dentist Office Software Parable)

Apparently Fred Wilson has been telling this fantastic parable for years, but just recently published it on his blog with an enhanced alternate ending:

The Dentist Office Software Story

The gist is very simple, in Fred’s own words: “This story is designed to illustrate the fact that software alone is a commodity. There is nothing stopping anyone from copying the feature set, making it better, cheaper, and faster. And they will do that.”

In particular, Fred is making a case for software companies who are taking advantage of a network effect to create a defensible competitive advantage.

When people talk about utilizing a SaaS (Software-as-a-Service) business  model, they often refer to the revenue model (subscription) and delivery model (cloud vs. on-prem). But if you’re only thinking about these two aspects, you’re not building SaaS, you’re building SaaC – Software-as-a-Commodity.

Depending on the problem your product is meant to solve, a SaaS business model can put you in a better position to pull certain defensible differentiation levers and not others. But either way, those levers are not going to pull themselves…

So what are you building? SaaS or SaaC?

 

 

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SaaS or SaaC? (The Dentist Office Software Parable)

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