Although this post may look like a regular book review, it’s not. Yesterday night I read the brand new book Seven Software Business Models and I found this a very good reflection on how the software market is currently changing. The book attempts to simplify the entire industry into seven basic models. The models range from the traditional model which has dominated business software and created modern day giants like SAP and Oracle, to the outsourcing model, to the newest software-as-a-service players like Webex and Salesforce.com.


The book explaines that SaaS actually has a massive impact on the entire software industry, whether you manufacture, sell or buy software. Moreover, it explains that SaaS is not just something that just can be implemented in company that has sold software on the ‘traditional way’. The implementation requires understanding and adaption on all areas within the company: R&D, Operations, Sales, Marketing, Finance HR. The book focuses with each chapter on such a focus area. In addition, you'll also find lots of ‘campfire stories’ from people who did these jobs at leading companies.

Looking at the above image I realized that software vendors will earn less per user when they adopt a SaaS business model, which requires them to attain a certain scale and to run a more efficient operation. Logically speaking, the cost factor is the one of driving forces for the SaaS business model. End-users expect to pay less, since they only pay for what they use.

If you want to have a simple and realistic view on the software industry and the (disruptive) trends that take place in it, you can read Seven. Whatever your function in the industry, Seven contains high-level understanding and recommendations regarding marketing, sales, engineering etc. The book is easy to consume.