Building Software-as-a-Service Applications for Everybody

Everybody and his brother may be talking about software as a service in the midmarket, but all the applications that are being discussed tend to be for internal company use.

As such they are priced on a per-user basis because the end customer can easily figure out how many internal customers will be using the application.

But increasingly, midmarket customers want to leverage SAAS applications to support a wide variety of external users. They really don’t know how many of these users—also known as customers—there are. So paying to use that software on a per-user basis is financially unviable.

To deal with that issue Progress Software, which makes tools for creating applications, has been working with a few hundred of the software vendors that use its tools to create applications on another revenue model. Progress is advising those software vendors to come up with models where they will take a percentage of the revenue generated from each transaction.

For example, a car leasing company might leverage a SAAS application to provide some additional service to their customers. The software vendor might get a cut of say 35 percent on those transactions, which would in turn pass on a 5 percent cutback to Progress Software.

Big vendors and SAAS may not always mix for SMBs. Read more here.  

The actual terms of the deals can vary widely, but the interesting idea here is that Progress is working with its software vendor partners to create a more cost-effective way for midmarket companies to leverage SAAS applications to support their end customers, not just their internal users.

Progress has even gone so far as to help set up software vendors to be in this business by giving them all the hardware and software they need to set up the service on the assumption that the recurring revenue stream from the application will provide a healthy return for both Progress and the software vendor.

About the only limiting factor to the model is the imagination of the software vendors and their end customer.

So if you have an idea for an application for your business but lack the wherewithal to develop it, then it might be worth checking out the Progress SAAS ecosystem to find a new model for not only building the application but also making it available to your end customer.