I Thought SaaS Wasn't Dead. A Friend Made Me Rethink It.

Topic: Product

I’ve been arguing that SaaS isn’t dead.

For a while now, a friend and I have gone back and forth on the future of software. Kesava is a mentor and well-wisher I’ve known for nearly twenty years, and one of the few people who will tell me I’m wrong and make it feel like a favour.

My position was simple. Businesses will always need software, platforms and subscriptions. That doesn’t go away.

We finally met and he said this:

“Software as a Subscription may be dying. But Service as a Subscription is only getting started.”

I haven’t stopped thinking about it since.

Same acronym, opposite deal

The two phrases shorten the same way, which hides how different they are.

Software as a Subscription. You rent a tool. You configure it, staff it, run it, and carry the responsibility for the result. The vendor’s job ends at giving you access.

Service as a Subscription. You pay for the result. The vendor runs the work and carries the responsibility for the outcome. You judge them on what got done, not on what you could have done with the tool.

A help desk example

Take a company that sells help desk ticketing software.

The usual deal: customers subscribe, set up workflows, buy seats, hire a support team, and work through the tickets. The vendor supplies the tool. The customer delivers the outcome, which is their own customers getting help.

Now flip it. The vendor stops selling ticketing software and runs the support operation instead. AI resolves the routine requests. A human team handles L1, L2 and escalations. The vendor studies the recurring issues, finds the root causes, and helps prevent the next incident.

The customer isn’t buying software any more. They’re buying support that works, and the headcount, tooling and process behind it belong to someone else.

Look at what moved. In the first deal, if tickets pile up, that’s the customer’s problem. In the second, it’s the vendor’s.

The question underneath

If AI makes software easier to build and run, will customers keep paying mainly for access to tools? Or will they start expecting vendors to take responsibility for the work those tools make possible?

I don’t know yet. I still don’t think SaaS is dead. Plenty of platforms will stay essential.

But his point stuck with me for another reason. It suggests the advantage may be moving from who has the best capabilities to who will stand behind the outcome. That isn’t a pricing tweak. It changes what you build, how you structure the company, who you hire, and how you relate to your customers.

What this has to do with reinvention

This sits at the centre of Liquid Ocean Compass™ thinking. Reinventing a business isn’t always about building a better product. Sometimes it’s about asking what business you’re really in.

A ticketing company may believe it’s in software. Its customers may believe they’re paying to have fewer support problems. Those are different businesses, and reinvention happens in the gap between them.

Two questions worth taking to your own team:

• What outcome are our customers really after, and who carries the work between our product and that outcome? Us, or them?
• If a competitor offered to do that work for them, how would our customers react?

I went into that conversation to defend my position. I came out questioning my assumptions. That’s what people like Kesava are for. They don’t always agree with you, and they help you see what you were missing.

So here’s the question for you, especially if you build or lead software companies:

Over the next five years, will customers pay primarily for access to your software, or will they expect you to own the outcome?

I’d like to hear where you land. Reply or leave a comment.