That's a consumer metaphor. The original article is talking about B2B startups.
Consumers and businesses are very different as customers. Every consumer product/service is fundamentally an experience; even the design of Apple's packaging is carefully engineered so that you feel a certain way as you open the box. That's because consumers are buying your product (or sitting through your advertisements, or giving you their personal data) because you gratify some emotional need they have; why else would they use it?
Businesses have only two fundamental needs: save money or make money (where time=money, if you can point to a wage rate). Every B2B business model is based around those. Many failed entrepreneurs have looked at the sucky user-experience of most enterprise software, said "I can do better than that", promptly done better than that...and found out that they didn't make any money, because the person doing the purchasing didn't give a damn what the "experience" is like, the whole reason they pay their employees is so that they'll sit through tasks that they hate. If you can't frame your B2B company's value propositions as "This will save $X" or "This will make $X", you won't sell.
But these days the employees who work in HR, finance, accounts receivable spend their downtime locked into very sophisticated, mobile-friendly apps with user interfaces we could only dream of in past - even while slumped in front of the TV.
They know what good software looks like.
Yes, sometimes the suits making the decisions will just go from form and mandate SAP.
But I can assure you that much of the time, turning up to demo your product will go badly for you if it looks like a drab table-based web site from the 90s.
Conversely a single magnificent d3 animation will move you straight to the short list.
> If you can't frame your B2B company's value propositions as "This will save $X" or "This will make $X", you won't sell.
I've seen multi-million dollar software deals where the "make or break" feature is themeing it to corporate colors. I've also seen some terrible software bought because the sales team takes the manager out to a nice lunch.
I don't think I've ever seen software sold on a purely cost/savings basis.
The mistake those people make is focusing on the user and end result for the enterprise using it. The customer isn't either of these -- it's the exec.
Businesses make lots of emotional decisions... the continued, although diminished, existence of IBM is proof of that. It's just harder to divine whose emotions matter and what moves them. You also need the capital to survive that learning experience.
Businesses don't make purchases, decision makers do. A product/service might succeed if it's really good at operating as you describe but fulfilling the specific needs, often emotional, of the buyer is still very much a part of the sales process in the b2b world.
Sales is a huge industry, and a large portion of it is in squishy things, like meeting in person and sharing a meal, going golfing togeather and whatnot. Businesses don't make choices, people do.
I would say Software as Experience is already here, and has been for a long time.
SaE is when, instead of buying online with a credit card, you are courted by attractive sales people and consultants, get wined and dined, receive beautiful reports to show your boss, get a nice pen and a bottle of wine perhaps, and participate in workshops facilitated by said attractive consultants. This makes you feel like an important person in charge of an important project.
Your SaaE sounds a lot like the "services" that companies like Oracle and IBM offer to older, more established Fortunes 500 companies.
If anything, with the growth of self serve products like AWS and the growing popularity of OSS, we're still in the process of moving away from your "experience-based" service to regular SaaS.
Sorry, coffee snobbery incoming: drip coffee is pretty different from espresso. You're right that there's a "luxury" aspect, but there's also a product difference. Maybe the product difference is only 20% of the cost in total, but it's still there. I don't drink drip coffee anymore, it's gross. :[
Also-- aren't video games already an example of Software as an Experience?
"Espresso" and "drip" aren't types of coffee; they are types of coffee preparation: grind and brew. Drip gets a bad reputation because it's associated with offices, waiting rooms and cheap diners. The espresso method does extract a different profile of substances from the coffee; but it's subjective whether that is better or worse.
Espresso made with poor quality coffee (bad roast, crappy beans, roasted too long ago, incorrect grind, etc) is going to be just as gross as diner drip.
Another thing to consider is: you can make drip manually, whereby you control the drip rate, total quantity, and water temperature. Not all drip is automatic.
It's only fair that I got nitpicked in my nitpicking. :D The quality of beans is definitely a factor, but the difference in acidity from the different preparations is a big factor for me. Especially since I've developed some gastritis, having a less-acidic caffeine delivery system is important.
I watched it happen in the auto industry. You had all these small vendors selling headlights, grills and bumpers. Then someone came along who had bought out some of the little guys and offered the Big 3 a packaged front end of the car. They handled all the engineering post design and had a complete front end of the car that just clipped on.
They were non-union and in a rural area where wages were lower. The price was lower than buying everything individually and the Big 3 saved lots of money on their very high labor costs.
What's to stop people from doing a roll up, buying a bunch of litle SaaS companies and offering a package that is a complete solution? It would be discounted of course like MS Office back in the day which killed off the category leaders like Lotus 123, dBase and WordPerfect.
That is a far more plausible scenario than what this guy proposes.
It may happen, but to to answer your question "what to stop...": probably not to "stop", but make it difficult is the fact that lights, grills, and bumpers are much easier to integrate than software products.
It is much harder to integrate bumpers and lights than software products. There is a whole sales cycle in the auto industry based around new model years. The bumper factory and the grill factory have to bid for the new model. Then the automation supplier helps them re-tool their manufacturing line. The logistics companies set up routes between the new bid winners, etc.
I do find it hilarious how we always defend our illogical likes whenever they are pointed out directly.
There is a very slight product difference in any luxury experience. It adds to the experience after all. However this is meaningless in the overall comparison. You don't drink drip coffee anymore because you love the other experience. It's obviously not "gross" because you were drinking it just fine before you were exposed to espresso. Maybe at some point you'll become disillusioned in being a coffee snob and then go back to drip. It happens.
This isn't unique to you or coffee. You could say pretty much exactly the same thing about whatever brands/hobbies I'm into and I'd feel exactly like you do: that my preference was justified by more than pure emotional connection. In reality, our choices as consumers are 90% emotional, which is why advertising works so well after all.
Nah, drip coffee is gross, and I say this as someone who comes from a country where espresso is the "default" (if you want drip, you'll have to make it yourself, every coffeshop/diner/restaurant sells espresso, and for ~60¢/cup).
Sometimes one just doesn't realize how crappy the previous version was until one tries the new one.
Try a nice Ethiopian blend from a Chemex made by an experienced barista and come back to me.
Espresso is as different to filter coffee as icecream is to milk. They're different products, made with different material mix and different processes, different roasts, different grind size, different bean choice. They're two different things.
An espresso can't be better than filter coffee any more than an apple can be better than an orange.
Beware over-training your ability to discern differences. Such subtlety might give you an advantage in some fields... or it might remove your ability to enjoy basic food and drink.
That's a service provider in that case. You're effectively arguing that outsourcing is the next big thing. Could be a compelling argument to make but I don't agree, if anything I see the opposite happening. Big companies doing everything in house.
Given the economics of SaaS where frequently revenues are dominated by the very big accounts, combined with large companies getting even larger, I can definitely see a world where a company with 10,000 sales people on $2k/yr Salesforce licences might roll out an in-house solution. (though even then, I wonder if $20M/yr is a big enough cost driver for such companies to take the leap)
At some point it makes economic sense to roll out your own data center. At some point it makes economic sense to design and make your own server and networking equipment. The question would be where that breaking point is for SaaS.
"Software as Experience" is a nice way to describe Apple's business model.
Hardware spec wise, the price of a Macbook is probably double that of a regular laptop with equivalent specs (CPU, Memory, GPU, Disk, etc). But people buy those Macs for the experience; not just the specs.
A bag of coffee beans from the grocery might cost you 10c a cup. That's a Product.
A cup of coffee at a greasy spoon diner might cost you $1. That's a Service.
A latte at a fancy cafe might cost you $4. That's because you are paying for the whole Experience of the fancy cafe.
So, what comes after SAS? SAE.