Few industries in history have grown as rapidly as the SaaS (software as a service) space. Launched in 1999 with the founding of Salesforce.com (or Concur, though it didn’t start as a SaaS firm), it’s worth over $170 billion today, and has grown 500% in just the past seven years.
For Millennials and members of Gen Z, SaaS is just what software is. Most have little experience, at least in their adult professional working lives, using packaged software or client-server applications (from which SaaS evolved).
Throughout the 1980s and 90s, most B2B software vendors relied primarily on big-ticket software sales, with a smaller revenue stream from services and annual maintenance contracts. Dependence on these large deals, often in the hundreds of thousand or even millions of dollars, caused revenue streams to be “lumpy” for software vendors. Closing or losing a single large deal could often make or break a quarter.