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Beyond SaaS - by Philip Clark - Futurist fieldnotes

philipjclark.substack.com · 1,700 words · saved by 1 readers

Software innovation begets business model innovation. For the past 70 years, start-ups have taken advantage of abstractions in computer architecture to dislodge incumbents with new pricing and packaging that (1) lowers the barrier for software adoption and (2) better aligns with the value customers receive from software. There have been five epochs of B2B software business models: hardware and software bundling (1950-1970s), bespoke software services (1960s-1980s), licensed software products (1980s-2000s), SaaS (2000s-present), and usage-based pricing (2010s-present). LLMs should create a sixth. LLM-native companies are in the early days of business model innovation. Model providers such as OpenAI and Anthropic still rely on subscription and usage-based pricing models akin to traditional SaaS vendors and cloud providers for now. But business models will change as AI capabilities improve. LLM-native application start-ups are leading the way. Their efforts to find business-model-product-

Software innovation begets business model innovation. For the past 70 years, start-ups have taken advantage of abstractions in computer architecture to dislodge incumbents with new pricing and packaging that (1) lowers the barrier for software adoption and (2) better aligns with the value customers receive from software. There have been five epochs of B2B software business models: hardware and software bundling (1950-1970s), bespoke software services (1960s-1980s), licensed software products (1980s-2000s), SaaS (2000s-present), and usage-based pricing (2010s-present). LLMs should create a…

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