ASP – MSP – SaaS – Cloud Reloaded

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In the 80’s people discussed replacing Mainframes with PCs. It didn’t happen – now 30 years later the mainframe business is as vital as it was in the 80’s.

In the 2000 people talked about replacing on premise applications with SaaS. 10 years later it didn’t happen. While the ASP/MSP/SaaS/Cloud industry has nicely grown to a Billion $ industry, traditional IT is a Trillion $ industry (1,000x the size).

By looking at the evolution pattern you may recognize the future trends:

The Mainframe market reached maturity. Pretty much every business that had a potential for mainframes is using mainframes. No more growth but still a very vital market.
The market maxed out at about 500,000 businesses (globally).
However an enormous potential opened up by reaching companies who really wasn’t a potential for mainframes, but PCs. Going from 500,000 to 5 Million.

On premise applications is reaching maturity. Every business that has a potential for business software is using business software. No more growth but a very vital market.
This market maxed out at about 5 Million businesses (with tens of millions of users in aggregate).
However yet another gigantic potential opens up by reaching companies who are simply to small to maintain an internal IT infrastructure like the small family shop owners.

We have approximately 55 Million registered businesses world wide.
Going from 5 Million to 55 Million is where online applications, delivered from the cloud has its biggest potential. 🙂

What can we learn from the past:
People who tried selling to IT by replacing mainframes with PCs failed.
Those who opened up new markets became eventually market leader.

People who try selling to IT by replacing onpremise with onDemand will fail again.
Those who sell to even smaller businesses will eventually lead that market.

I guess it doesn’t matter what we call it – as long as we provide a good solution to the most potential audience.

Axel Schultze
CEO of Society3. Our S3 Buzz technology is empowering business teams to create buzz campaigns and increase mentions and reach. S3 Buzz provides specific solutions for event buzz, products and brand buzz, partner buzz and talent acquisition buzz campaigns. We helped creating campaigns with up to 100 Million in reach. Silicon Valley entrepreneur, published author, frequent speaker, and winner of the 2008 SF Entrepreneur award. Former CEO of BlueRoads, Infinigate, Computer2000. XeeMe.com/AxelS

1 COMMENT

  1. I mean the cloud and SAAS could take off but i don’t see it happening or replacing IT.

    Just the facet of losing control of your information to some third part and privacy issues is enough to never let it grow, to middle and large scale companies.

    Maybe some companies will utilize it to cut costs for non sensetive materials, but never their whole infrastructure.

    The only place is see cloud and SAAS growing is companies with their own main frames offering cloud services to consumers to improve user experience.

    Such as webmail, ect, and even with that i highly doubt people would pay money for any cloud service when they can have physical software on their PC’s.

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