Software procurement underwent radical change in the face of "the cloud." The paradigm of purchasing a static piece of software that met your requirements, installing it (or having it installed) locally, and then purchasing updates went out the window over the past decade. Some organizations still follow the old model, but there are fewer and fewer of them and they are dying off. CTOs who obstinately refuse the cloud out of security concerns are cowboys in a world of interstate highways, and old enterprise software vendors are carriage makers circa 1920.
Software as a Service has been the new model. Salesforce and many others have proved that Software is not a static product, it is a continually updating service. Buying software is as easy as going to the dry cleaners, dropping off your dirty laundry and picking up clean, pressed sartorial concerns. You can sign up for or subscribe to software for $50 bucks a month per user, sometimes basic products are free and additional functionality costs money (the fermium approach), others still are supported by selling information or eyeballs to advertisers.
But in the past three years or so, there's been an absolute explosion in software companies building tools on the Internet. The sheer quantity of .coms .lys .ios . ins will just blow your mind. Just read TechCrunch for a few days and your thumb will get tired from hooking up these new services to Facebook Connect or one of your other online identities.
How do you evaluate companies that are three months old? How can you prove efficacy to something that launched two weeks ago? Why should you write a check to a bunch of people staring at computer screens that jam to techno and have dogs running around their office?
Software as a Service is no longer an accurate description of the paradigm of innovation, of the relationship between customer and service provider. We need a more accurate term.
Software as a Mission.
Software can move so fast that customers are not only not buying a static product anymore, they are also not subscribing to a defined service, they are now believers in a mission and hanging on for the ride. And the ride is fast enough to be a bullet train, but can also be a roller coaster. Companies that seem promising can suddenly get acquired, or go down in flames from premature scaling. They can get a strong competitor coming out of left field.
The question is no longer "Do you like the product?" As much as: "Do you believe in the company? Do you believe in their direction? Do you believe in the team?"
And if you bet on the wrong horse, it's not as big of a deal as it used to be. You just take your credit card to the next one doing the thing you wanted doing. No big deal. The cost of implementation is usually just people hooking up their identities and choosing a password, at most uploading a spreadsheet.
By the way, this also means you won't just have one vendor for what your communities or teams need. You'll likely have several, and functionality will overlap. We're going to have to be Zen about that.
So, let me ask you this question: think about your vendors. Picture them. Do you believe in the company? Do you believe in their mission, their direction, their team? Believing is so important because great teams can ship software really quickly, and what you have next year will not be what you have this year. Believing is important because small teams of people can now produce software that millions of people use. (At one point there were almost 2 Million Twitter users for every Twitter employee, same goes for Instagram.) Designing and developing software is more of a craft than an assembly line. Old paradigms of product development created McDonalds. SaaS introduced the Olive Garden. But let's face it, we really want our software to come from organizations like the French Laundry. We want our Software to be produced with great theory and execution, by a small team of people paying infinite attention to detail to provide an excellent experience.