Seeking a SaaS supermarket: Part 2

Software as a service has proven to be a major disruption in the packaged software market. Although not quite as disruptive as open source, it has the potential to be an even greater change agent.

Before it can achieve its true potential, as I argued earlier this week, SaaS needs a supermarket or two where you can review, compare, test and subscribe to a range of services. However, I suspect most SaaS vendors will hesitate putting their wares in an open market where pricing will be transparent because complex pricing strategies are part of the SaaS vendors' game.

Generally speaking, SaaS subscribers pay on a per-user, per-month basis with a minimum sign-up period. Three years seems to be common. Conceptually, deals are not unlike getting a cell phone.

Alas, there are numerous exceptions, such as the number of end users on the service and what options you want, which are complex and manifold. And there are various penalties if you don't pay your bill. By comparison, buying a packaged app can be straightforward at times.

To date, SaaS vendors don't compete on those exceptions and variances. In fact, they often don't even get noticed by users until after they've decided to subscribe to the service and are looking at the contract for the first time.

Finally, as Ben Pring, an analyst at Gartner told me, not everyone gets the same service-level agreement. If you don't demand one from your SaaS vendor, he says, you won't always find it in your contract.

Ultimately, what the SaaS market needs is something like Apple's iTunes AppStore with straightforward, no nonsense pricing, but without the proprietary nature of that service. This supermarket in the cloud should also let you test an app for a week or so before signing up. Once that happens, the disruptive power of SaaS will surpass that of open source and the market will expand for all vendors faster than it already has.