If you are a software vendor who relay on continuous year-long software maintenance for your customers, you better read this…
OVH who claim to be Europe's number one ISP has been reducing registration of new users due to a major shift in income.
It appears that OVH business plan was centered around the notion customers cannot easily migrate their servers to a new platform once OVH released it. This meant each upgrade would take customers months to prepare, test, migrate, troubleshoot. In such case, customers needed a whole year maintenance and support.
However in the wake of free good enough automation tools, such as Puppet, Chef and others, customers were able to deploy their applications and configurations, in a matter of days or weeks, rather than months.
This led to abandoning of the full year continuous support and maintenance. Customers bought one month subscriptions, only when wanted to migrate to a new platform offered by the platform supplier.
What the market is saying, is "We are not willing to pay high prices all year-long, just because your software deployment is complex. We expect prices to be low, since the whole software market is being commoditized by SaaS offerings"
Now ISVs are forced to look into the next value chain they should evolve their offering into. Check out my "Cloud Computing and SAAS Secrets revealed – 7 Consumption Economics Rules" article to get some insight on what should be done.