Chapter Chapter 1 1 WhileWhile most most people people think thi ofn SaaSk of SaaSas stri acstly stri ac tlytec ah nteologychnology vehi cvehile, itc’s le, it’s givengiven rise torise a ftoar am forear m funoredam funedamntale cnhtanal cghean, anged, thanadt’ sth theat’s b theirth bofirth a of a new businenew business modelss model — su — subscriptionbscriptions. Whens. W whene st wartee sdta Srtealeds Sforalecesfor.cocme .icn om in 1999,199 we9 re, wealized rea lizedwe were we weren’t sellin’tn sgelli prongduc protsduc anymorts anymore. Wee w. Weree w aserekin ag sking companiecompanies to subs tosc subribesc torib ae stoervi a cseervi wece w weree w cererea ticnrega. tiBungt . herBuet ’hers thee ’s the thing:thi Todang: yT,oda in 201y, in7 ,201 this7 b, thiusisn beusiss mneodelss m iodelsn’t li ismnite’t lidm toite SaaS,d to SaaS, it’s ac ittu’sall acy tually presentpre insent every in every part ofpa yort ofur yolifeu. rT olif seee. To how see thihows i sthi happes is happening,n letin’gs ,w letal’k s walk through through a littlea littlehistory his letorysso len.sson. The Industrial Era and the The Industrial Era and the Tyranny of the MarginTyranny of the Margin For basiForc basially ctheally e thentire e n20tireth 20cethnt uceryn, twuery lived, we livedin a proin ad uproct deucoctn eocmoyn. omy. shippeds iphycal thisicanlg this undngser und an er an CompanieCompanies dessigned designed, built, ,b soluiltd,, soland,d sahippend d phy assetasset transfer transfer mod elmo. Bduseli.n Beusssi nwaesss awabosu at boinveutn intorveyn, torshelviy, snhelvig, andng , candost- cost- plus plupricis npricig. Theng. relTheatio relnsatiohipns bhipetw beeetnw seeellern s ellerand buandyer bu wasyer baswase dbas on ed on discretdisec, retoftene, often anon aymononusymo tranuss tracantiosnsactio. Thens. sTheign sbyig nthe by cas theh casregihs teregir ster summsumed mit edup :it All up S: aAllles S Fialenals .Fi Enaalrly. Eretarlyail ret pioailn eerspion lieerske S liekaer sS Reoearsbuc Roek buck and Macyand Macy’s had’s mi handi mmialn iinsmalight ins iightnto winhoto wwhoas ac wtasua acllyt uabuyillyn bguyi theirng theirprod pro-d - ucts, oruct hows, or howthey they werew usereing us theingm the. m. WhenWhe Hennry He Fornryd ’Fors firds’ts mfirovingst moving assem assblyem linbely wlinene tw intoent operinto aopertiona itionn in 1913,1913, it wa its rewaallys re juastlly an ju stex anten esioxtenn ofsio mann of ufmanactufuringactu priringnc priiplencs iplefirsts pfirust t put into plinatoce pl dauringce during the In thedu sIntridual sRtrievolutioal Revolution of then of 1 the800s. 18 The00s. assThee mbassley mbly y throduighscrete discrete repetitiv repetitive e line wlineasn w’t asjustn’t ajustbout a bmaoutximizi maximizing effingc ieeffinccyie thronc ugh tasks;t aits kwas; its awa mets aa metphora phorfor how for howa co ma paconmypa’s prony’sduc prot duccant dcanictate dic ittates its supplysupply chain chains, manus, manufactufarincgtu proringc eprossecs,e sdseistribs, diustiotribnu ctiohannn chelanns, andels ,ma andn ma-n - agemageent lmaent lyersa. yers. The proThed uproct waducst the wa so thenly goveronly governing prininncg priiplenc — ipleit — orgitan orgizedan everythiized everything ng acrossacross a perfectly a perfectly straight stra liightne. Theline. aThectua alct peopleual people involve involved in mad inki nmag, king, buying,buying, and selliandn sellig theng pro theduc prot ducweret were entirely entirely dispo dsabispolesab. Helen.ry He Fordnry ’Fords ’s customercustomers coulds could famo fuamslyo piuslyck apinyck Mo anyd elMo T dcelolor T c theyolor theywanted wan, ateds lo, nag s long as it waas it was blacks bl. ack. The resTheu ltres ofu altll of thi asll relentlethis relentless efficiess efficiency wasncy thwasat Hethantry He Fornryd ’Fors cods’st cost per upernit droppeunit dropped predc ipitoprecusipitoly, usallowily, anllowig hinmg tohim flood to flood the matherk maet wrkiteth with cheapche butap d butura bledur caablers. caMors.d elMo Tsd oeln Tlys camonlye cam in belac ink b blacecausk beecaus withe wonithe one line every three three minute mis,n utethas,t wasthat thewas o thenly only automoautomobile cbomingile coming off the off li thene every color thcolor that wouldat would dry f asdryt eno fast enough. ugh. 1010 1010
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