We witness the proliferation of SaaS solutions daily — from AI applications like Private ChatGPT and infrastructure services like Snowflake, to content management systems such as WordPress, and HR management systems like Workday. The spectrum extends to customer support tools like Zendesk, customer engagement platforms like Salesforce, and collaboration solutions like Zoom, Slack, and Google Workspace. SaaS has become the prevailing distribution model in today’s software landscape and is poised to define the future of software delivery.

In our last post, we talked about the emergence of the Cloud and we feel this is where the Cloud model went wrong.

As the Cloud grew, Cloud providers figured out a way to monetize open-source technologies by starting hosting them in the cloud. The challenge with this model is that open-source technology providers are left with all the hard work to build and maintain their projects but not with much benefits.

Before 2005, most of the technology was open source and enterprises were consuming open source to accomplish their business goals and the trend seems to continue to grow. Take the operating system as an example. The use and popularity of Linux have been growing day by day. Another good example is the database industry where MySQL and Postgres are rapidly growing over time as opposed to Oracle or Microsoft’s SQL Server.

The open-source trend was not surprising as proprietary technology leads to lock-ins and as these enterprises grow, their reliance on these foundational pieces continues to grow over time. This makes it really difficult and costly for these enterprises to switch to new technology, locking them into the closed-source technology and leaving them vulnerable to hefty prices or punitive charges as they scale. This drove many enterprises to come together and join hands to collectively build different open-source components.