Why is the “As-A-Service” Economy So Different?

social-1989152_640There are many “as-a-service” offerings today.  The most well known perhaps is Software-as-a-Service or SaaS.  The question I have is why is this a thing?  What is so different about “renting” stuff that we previously owned?  We have done that for a hundred years or more.

My hypothesis is that there is something else at work here.  I propose that the difference is data.  Not only data but the speed at which we can collect, analyze and react to that data.

The ultimate service is the one that can predict what I need before I need it.  The amount of data and the speed at which we can process it makes the dream of predicting my needs a near-reality.  It is this predictive analysis that makes “as-a-service” so popular and so effective.  Smart companies are taking advantage of these methods and technologies to improve customer experience and therefore their products, services and ultimately profits.

So why don’t all “as-a-service” companies enjoy phenomenal profits and growth like companies from Amazon Web Services to Zendesk?  My second hypothesis is that there is a second critical component.  That component is honesty.  Data is pure.  Data reveals the truth whether you want it to or not.  You can hide it if you have time but at the speed with which we are trying to collect, analyze and then use data to predict customer needs, we don’t have time to filter it too.  I believe that this is the competitive advantage that wildly successful “as-a-service” companies have over the others.  They are real with their customers and allow their customers to get real with them.  This is an important aspect of the agile process used in most software development.  The faster you can solicit, collect and act on feedback from customers the faster you can improve your product.

This truthfulness caused by the need to process information without filtering it creates a culture of openness within some of those companies which causes them to adopt honesty-as-a-policy across the board.  They simply don’t have time to be anything but honest.  Without the need to filter everything it lets them move with a speed and freedom that gives them an edge over traditional businesses that are still working from behind a secretive veil.

I would love to hear your feedback on this.  Please leave a comment so we can discuss.