November 16, 2021

The SaaS-ification movement explained

Let’s say you’re the owner of a tire manufacturing company that’s been in business for more than 70 years. You have some great proprietary logistics systems you’ve used for decades and systems that are famous for optimizing the supply chain that contributes to manufactured goods in your vertical market. It would be beneficial to your customers and even your competitors to use your logistics systems in their own internal systems. For your business, the new revenue streams would far outweigh any competitive disadvantages that might arise from monetizing this aspect of your company’s proprietary assets.

When this type of opportunity presents itself, many enterprises look at the competitive implications and take a hard pass. At the same time, they recognize that most businesses don’t want to recreate the wheel when a well-known wheel manufacturer can provide a key piece of the knowledge pie for a nominal fee. If all goes as planned, the well-known wheel manufacturer’s own systems improve because of expanded usage, its revenue stream diversifies, and the company gains as much or more competitive knowledge as it releases.

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