Considering Testing a New business Model MAaaS - Mobile Apps as a Service

Graham

We're considering testing the waters with a relatively new business model (for us), Mobile Apps as a Service.

The basic premise is this:

We will initially take on 1 or 2 App dev projects and provide a complete package from requirements gathering, analysis and design, through to development of the App and any back-end/services/interfaces/infrastructure and subsequent launch/roll-out.

Rather than present the customer with a substantial bill at the end of this process, we would instead charge the customer a pre-agreed monthly subscription which would include ongoing maintenance/support and ongoing back-end services.

I think we would target this service at the Business/Enterprise/Government market as the individual 'with a great idea for an app' would just be too risky.

Given our up-front investment in each customer, we would also have to seek legally binding minimum subscription terms. To try and reduce the risk we would probably have to vet each potential customer quite carefully and ask for some kind of pre-payment or deposit.

I'd appreciate any feedback/thoughts, particularly suggestions as to how we could market this to our target audience.

srsly78

There are loads of "digital agencies" around that do this already.

Atomico

Definitely not a new idea It could work well but it really depends. You could easily spend a fortune in development costs, hoping that you'll make it all back via the subscription model. Even if it is legally binding, you could still end up losing out if they abandon the project and / or just stop paying.

Peterdalkey

Business model seems to have a huge inbuilt risk imbalance... Not in your favour. If you guys are good enough, then you should be able to make it with a normal business model., even if it means giving it away for free initially to establish market credibility.

The Corinthian

At the end of the day there's no such thing as MAaaS; it's just SaaS with a mobile client/interface - MAaaS is just a new makeiuppy buzzword that's supposed to sound impressive and very '2.0'. And as has been pointed out, there's plenty of dev houses that already offer all that you're going to offer.

And in the end all you're offering that's different is that there's no up-front cost to the client. What you'll get as a result are the high risk ventures, on a shoe string budget, who are more likely to fail and those existing SaaS ventures that are 'dipping their toe in' and for whatever reason (normally internal politics) are unable or unwilling to devote any serious budget to it.

Any existing and profitable SaaS venture that has done its homework and feels it will make a profit from going down the mobile route won't tie itself into a deal like the one you're offering as it'll lose in the medium to long term.

So, I suspect you'll find a market alright, but not a very profitable one unless you're very lucky. I suggest you research some past business cases of companies that tried this in the Web/eCommerce space, as this would be comparable to what you're looking to do and many of the issues you'll face will have been faced there.