“The software sales model in the cloud is incredibly … – The Digital Factory

  “So what about the profitability of SaaS and PaaS? What I will tell you will surprise you. This software sales model in the cloud is similar to the traditional model of selling licenses and associated support services. It is incredibly profitable. “

 

  “What I will tell you will surprise you”

 

  “The infrastructure segment as a Service – IaaS – is very different from SaaS and PaaS segments Here, the margins are not nearly as high but we make money even when margins of Look… Amazon Web Service. If you realize gains necessary scales, you can be profitable in this business. ”

 

  “In the SaaS and PaaS [...] we make money anyway”

 

  “In the SaaS and PaaS segments, we find ourselves in a situation similar to the licensing model. When we sell for $ 1 million licenses, we have achieved an income of 3 million over a period of 10 years. And when we sell 1 million of SaaS and PaaS services, we collect $ 10 million in revenue in 10 years. ”

 

  “Over 10 years, the model of the cloud is much better in terms of income”

 

 “Over a long period of 10 years, the model of cloud is much better in terms of income. And if we take into account the costs, both models provide substantially the same margins.”

 Larry Ellison, when presenting investors with Oracle trasncrite 2014/2015 results on the blog Seeking Alpha finance