In the 90s software was flexing its game-winning dominance. Encoding business logic into software was clearly a more powerful and efficient way of working. The best way to win had been defined, but it had one huge requirement: on-premises compute.
Those in need of software-driven solutions were required to have large installations in their buildings. A server room would house the main server, database, and backup system - and then each and every employee’s desktop terminal was connected to it. It was a huge, but necessary, cost.
The really insidious part wasn’t even the obvious costs. It was the hidden ones. Every major upgrade was essentially a mini implementation project. Companies would often skip upgrades because they were so painful, running on dangerously outdated versions until they absolutely had to upgrade.1
As the big players like Oracle and SAP spent the 90s building massive on-premises installations that cost millions and took years to deploy, the first wave of SaaS companies were emerging.