Software is sold as SaaS for the same reason games are multiplayer. Both are driven by the need to stop your app from being pirated. The recurring revenue piece

Software is sold as SaaS for the same reason games are multiplayer. Both are driven by the need to stop your app from being pirated. The recurring revenue piece is just a side effect of adopting the only effective anti-piracy mechanism ever developed. If all the code runs on the user's laptop, it doesn't matter whether it's a game or a productivity app and it doesn't matter whether it's cheap or expensive, it will be cracked and it will be pirated. If a critical piece of the product runs on a server that you the business founder own, whether that's multiplayer lobbying or MMO sharding or some key part of your productivity app (like data storage or whatever), piracy ceases to be a crippling problem for your business and becomes a non-issue. You also have the opportunity to get a recurring revenue stream rather than a single payment, which is generally preferable for the business (and better aligned with the fact that you do now have monthly per-user costs because you're hosting part of the app on your servers). As a data point to back up the importance of piracy in the equation, look at the distribution of start dates for successful software companies. There were lots of successful software companies started in the 80's and early 90's, but almost no successful software companies were started between 1995 (when the first web browsers made piracy easy for the first time because you didn't have to physically know someone with a physical copy of the cracked software, you could download the crack from anyone anywhere) and 2006 (when Salesforce.com showed the world what the games industry had already figured out, which is that hosting part of your app on your own server is a great way to stop piracy and get recurring revenues). Once Salesforce.com showed the industry that "SaaS" works, all of a sudden people could start launching tons of profitable software companies again. Can you find a successful software company started during those dark ages of 1995-2006, of course you can, these are trends not absolutes. Was it far harder to be a software company in those dark days? Absolutely. That's why we have SaaS today and that's why SaaS is here to stay.