It's a nice idea, but has a fatal flaw: Customers don't want to, and are not able to, operate a SAAS operation in house. That's why they go SAAS in the first p

It's a nice idea, but has a fatal flaw: Customers don't want to, and are not able to, operate a SAAS operation in house. That's why they go SAAS in the first place. Here's a variation, though: The vendor should open source their core software and escrow some extensions (if they need an IP moat to stay in business), and license their technology to a reputatable small consultancies, something like Revolution Analytics (R language), Analytics Pros (Google Analytics) for use in resale/redploy