Alistair Croll just wrote a post over at GigaOM talking about the increasing irrelevance of source code:

For a long time, source code was viewed as a software company’s crown jewels, protected by dongles and complex encryption schemes to prevent copying and theft. In the software-as-a-service world, however, source code becomes irrelevant…If 37 Signals gave me the Basecamp source code for free, I’d still use their service. If Freshbooks burned me a copy of their app, I’d still subscribe to them. Even if Salesforce.com handed me their software, I’d use their hosted portal.

This is *so* true. As he rightly points out, “IT administrators will tell you that the cost of running any application far exceeds its license fees” and this is a big part of why Software as a Service (SaaS) is increasingly appealing.

When you consider the true costs and complexities of ongoing maintenance, release patching, backup management and training (which companies like FreshBooks deliver happily, and with a far deeper knowledge than any IT department ever could), you begin to see the true value of SaaS, and it’s clearly not just the source code.