"It's a lot of things to change if you're going to move over to this new approach," says Brian Jacobs, an Emergence partner who previously spent a decade as a partner at St. Paul Venture Capital. "Siebel saw the writing on the wall and tried to make the change, but it was just too hard."
"Some of the larger companies will figure out how to do this, but it's not clear which ones will," says Jacobs, whose firm is working with IBM as it makes the transition. "Just as Cisco (CSCO - Get Report) was the big buyer of the 1990s, IBM and other software companies will be the big acquirers for this generation of technology."
If Jacobs and Gordon are right, they and others investing in this new breed of software companies will be among the winners as they sell pieces of their portfolio to the giants. And the losers? Start with the hundreds of thousands of employees whose jobs are tied to the old model of proprietary enterprise software.
Software as a service may turn out to be a bigger threat to tech jobs than the often vilified trend of outsourcing jobs overseas. That means pain for a lot of workers -- and no end in sight to the destructive part of Schumpeter's pet idea.