If your SaaS platform has an open API and enough users then the userbase can prop up your shortcomings with home-grown additions. If you only have a few users then you'd better do what they ask of you wrt: features. - Daniel J. Pritchett

+1 Daniel - Todd Hoff

Exactly Daniel. The only exception is that often the architecture isn't open for change, and in that case, users are stuck with changes that come down the pipe. - Jeremiah Owyang

Somewhere along the spectrum is a point where the customer outgrows the provider or vice versa. How do we identify that break point ahead of time? The provider could offer a customized version of the flagship product if the customer is willing to foot the bill. As a client if your provider leaves you behind you've got to export your data and start over. - Daniel J. Pritchett

Clients need access to a market of highly visible and competent OSS coders to deliver the customizations they need. For an SaaS provider it seems prudent to cultivate your own community of 3rd-party developers. - Daniel J. Pritchett

This got me all worked up so I blogged about it, thanks for the inspiration. - Daniel J. Pritchett

In the widget or lightweight app space it seems like many small SAAS players should embrace a try, use (pay for), and then buy (host internally) model. Would reduce the hurdle to get on board for large companies, but also provide some relief to those IP lawyers on staff... - Alan Edgett