Despite Ning's failure to generate enough profits using this model, there are companies like http://www.enjin.com who offer both limited free plans and reasonably priced premium plans with advanced features for those users who start with the free option and want to expand. I've been using them for a few months and have gone to an advanced plan there because it's been really good website hosting for my wow guild. Ning just didn't have the same features and seemed to charge extra for every little upgrade. At least for clan and world of warcraft guild hosting I think companies like these are doing really well.

Sounds like you are advertising enjin.com. Can you confirm you aren't?

Raj,
Hello… Always controversial saying “impossible”

How about GetSatisfaction? They are SaaS, successful, VERY customer facing and don't offer open source.

Thoughts?

best,
Andy
Linkstream – SEO Web App

Agree, I'm staking my reputation by using the word “impossible”. Although happy to be proved wrong!

GetSatisfaction is an interesting example, in most sites it sits on the side. It's not really a widget but not as complex as a social network.

Certainly worth thinking about it's categorisation. Very interesting though!

Raj,

I think you meant to say “consumer-facing” rather than “customer-facing” and as opposed to “business-facing”? In other words I think you are saying standalone SaaS, without a concrete open source offering, only works when it is sold to business. Only then might your, nevertheless interesting comment, make some sense.

There are plenty of examples where selling SaaS to business works: Kashflow (Accounting), Freshbooks (Invoicing), Constant Contact (Marketing), EmployWise (HR)……I could go on plus it's early days yet and companies like these will grow.

For consumer facing software it is tough but not impossible. Only a few winners are/will emerge but don't Facebook and LinkedIn blow your thesis?

Colin
@colinhayhurst

Colin.. No I mean “customer facing”. In my eyes any user building a community whether a brand, organisation or one man band looking to purchase Ning's service (even if they are on a free package at the moment) is a customer.

Most of the software you have mentioned i.e. Kashflow, Freshbooks etc are for internal use not for customer facing sites. A customer facing site is generally branded, like a corporate website or brochure for that matter. You have rightly pointed out that Facebook (not LinkedIn) with their Facebook Page are allowing brands to form customer facing online properties. They could be considered as a mini SaaS but they aren't stand alone. Facebook is big on APIs, internal applications and external (i.e. Facebook Connect), this is what is fueling Facebook and it's offering. Facebook's APIs are what I consider to be controlled open source. The data or software is not completely open but there is more to follow from Facebook, watch this space.

How many social networks will people really want to be on? If you look at the last 5-10 years, its usually been one site that has gained all the attention and traffic, first friendster, then myspace and now facebook.

I just checked a few Enjin-hosted sites out, and I absolutely hated the fact that they seem to have all disabled (or it's a “network feature”) the bottom scrollbar, which means that if you want to view the whole page, you have no other choice than to expand the browser window to full-screen.

I HATE that. I always resize my browsers to represent a printable page, so that on the rare occasion I find something worth printing for future reference, I know what'll be cut off before I waste my paper and ink that's ounce-for-ounce most expensive than gold.

That single caveat is enough to keep me from migrating from Ning to there.