This trend has the potential to be a win-win for vendors and customers. Vendors get a more stable and predictable source of revenue, while customers move their pesky lump sum cap-ex to the smoother op-ex payments. Now the question is are those SaaS offerings priced correctly for this to remain sustainable, or will all this break at some point (perhaps catalyzed by an economic slump).
The financial accounting standards board updated their guidance in late 2018 to require calculating the present value of expected future SaaS agreement payments and adding that to the balance sheet, so it’s still CapEx in most cases.
Does such a rule only apply to SaaS with a contract term? If it applies to all SaaS/subscriptions, I feel that's not an appropriate characterization.
There's value in having options. If a company had to wind-down some operation or segment, any CapEx in that segment could be considered lost (after applying a discount equivalent to x time using a subscription service, of course). With SaaS you can just terminate any no-term-contract/month-to-month/pay-as-you-go expenses.
That flexibility is extremely valuable and makes the company more flexible. Heck, I'd argue accounting should apply an expected future cost discount to such expenses.
Based on my layman understanding, while that changes how numbers are reflected on the books, the reality of how SaaS products improve customers' cashflow is still true.
