MercuryNews.com | 02/22/2006 | Software services companies get hotter among VCs

"In the past year, venture capitalists had flings with one hot investment idea after another. Now, another promising opportunity could be getting a lot more love in coming months -- software as a service, where customers use software over the Internet.Software-as-a-service companies have already been attracting attention. Venture funds in the United States poured $460 million into them last year.Traditional software companies, where customers buy expensive programs they install and run in-house, received just as big a welcome, but this may end.``If a company came by and said my business is closing multimillion-dollar (traditional) software deals, I don't think I would take that meeting,'' said Keith Benjamin, managing director at Levensohn Venture Partners.This new attitude has evolved slowly but is gaining momentum in the past six months. It is offering an abrupt statement to the software industry as a whole: The shift to a new model where revenue comes more like monthly rent payments, rather than big upfront checks, is taking hold."