Of SaaS and Republicans

I arrived in San Francisco for the Office 2.0 conference where everything SaaS pervades the agenda and the conference ambience - very little paper showing agendas, slides, messages - everything in the cloud.  In the backdrop, the Republicans were busy bashing Obama at their convention.

And I read my friend George Gilbert's column at Sandhill.com. Just a couple of weeks ago he and I were debating on-premise and SaaS in between catching up about his sabbatical (which I am very envious of)

George is right - and I have lamented before - SaaS has not matured enough beyond core horizontal functionality.

But that is no reason to keep buying on-premise software. After earning billions and promising "wall to wall" coverage, the major enterprise vendors have not delivered vertical suites to so many industries from healthcare to utilities to banks. And where they have tried, their vertical pricing, exacerbated by their systems integration partner costs, make custom development look so much more attractive. The majority of on-premise customers paid a bucketload for shiny financial functionality and ran out of budget and stamina.

So when you hear George or Harry of Lawson pick on SaaS they sound like Republicans who keep saying SaaS, aka Obama, does not have "much experience" - when their own track record the last few years is actually the big issue at hand. 

For the record, I voted for Bush and also over the last decade have advised many a client to buy SAP, Oracle and Lawson.

But the joy of being an Independent is I can call a spade a spade. The on-premise vendors need to show they are truly changing, dramatically reducing TCO, offering deep vertical functionality not just attacking SaaS for "lack of experience" , er lack of "enterprise wide" coverage.

Comments

[Chris Yeh]

Hmmm, if Obama is SaaS, and McCain is on-premise, what does that make Palin? An appliance?

Sorry we didn't get a chance to meet up at the conference!

[Mike West]

I did not think that Sandhill piece made much sense, despite quoting you.
The entire question of enterprise suites is probably a canard. As we have pointed out in our most recent SaaS report ("Enterprise Ready or Not - SaaS Enters the Mainstream") there will probably be far more ad hoc integration (de facto “suites”) serving large enterprises -- and also composite offerings, e.g., Intaact-Salesforce -- until SaaS providers can mount a suite offering that is / can be stubbed off to enable a single best-of-breed function to be subscribed to. As with a hardware box that can be sold at one price point for a given level of processing power and subsequently upgraded remotely to provide more cycles, mid-to-large enterprises would require a SaaS suite consisting of multiple business functions that could be sold first into a single business need and later -- with the additional required subscription functionality turned on -- provide support for additional business needs. This is a rapidly evolving space, and keeping up with innovations in the Cloud that target business users, especially core business functionality, is hard to do unless you are continually surveying the market and interviewing Cloud providers and their customers on a regular basis, as we have been doing since 2003. Our weekly Research Alerts are free, require only registration, and address both vendor and end user concerns. I hope your readers will take a look at what we written on this.

[Shankar Saikia]

INDUSTRY APPS FROM ON-PREMISE VENDORS: THE BATTLE THAT CANNOT BE WON

The current ERP vendors (e.g. SAP, Oracle etc.) may claim to have "industry" capabilities. These on-premise vendors may claim that SAAS vendors do not have industry capabilities. The reality is exactly what Vinne Mirchandani says: the on-premise vendor offerings for industry capabilities require a lot of resources and are incomplete. The other reality is that when you develop apps for horizontal functions, it is difficult to then come up with vertical apps.... this battle will never be won!