Over the last decade I have been a staunch supporter of the SaaS/cloud model – multi-tenancy, OpEx v. CapEx, collapsing of software license/apps management/hosting into one contract, other advantages.
But writing SAP Nation and now the sequel looking at S/4HANA and other next-gen projects in the industry over the last couple of decades, I have come to realize the single biggest advantage with SaaS, is bite sized, frequent, managed- by-the-vendor upgrades.
The on-premise model delivers cumbersome enhancement packs and other periodic upgrades, and a whopper next-gen product every 15-20 years. The next-gen product takes 4-5 years to mature, and the customer base takes a decade to migrate because it does not want to let go of customizations, because the change management of the upgrade is too complex, the testing hell and the ROI of upgrades which just depends on speed/feed improvements or prettier look and feel is poor.
The concerning thing is many vendors are encouraging their customers to adopt “private clouds” with their next-gen products. Those lower hosting costs from previous models but do not really break the traditional upgrade cycle.
For their own sake, and for that of their customers they really should encourage them to bite the bullet and move to their public clouds. Of course, that means their public cloud versions have to be functionally richer, the migration is reasonably automated, and their public clouds are built to scale. Easier said than done.