So says Harry Debes, CEO of Lawson.
Part of me is not surprised. Over his career, Harry has been a solid operational guy at many software companies including GEAC, J.D. Edwards and now Lawson. Numbers are important to the man and he does not see SaaS as being very profitable.
Part of me is shocked. At GEAC he saw 35+ acquisitions. JDE was acquired by PeopleSoft. Lawson merged with Intentia. He was Larry Ellison before Larry became the new acquisitive Larry.
He has seen over and over again software companies which hit the wall. Dun & Bradstreet, which GEAC acquired for a song, was one of the most spectacular slides in the software market. In less than 5 years it went from dominant position to a distress sale as it missed the client/server wave in early 90s.
They hit the wall because they quit listening to their customers and the market.
SaaS is not growing because of Marc Benioff's wilful personality. It is a reflection of customers saying they are tired of the TCO of the license/integration/maintenance/upgrade treadmill. It is a reflection of customers wanting IT as opex, not capex. It is a reflection of customer's wanting to buy IT on a variable capacity basis. It is a reflection of customers seeing a secular decline in sw development, hosting and other technology charges - but not seeing that from their ERP budgets. No reason why when startups can be funded at one fifth of what they were a decade ago, companies should not expect similar efficiencies in enterprise software.
Investors may not be thrilled with the SaaS business model. But more customers are liking it, and that's who Harry - and Larry - should be listening to.
