Last week I saw a conversation at Frank Scavo’s revisited around SaaS and code in escrow. This week I see Ryan Nichols’ post on Cloud Insurance
It’s good to see SaaS world step up and provide jittery buyers comfort in a number of areas. But I get the sense they are overreaching.
I mean, seriously, what tiny miniscule percentage of companies ever reached into bank vaults to get escrowed code belonging to failing on-premise vendors? I mean with the spectacular overruns around so-many ERP, CRM and other on-premise software, what “insurance” did buyers have? They just sucked it in and wrote it off.
I have written before SaaS is delivering better up-time availability than most mainstream on-premise commercial applications. Your hair would stand if you heard what security breaches are happening in on-premise data centers – yes, even so-called fortress banks. SaaS in many ways is doing fine around security as Laef Olson, CIO of RightNow wrote in his guest column.
On-premise vendors can raise FUD all they want. The best defense is to ask them for their own track record and metrics.
I would rather see SaaS vendors start to invest more heavily in functional, geographic, vertical feature growth. Especially in many areas where on-premise vendors have not delivered the last few years, even after promising to do so.
Stealth, strategic apps
We know mobile apps at the iPhone store and around other mobile platforms are growing at a torrid pace. We know SaaS vendors are busy developing new platforms and apps. We know where apps are not getting enough attention – the big boys seem much more interested in analytics – Exadata, in-memory excitement.
But there is a category of apps few analysts or bloggers talk about. They are growing rapidly, and they are changing the face of the technology market.
When I read an Accenture study about how “software is everywhere”, I did a quick back-of-napkin assessment. Over 80% of clients I have worked with in the last few years have software (and other tech) embedded in their products or in their digital services. Not just high-tech companies, mainstream industries from consumer products to healthcare to education to financial services.
And they are custom building these apps.
Which means they are getting savvier about the economics of technology. They know what it costs to code and test apps. They know how to run call centers. They know how to manage spare parts and service depots. They know the economics of offshoring.
Not that they ever forgot. Many of these companies wrote code way before most software vendors were born. They successfully migrated past Y2K. They have continued to run elaborate test streams to compensate for the quality delivered by the software industry. They pushed their service providers to adopt Six Sigma, CMM to discipline their software methods.
And their new applications are truly life-blood. They drive revenue. They provide competitive advantage.
When you are working for one of these companies you don’t know whether to laugh or scream when a tech vendor talks about their “vertical depth”. Or tries to convince you about their economics. They are comparing against their vendor peers, not the benchmarks these companies internally have. And you have to resist the temptation to point out they are delusional if they think their offerings are strategic.
The strategic apps are being custom built. And they are stealth. Except they would be blindingly obvious if the tech industry would look beyond its own boundaries.
September 17, 2009 in Industry Commentary | Permalink | Comments (6) | TrackBack (1)