Wednesday, May 21, 2008

She Loves Me, She Loves Me Not: SaaS and SAP

From the Department of Irony and Confusion:
See if you can find a common theme. The only one I could find: She loves me, she loves me not, she loves me, she loves me not,...

I really like the "rejection" of SaaS by customers that are in the middle of SAP implementations or run large SAP implementations.

As Upton Sinclair said: "It is difficult to get a man to understand something when his salary depends on his not understanding it."

Update: Dan Druker has a great, thoughtful post on challenges faced by traditional ISVs entitled Different is Hard: SAP - (Not Too Much) Business By Design


Anonymous said...

I believe the confusion means that SAP's version of SaaS is still in development and the market is trying to make sense of it all.

Business byDesign has a different trajectory than Since most people closely associate Salesforce with SaaS, they become confused when looking at SAP's different approach, which is much broader in scope.

SAP is serious about SaaS, but it's going to take time for the market to settle down and really understand what SAP is trying to do.

In the meantime, Salesforce and other SaaS vendors can use the time to their advantage.

Michael Krigsman

Unknown said...

Michael: That's an interesting perspective. Yes, its hard to make sense of the abstract.

Appreciate your comment.

Gopi Padakandla said...

Very interesting topic.

My experience is that designing applications and business model for SaaS require different level of thinking. While large ERP applications, either Oracle or Sap, have some built-in SaaS concepts due to the initial targeted segment of large customers with complex structures and control requirements, by design the big ERPs lack the agility, flexibility and low cost business model of solutions that started with SaaS mindset (in-memory, MySQL, SOA to name a few). The current discussion is a best example of painful journey that these large vendors need to go through in their SaaS evaluation.

Thanks Anshu for sharing this interesting discussion.

Gopi Padakandla

Anonymous said...

SaaS as a core platform is very identical to all the furniture in your home from IKEA. I see more traditional (matured+aged) customers (Kraft as an example from the case in point) having an antique furniture in their living room or even bedrooms (aka Oracle/SAP in their own IT Data Center) , but maybe some contemporary styles in all other rooms. On the contrary, startups or adolescent companies in US and emerging markets may find a lot of interest/enthusiasm in SaaS as the core platform. These later ones are living the life in "solution as a service" while the former have seen the economics of "solution in a product". The interesting thing to watch would be when the later ones pick up an antique furniture if/when they move to a bigger house from an apartment.
I know this is metaphorical, but hope you see the point.