Saturday, 14 February 2009
Subtitle: Can old dogs learn new tricks?
The fiasco surrounding Sage Live’s public outing, immediately pulled after blogger Duane Jackson exposed some serious security flaws in the product, and brought to my attention by Phil Wainewright, begs the question: can non-SaaS vendors make the transition into the SaaS world?
The IT industry has seen many platform changes, and most vendors didn’t make it into the new world. The leading DOS-based word processor and spreadsheet, WordStar and 123 respectively, moved into Windows late and lost out to WordPerfect and Excel. The acceptance of PC networks as a platform for multi-user applications killed off the mini-computer and Unix vendors. Client/Server computing culled a few more.
So will the current market leaders make it across the chasm into the brave new world of SaaS applications? In my experience, software vendors have to take two hard decisions:
- You need to write a new product from scratch, not try to re-implement the old product on the new platform
- You need a new development team that was brought up with the new technology
Trying to implement the old product on the new platform with the existing development team would like getting the London Philharmonic to play “Anarchy in the UK” – it would be technically note perfect, but it would be horrible. You need to get people writing the product who breath SaaS, who have written web applications for years, who understand the environment, who instinctively live the visual metaphors. Otherwise you can get a product that technically is an SaaS product, whatever the definition is of that (and there are many), but doesn’t have the soul of one, doesn’t have the zeitgeist.
Most vendors don’t make the leap, they are tied to their legacy products, user base and development team. There are notable exceptions: Oracle was one of the first vendors to have a hosted applications back in the 1990’s; Microsoft has woken up and smelt the Internet coffee numerous times, even if their adoption has sometime meant changing the definition of what SaaS is about.
So, will today’s leading application vendors become the new leaders on the SaaS platform? History is against them.
Friday, 6 February 2009
Yesterday Really Simple Systems published the results of its attitudes survey on SaaS applications, and the results make interesting reading. Firstly, it’s nice to see that most people (60%) are confident in using a hosted CRM application. Readers of this blog may think there is nothing new in that, but there is a often huge disconnect between what we in the IT industry accept as a given, and what the man in the street actually believes.
What also came out of the survey though, and took me by surprise, was how uncomfortable people were with hosted Accounts, Payroll and HR applications. Only 35% were confident with the idea of Accounting/ERP solutions, and only 42% with hosted Payroll. Is this because they have more concerns about data security/availability, or because hosted CRM vendors have achieved greater visibility than have other SaaS application vendors?
It is not because accountants are more conservative than sales people, we asked the same people their opinions on both, and most of the people surveyed were CEOs, senior commercial managers and IT people, not accountants. If I had a choice between losing my accounting system for a day, or the CRM system, I’d opt for losing accounting – without CRM we’d have a lot of people twiddling their thumbs and no sales activity, and that would be more painful that no accounting activity. We can always catch up with that later if needed, while customers and prospects won’t wait. And as for confidentiality, losing the sales pipeline could do us more damage than somebody seeing our accounts, which (in the UK) are semi-public anyway.
Perhaps in another year when the likes of Kashflow and Aqilla have blazed the trail, people will be as comfortable with hosted ERP as with CRM.
Sunday, 1 February 2009
I was interested in reading the controversy this week about Oracle offering their customers the ability to run their CRM On Demand product on their own servers (see Eric Krangle’s article in Silicon Valley Insider, and also Phil Wainewright’s blog). The comments have ranged across challenging Oracle’s claim that their product is really SaaS (if the product is installed on your own box, what’s the difference between this and conventional in-house software apart from the pricing model?), insinuating that one of Oracle’s motivations is so that that the press will never notice any downtime (if one customer’s server crashes for a day only one customer is affected, whereas if a large shared platform goes down for an hour everybody screams and the press pick it up), and picking up on Europe’s stricter data protection laws (legally, if you want to store the personal details of European citizens outside of the EU you need each and every one of them’s individual permission, not that many people seem to know or care about this).
As Cloud Computing becomes the must-have technology for this and the next decade we’ll see lots of more traditional vendors claiming that their offering is Software-as-a-Service, all with their own definition of what Cloud Computing is about: pure play vendors with browser based applications and no (or minimal) local software, shared tenancy and monthly pricing (Salesforce.com, NetSuite, Kashflow, Really Simple Systems); browser based software offered on in-house or single servers (Oracle); local software and the data in-house or hosted (Microsoft); traditional software running on in-house servers but accessed through the like of Remote Desktop Connection. Only when the fog around Cloud Computing clears and customers work out what they want and at and what price will the terminology and offerings stabilise.