Adopting SaaS to Avoid Extinction
Posted 06-11-2009 at 09:54 PM by Albert Fong
“SAP hits on-demand SaaS button to avoid extinction”…that’s the headline in the UK’s Channel Register and points to the dire situation that traditional enterprise software companies are facing with the growing use of SaaS.
Today SAP announced it SaaS strategy frankly because it had to have one. Traditional enterprise software companies that have been stubborn to the SaaS ways are now finding that stubbornness has a negative long-term impact on customer acquisition. Customers want cost effective, and quickly implemented solutions that the traditional enterprise model just cannot support.
Lars Dalgaard, CEO of SuccessFactors pulled no punches as he discussed the hurdles SAP and other enterprise companies face as they try to embrace SaaS. He pointed to 4 key things:
1) Shareholders won’t be too patient with companies that attempt to recreate or adopt new business models because this can impact earnings for years.
2) The technology infrastructure to operate under a SaaS model is significant and time consuming.
3) The thinking and compensation for salespeople with an enterprise software company is different from that of a SaaS company; this also impacts customer service where it tends to be better with SaaS companies.
4) The existing customers and partnerships will all be affected and those implications haven’t even been considered yet.
In any case, enterprise companies adopting the SaaS model isn't as easy as it sounds, and customers will bear the brunt of those changes.
Channel Register
“SAP hit on-demand SaaS button to avoid extinction”
June 11, 2009
http://www.channelregister.co.uk/2009/06/11/sap_saas/
InformationWeek
”SuccessFactors’ CEO on SAP’s SaaS Strategy”
June 11, 2009
http://www.informationweek.com/cloud...i_wrote_a.html
Today SAP announced it SaaS strategy frankly because it had to have one. Traditional enterprise software companies that have been stubborn to the SaaS ways are now finding that stubbornness has a negative long-term impact on customer acquisition. Customers want cost effective, and quickly implemented solutions that the traditional enterprise model just cannot support.
Lars Dalgaard, CEO of SuccessFactors pulled no punches as he discussed the hurdles SAP and other enterprise companies face as they try to embrace SaaS. He pointed to 4 key things:
1) Shareholders won’t be too patient with companies that attempt to recreate or adopt new business models because this can impact earnings for years.
2) The technology infrastructure to operate under a SaaS model is significant and time consuming.
3) The thinking and compensation for salespeople with an enterprise software company is different from that of a SaaS company; this also impacts customer service where it tends to be better with SaaS companies.
4) The existing customers and partnerships will all be affected and those implications haven’t even been considered yet.
In any case, enterprise companies adopting the SaaS model isn't as easy as it sounds, and customers will bear the brunt of those changes.
Channel Register
“SAP hit on-demand SaaS button to avoid extinction”
June 11, 2009
http://www.channelregister.co.uk/2009/06/11/sap_saas/
InformationWeek
”SuccessFactors’ CEO on SAP’s SaaS Strategy”
June 11, 2009
http://www.informationweek.com/cloud...i_wrote_a.html
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