SaaS Hype and a (Slight) Reality Check

I have been doing my usual Monday-morning combings of the blogosphere and I found this interesting article by Bill Snyder on SAP and its being so late to the game in SaaS and PaaS. (I am hesitant to use the world paltform as it is, now they have to go creat this platform-as-a-service acronym to annoy me even further? Ugh…)

I don’t think Bill has it 100% correct either way. Yes, SAP is late to the game and has been slow out of the gate with its SaaS and other innovations of late. But it is still a much larger, and in my mind will remain to be, applications provider than Salesforce.com or Google or Microsoft or Oracle, etc.

Why? Well, timing is one part. SAP has simply been around, and cornered a global applications market that was short on packaged apps in the 1990s. But we see in SAP’s success a mirror into the success of SaaS vendors today. SAP was trying to make it easier for people to get ERP running in their organizations — the alternative was highly proprietary and custom coded systems. Ewww.

But just as there are still custom built ERP and CRM solutions in many large and small companies, SaaS is not going to replace every packaged client server or non-hosted application on the planet. probably ever.

SAP knows that people will opt for on site software for a good many years, and has weighed the pros and cons of rolling out a not ready for prime time SaaS portfolio. They are not idiots.

We at Sugar still believe in – dare we say it – customer choice, and that is why we have a lot of users of each of our deployment options. But we do see SaaS as a growing strategy.

Now, I said SAP are not idiots, but I do think they have a lot to gain by getting more proactive in the game (especially with a SaaS ERP suite) rather than let Sugar, Intaact, Authoria and Salesforce.com and other companies eat their lunch in both the midmarket and the enterprise.

SAP strategy session

A candid shot from a recent SAP strategy session on SaaS.

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