Business by Design Delay – My Thoughts…

Now that it is official that SAP will be delaying the roll out of its midmarket SaaS suite, Business by Design, it really hammered home what I already knew.

SaaS is NOT easy…

I think too many people have the idea that SaaS is some magic bullet, and that all you have to do it throw together a master application, bolt a web interface on to it, and voila!  You have SaaS.

We all know it’s not that easy. Even a multi-tenant app that isn’t truly transaction-based, like Salesforce.com took years to refine. And when you bring true ERP transaction scenarios into a SaaS environment, it gets even harder to manage. There are some providers doing it well. NetSuite has managed to put together a SaaS ERP product, but just like Salesforce.com they have spent a lot of time and money doing so. I think SAP may have though a more multi-instance approach would have been easier than a multi-tenant approach, but I disagree. Allowing greater freedom and customization for users is HARDER than a simpler multi-tenant architecture that benefits the vendor in terms of less complexity and synergies on the back end.

I am not saying it was naive of SAP to think they could make an announcement and have a fully functional SaaS ERP suite up and running in under a year. After all, they did have some SaaS products available, albeit with IBM managing a lot of the back end. But again, the SaaS ERP is a very, very unwieldy beast. I am convinced that Salesforce.com has never ventured into this are for that reason alone. Designing an accounting product isn’t easy, but it’s not impossible. But achieving a scalable SaaS infrastructure that also supports the kinds of deeply customized transaction processes required in an ERP product is way too much for Salesforce.com’s older multi-tenant model to handle. I can safely say that for these reasons, we will never see a natively built Accountingforce.com product…

I have my head in SaaS in a big way right now (well, basically I have since 2001 but a lot more intensely lately). So I know the kinds of tough decisions, and all the hard work that goes into making a customizable, yet scalable and highly available SaaS stack. No part of the process is easy, and again while I’m not faulting SAP for Business by Design taking longer than expected, lets just say it wasn’t wholly unexpected…