SAP, On-Demand for the Enterprise, and Private Clouds…

The news that SAP is dedicating a lot of its development resources to On-Demand comes as some surprise for a number of reasons. For one, from what I’ve seen, SAP has yet to really make any major splash in terms of products delivered via a SaaS or cloud model, and has yet to really gain major momentum. The Business-by-Design is an attractive concept, but seems to be just that right now.

But as Phil Wainewright notes – this move by SAP into SaaS is at all levels – a major undertaking. SAP is smart to position this as an evolution strategy for businesses; they are not ripping and replacing but rather seeing new features deployed instantly into their framework with little work to be done. This jibes with the notion that no one sees large scale IT deployments as a good thing right now.

Truly enterprise software is an odd nut to crack. And while I like that SAP has worked to give its customers options (and ones that promise fast deployments at that) – I think the move to a SAP-hosted “On-Demand” model may not be totally necessary.

I have seen a lot of large companies that the concept of cloud computing or on-demand and essentially create a central data center that pushes functionality to users in various divisions with the same kind of ease that SAP describes with its new On-Demand strategy. Why does SAP have to host these web-architected new offerings if they are designed to complement existing deployments?

The concept of private clouds are becoming more popular. The notion that a vendor has to be housing a multi-tenant version of an application in a far away data center in order for it to be a solid SaaS play is finally being debunked. Why can’t SAP simply offer up this new version in such a way that there is not only the choice between the older R3 and MySAP ERP suites, but also this new “On-Demand” version in both a hosted and private cloud (hosted by the consumer or a third party hosting provider) manner?

I am not sure the answer here. Politics and economics probably come in to play here, but I think we have proven that the next generation cloud and web-based applications need not be hosted by anyone in particular to insure great uptime and performance.