SaaS Myths

I thought it would be interesting to get some opinions from outside the supply/spend management industry regarding the on-demand model. Although a couple months old, I found this article on CRM Buyer which describes some of the myths and skepticism surrounding the industry and found it interesting that an $8.5 billion dollar company is actually delivering in a SaaS framework – as it is easy to forget sometimes just how mainstream it really is. {Editors note, CRM Buyer recently removed the article, unfortunately}.

Another interesting myth that is discussed is “Myth No. 7: It will be easy for the established software vendors to offer SaaS and dominate this market.” This describes the challenges faced by Oracle and SAP to compete effectively in the on-demand market. Both are extremely successful companies that have strategic plans; however, the comment about Siebel buckling to the pressure of Salesforce.com, is very interesting. After all, it is not easy to turn a battleship or aircraft carrier.

Although it was not based on a technical challenge, it actually reminded me of the good ole days when FreeMarkets charged millions for FullSource engagements and fought hard to resist the rising tide of self service software which cannibalized all that high margin professional service revenue. Their revenue was sharply decreasing as the market changed we all know what ultimately happened. If nothing else, this industry is non-stop entertainment and it is fascinating to watch the lightning speed of change.

2 Responses to SaaS Myths

  1. I wonder if this BusinessWeek article might be the same article
    http://www.businessweek.com/print/technology/content/apr2006/tc20060417_996365.htm

  2. HA! Thanks Mike. That is exactly the article, I looked for it for 20 minutes this morning and gave up. Nice work.

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