Part 1 of this blog series depicted the three evolutionary phases (or waves) of software as a service (SaaS) and the adoption of cloud computing. The post ended with some glimpses into the future and likely implications for SaaS users.
Part 2 then explored the apparent opportunities and accompanying challenges (and painstaking soul-searching exercises) that SaaS aspirants face in their endeavors. Some concrete examples of vendors and their new strategies and solutions were presented, most notably SAP Business ByDesign.
Part 3 of this blog series analyzes recent SaaS initiatives by mainstream mega-vendors with some concrete examples.
Mega-vendors’ Hybrid Approach
Indeed, what about the vendors with immensely broad application suites and vast install bases of large on-premise software customers? Delivering applications in a hybrid on-premise/on-demand model (also referred to as software plus services), where SaaS applications are fringe add-ons to the on-premise foundation suite, is the direction many of the mega-vendors seem to be moving in. Technology infrastructure providers like Microsoft or Oracle have been good examples in this regard.
Namely, Oracle has long provided its broad Platform for SaaS and thus let partnering independent software vendors (ISVs) fly the “SaaS trial balloon” on behalf of the giant (before it takes the SaaS plunge in earnest). A panoply of now renowned SaaS vendors (Callidus Software, OpSource, Xactly Corporation, Intacct Coporation, etc.) are users of Oracle’s SaaS Platform. (See the full list of Oracle SaaS ISV clients and their testimonies.)
Most recently, on June 30, 2009 Oracle launched its “SaaS for ISVs” monthly licensing model to offer more flexibility for ISVs that are delivering SaaS and Cloud Services on Oracle’s Platform for SaaS. This new commercial licensing model enables ISVs to purchase license and support for the components of the platform on a monthly basis. Instead of making an upfront investment for perpetual licenses, the new monthly licensing model allows SaaS ISVs to scale their investment in Oracle technology with their company growth and end-user demand.
The Oracle Platform for SaaS components are the following: Oracle Database, Oracle Fusion Middleware (OFM), Oracle Enterprise Manager, and Oracle VM (Virtual Machine). The SaaS platform leverages Oracle Grid Computing technologies to enable ISV partners to deliver SaaS and cloud-based services to multiple enterprise customers, while delivering the requirements of scalability, high performance, high availability, integration, security, and customization.
ISVs, hosting service providers, and system integrators also receive business and technology support via a designated Oracle SaaS Program for Partners. For more details on Oracle’s SaaS enabling offering, see the Oracle SaaS for ISVs questions and answers (Q&A) page and the Oracle SaaS Blog. In addition, Kevin O’Brien, Senior Director of ISV and SaaS Strategy for Oracle’s Worldwide Alliances and Channels organization has a blog with regular updates on partner activities.
Mega-vendors’ Own SaaS Applications Strategy
Microsoft’s burgeoning Software + Services and Azure Services Platform offerings are pretty much along similar lines (perhaps a bit later to market than Oracle). But when it comes to offering new SaaS products to existing large on-premise customers, traditional enterprise applications powerhouses have the following options:
Some good examples along these lines would be the Epicor Tax Connect product powered by Avalara that is offered to Epicor’s enteprise resource planning (ERP) customers as a subscription per order/invoice, and Epicor Campaign Connect as a subscription per e-mail/survey. Oracle CRM On Demand and Microsoft Dynamics CRM Online are currently the notable enterprise applications offering by Oracle and Microsoft respectively. In addition to recently announcing Oracle Sourcing On Demand, in May 2009 the Wall Street Journal (WSJ) reported that Oracle was working on several other upcoming on-demand applications that would help businesses run sales campaigns, keep track of employees and job applicants, and manage marketing.
SAP’s On-demand Strategy for Large Enterprises
On a quite separate track from SAP Business ByDesign, an integrated on-demand solution dedicated to the mid-market that was described in Part 2, SAP recently announced the first details of its on-demand strategy for large enterprises. SAP was surprisingly and conspicuously mum about its on-demand offerings and intentions during the recent SAPPHIRE 2009 user conference.
Following suit in being dedicated to its installed on-premise customer base, on-demand software for large enterprises from SAP will consist of function-specific software applications. Available by subscription, these SaaS add-ons will plug directly into a customer’s on-site SAP Business Suite software.
The strategy was unveiled by John Wookey, executive vice president of Large Enterprise On-Demand at SAP, during his keynote presentation entitled “Next Generation OnDemand” at the Software & Information Industry Association (SIIA) On-Demand Europe 2009 conference. As a memory refresher, I should say here that Wookey was employed by SAP in late 2008, after he parted ways with Oracle and the upcoming Oracle Fusion Applications.
The keynote has already been reported on and analyzed by other analysts and reporters ad nauseum and I will try not to repeat the obvious. In a nutshell, all of SAP’s large enterprise on-demand applications will be powered by the Java-based on-demand platform SAP gained through the Frictionless Commerce acquisition in 2006.
For large enterprises, SAP currently offers the SAP Customer Relationship Management (SAP CRM) on-demand solution, the SAP E-sourcing on-demand strategic sourcing solution, and carbon cap and trade software through the recent Clear Standards acquisition. Additionally, on-demand expense management, contract lifecycle management, and human capital management (HCM, in alliance with Northgate Arinso) software is expected to be launched in mid-2010.
The on-demand offering for large enterprises is part of a portfolio of solutions dedicated to different target groups, which also includes the SAP BusinessObjects OnDemand reporting, dashboard, and analytics offerings. These are respectively Crystal Reports software, the SAP BusinessObjects Information OnDemand portal, and the SAP BusinessObjects BI OnDemand solution, which are dedicated to businesses of all sizes.
At this point, SAP is not sharing any specific information on how the recent acquisitions of the platform as a service (PaaS) provider Coghead and mobile systems provider SkyData Systems are related to its future on-demand strategy. SAP will only go as far as to acknowledge that they are a part of it.
As in the case of SAP Business ByDesign described in Part 2, there has been no lack of speculation, misinformation, and sensationalism in the news reporting on the why, what, how, and when of SAP’s on-demand plans. It might be worthwhile to read Bob Evans’ Global CIO blog post as a response to a BusinessWeek’s previous article. Other balanced and informative articles would be ZDnet blog posts by Phil Wainewright, Dennis Howlett, and Brian Sommer, as well as the WSJ blog post by Ben Worthen.
In her recent blog post, Amy Wohl takes a critical view of SAP’s still thin on-demand arsenal by saying that:
… SAP is remarkably late to the SaaS market and has chosen a unique path which I don’t think will work: they want to keep their customers continuing to invest in very expensive SAP ERP applications while buying bits of SaaS applications for small outliers, on SAP’s schedule.
SAP’s defenders (or Salesforce.com’s attackers; there is some overlap), insist that SaaS is not suitable for enterprise users. Apparently they are unaware of the fact that hundreds of enterprises are using SaaS right now and intend to use more of it in the future…
I tend to agree with Amy in part. Namely, in light of offering SAP Business ByDesign as an on-demand suite to prospects and SaaS add-ons only to its current customers, isn’t SAP acting a bit in a bipolar manner and contradicting its own “testimony”?
Part 4 of this blog series will go back to the company that has inspired this series, Progress Software. The article will analyze what Progress has to offer to its ISV partners.
In the meantime, your comments and feedback with regard to the opinions and assertions expressed thus far are welcome. For both users and vendors, what are your SaaS experiences (both in using and delivering a solution) and how far down the SaaS evolution track are you? How do you view the mainstream enterprise systems providers’ SaaS forays?