Summits and a synthesis

Posted: December 9, 2009 in CRM, Technology
Tags: , , , ,

Summit must be the secular name our species came up with when we decided that certain business meetings had to have the same weight as religious conversions.  I am not trying to be contentious by using this vaguely religious metaphor so please consider me a radical centrist.  But after a few months of vendor meetings for the analyst community in which each took us to the mountaintop to survey — via PowerPoint — their future visions for the valley below, I am almost all summitted out.

The religious reference struck me yesterday at SAP’s, very good, analyst summit in Boston because, like some religious conversions, there seems to be a necessary pain component intended to make the conversion stick.  In most analyst summit meetings the pain comes from sitting still for many hours of the aforementioned PowerPoint presentations.

So, what did I learn?  Well, lots though I am a CRM guy and much of what was proffered were visions of a broader valley.  The biggest impression I came away with was intramural since, having been to Oracle Open World and Dreamforce, I am in a mood to compare, contrast, synthesize and perhaps even prescribe.

Put everything I saw at these and other conclaves into a food processor, run it on high until something resembling peanut butter forms and the result, to me, looks like this.  SaaS computing has won the battle, maybe even the war, but the victory is not enough to secure a homogeneous peace.  Translation: SaaS is important and the future of software, but there are multiple reasons why it will not reign supreme, not for a while at least.

A few weeks back, I noted that there are still some 6,600 mainframe computers not only in existence but in use and it will be some time before the population dwindles to the point that, like the B-24, there is a small handful of them capable of doing what they do.  The same is likely for premise-based enterprise software.

It’s not that on-demand technologies can’t do everything that the premise-based products can, rather it is that the premise-based solution vendors have examined alternatives and decided that retrofitting their wares with some of the best benefits of SaaS is enough for the moment.  It is also because customers of some application types are not ecstatic about sending their applications to the cloud.

Such has been the messaging that SAP, Oracle, Microsoft and Sage have been selling for some time now and it has legs.  No doubt this is vendor-generated paradigm extension.  Most important to this strategy has been the effort to retrofit their products with some of the popular attributes of SaaS.

For a long time things like better TCO, near-instant deployment and great configurability characteristics were the exclusive province of on-demand solutions.  But much of that has changed so that now enterprises that that once looked longingly at SaaS solutions have some reason to put more gas in the old car and drive a while longer.

That was a strong message I got from SAP — no they don’t and won’t offer every product on-demand but they can still deliver on the hot button customer issues, to a degree.  I am still puzzled by the customer who said he has sixteen instances of an SAP system and that he schedules updates and maintenance for all of them.  The SaaS-ist in me says, why?

To be sure, I don’t see any new applications coming to market that have not been conceived to be SaaS and that marks an interesting point in software evolution.  It’s quite possible that we are witnessing the bifurcation of the software business and that a part of the business will be on-premise well into the future.  That part will continue to diminish as a percentage of all software, especially as platforms like Force.com with its more than 800 applications continue to expand.

Perhaps this even means that, for a while, new applications will be smaller and focused on market segments rather than the all encompassing front and back office systems that have occupied our attention for the last couple of decades.  For example, Twitter and Facebook have huge numbers of subscribers but they are not nearly as complex as an ERP system.

So my conclusion, after a lot of airports and hotel rooms and as the circulation returns to my backside, is that we’ve achieved a kind of status quo between premise-based solutions and the cloud.  The frontier will keep moving to the clouds but there is life in the old paradigm.  And I suspect this will be a good thing as we turn some of our attention from software wars to the substantive questions of how we do business after the bubble and crash, as liquidity remains a serious challenge and, in the wake of Copenhagen, in a world more acutely conscious of sustainability.

Comments
  1. obscureco says:

    Points very well taken, Denis – although I think you meant “B-52,” not “B-24” – which was itself a great aircraft, but is not as good a metaphor for a piece of technology that keep doing the job in spite of groundbreaking advances all around them as the Stratofortress is…

  2. Denis Pombriant says:

    I really meant the B-24 since there are only one or two still flying.

  3. […] Pombriant talked in more detail about the cloud and SaaS versus […]

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