Nicholas Carr, Vinnie, Jason, Phil , David and several others have picked up on the McKinsey Report about SaaS.
For ages I have been trying to figure out what SaaS is. I’m still no clearer, and I have read masses of posts, analyst reports, marketing materials and irregulars emails. It seems there are different forms of SaaS, including the highest forms of SaaSdom, “pure” and “true” SaaS.
Jason asks an important question.
How did McKinsey define SaaS? — Put 20 technologists in a room and ask them to define SaaS, and you’re going to get at least a dozen different answers. Is SaaS any software solution that’s provided in a hosted environment? Is multi-tenancy a necessity? Is subscription pricing requisite? If McKinsey doesn’t tightly define SaaS to the CIOs surveyed, the potency of this data loses much significance.
This is my problem with SaaS. What is or isn’t “allowed” to be called SaaS seems so arbitrary. Have a look at the wikipedia entry. A good bit of it is about what SaaS isn’t.
I’ve mentioned the Monty Python Spanish inquisition before when discussing the high priests of SOA, but it may be appropriate here too.
I never expected the SaaSquisition. Haaa! Nobody expects the SaaSquisition
The unique property of SaaS is that it is hosted and that is multitenant..
Haaa! the 2 unique properties of SaaS are that it is hosted, multitenant and subscription based..
Haaa! the 3 three unique properties of SaaS are that it is hosted, multitenant, subscription based and uses AJAX
Haaa! the many unique properties of pure and true SaaS are that it is hosted, multitenant, subscription based, uses AJAX , REST, RSS , is completely brand new, is bought by the lob, requires no training, isn’t tainted by the evil dark side of on-premise, sells virally without a salesforce, has a seasonal release cycle and knows the secret SaaS handshake.
Make no mistake, here in starship enterprisey we see the SaaS wave. There are some great solutions out there in the “cloud” I see some HR executives buying SaaS offerings instead of deploying in-house applications simply because the in-house IT is too busy doing “mission-critical” supply chain stuff to talk to the HR folks. Successfactors is vendor benefiting from this.
SAP’s approach to SaaS is cautious to date, but it would to foolish to imagine that we are ignoring it.
I find the talk about “hybrid”, “pure” Saas and “true” SaaS very Peoples Front of Judea. I’m tired of all this purity stuff.
David is uncomfortable with my assertion that SaaS is bureau rebranded,
Of course there are still some who question whether SaaS is just an old idea with new marketing spin. In recent dialogue another Irregular, Thomas Otter of SAP, believes that SaaS is simply bureau computing from the 60s and 70s, or ASP from 5 or 6 years ago rebranded. I’ll argue the case for the differences another time, but the key thing is that these sorts of multi-tenanted, hosted (true SaaS) solutions are set to become a much bigger component of the average company’s solutions portfolio in 2007.
Show me what is a) new AND b) unique and I’ll repent, kill a goat and join the cult. The technology has moved on since punchcards, but the business model has not changed. AJAX, SOA etc are not the sole preserve of the SaaS vendors.
SaaS is simply the latest evolution of the bureau. This is a fine thing. Using the term bureau in the 1990’s was uncool, so the term ASP was born. Many ASP’s slipped on the 2000 banana skin. New players needed a new name, something to distance itself from the ASP days, and something hip that would make hosted applications cool again. As much as I hate the 2.0, 3.0 game, SaaS is Bureau3.0. There is nothing wrong with running a bureau well -recently ADP marked the 32nd Consecutive Year of Dividend Increases.
ADP, not Salesforce.com is the largest SaaS provider.
In 1949, when one of Henry Taub’s two partners in their joint venture chose to leave because growth was simply too slow, Henry decided to buy out the remaining partner. Although he was only 21 years old at the time, he never made a bigger business decision in his life. So, for the sum of $6,000, he became the sole owner of the small enterprise that offered, for its day and age, an unprecedented service — but up to that point had only one client. The business was called Automatic Payrolls, Inc. It manually processed company payrolls —providing everything from doing the calculations to preparing the checks and the payroll register.
The idea for the service actually belonged to Henry. As the story goes, one day he was visiting a nearby company. A key employee had taken ill, the payroll wasn’t done, and the workers weren’t paid on time. Company managers, who knew nothing about doing payroll, abruptly put aside their other duties, and together
they finally got the payroll out. Henry was astonished at the disruption that was caused. Employees were angry. Managers were frustrated. Productivity suffered. All because a key person wasn’t available to prepare the payroll.
He wondered how many other companies faced similar crises, because a payroll wasn’t done on time. From that observation
came the unique idea that launched Automatic Payrolls. He would offer a payroll preparation service that any business could use. One that was not only accurate and dependable, but also affordable.
Sounds exactly like the SaaS promise to me.
Read the history of ADP here. You’ll see that they do a lot more than just payroll.