SaaS – Vendorprisey

Launching Otter Advisory

OtterAdvisory_Logo_final

Hamlet: Do you see yonder cloud that’s almost in shape of a camel?

Polonius: By the mass, and ‘tis like a camel, indeed.

Hamlet: Methinks it is like a weasel.

Polonius: It is backed like a weasel.

Hamlet: Or like a whale?

Polonius: Very like a whale.

Hamlet Act 3, Scene 2.

There are many opinions and much confusion about the cloud. This isn’t a new problem.

The promise and opportunity for software to change how work is done is tantalising and very real. While the stakes have never been higher, understanding enterprise software is harder than ever. The vendor landscape is shifting; old, comfortable assumptions no longer hold. Marketing creates a sheen that is often difficult to see past. Knowing what is real and what is not requires experience, focus, insight and sometimes luck. The decisions about Human Resources technology that organizations make today will have consequences far into the future.

I’m excited to announce that – based on my experience and network accumulated in building and analysing HR technology over decades – I’m forming an advisory firm to do just that. The goal of Otter Advisory is to help enterprise buyers, builders and investors understand the weird and wonderful world of HR tech a little bit better – to make the decisions that lay strong foundations for future success.

My business plan is, in theory, simple – I’ll work with complex, global organizations to help them figure out their HR technology strategies. I’ll work with software product managers to help them build better enterprise software. And I’ll work with a number of investors who seek to fund, trade, or acquire HR technology companies. I’ll also share some of my thinking and findings in blogs and research notes, and possibly videos.

I aim to be transparent. The vendors that pay me for advice, I’ll disclose. If I hold significant equity positions in vendors, I’ll disclose that too.

The website is over at http://www.otteradvisory.com. I’ll blog there, here on Linkedin and also on medium. I have a lot to learn about building an advisory firm, so I have been bending the ear of others that have done this before, and I will continue to do. I’m grateful to those that have shared their wisdom so abundantly with me. A more fulsome thank you post will follow soon.

If you reckon that I might be able to help you or your organization, let’s talk. I’ll be at Unleash in Amsterdam from the 23rd-24th of October, or drop me an email.

(Crossposted on Linkedin, and Otter Advisory).

3 years in, 12 releases and Sapphire.

I joined SuccessFactors just before Sapphire in 2013. The 1305 release was pretty much baked, and I spent the first few weeks getting to know my new colleagues, and reconnect with those that I had known from my earlier times at SAP. Moving from talking about software as an analyst to being responsible for making sure SAP SuccessFactors built the right stuff was a steep learning curve, and one that I’m still on. I learn new stuff every day, and my curiosity has not been sated. I continue to make lots of mistakes, but hopefully not the same ones. I’m lucky to be surrounded by clever, determined and open minded people. That makes my job a lot easier.

At times it feels like yesterday, sometimes it feels like a century ago. Since the 1305 release, we have shipped the best part of 6000 enhancements. Some large, some small. Most of what we have built, we built it by listening to customers. This week, before Sapphire, we finalizing the 1608 build plan. The scope and scale of the build plan is far bigger than it was 3 years,ago and we continue to Kaizen (is that allowed as a verb?) the process, but we ask ourselves the same questions. Who are we building this for? Why? How can we simplify it, how can we make it easy to deploy?

As I was writing this post, I reflected back on what I wrote when I left Gartner, and I’m pleased to report that my expectations have been met. Over the last three years there have been many highlights. I think of sharing the stage with Plan, one of the world’s leading charities, or EC hitting the 1000 customer mark, the Brook Brothers moment, or seeing the next generation of leaders develop in product management team.

This year at Sapphire I’m looking forward to meeting partners,colleagues and prospects. We have a number of exciting announcements on the product side, and there is one in particular that I’m very excited about. More than that though, catching up with live customers is what makes these events worthwhile. Seeing Woolworths Australia, Timken, PepsiCo and several others on stage will make the trip to Florida all the more worthwhile.

There are many sessions going on, have a look here.

Some of the session descriptions a tad cryptic, but if you read the session details you will able to pick out the ones that work for you.

If you want to meet up at Sapphire, work through your account manager to set up a meeting, or ping me directly.

Employee Central Momentum

I had been meaning to write about EC momentum for a little while, and the press releases this week makes this week as good as any to do. Here is the juicy bit from today’s earnings announcement.

Human Capital Management Shows Strong Momentum

Customers are increasingly turning to SAP to manage their global workforce, both permanent and flexible. The customer count for SuccessFactorsEmployee Central, which is the core of our Human Capital Management offerings, surpassed 1,000 for the first time in the fourth quarter. SAP is winning against its key HCM competitors, especially in markets outside of the United States. For example, Lufthansa selected SAP SuccessFactors. SAP’s innovations in HCM will further increase SAP’s differentiation and drive market share gains.

Over a year ago, I wrote about the trajectory EC is on (Thank goodness for spellcheck, as trajectory remains a very awkward word to spell). 1000 customers. Sweet.

I’m writing this on way back from the sales kick off in Barcelona. It was fun meeting up with a bunch of happy and fired up sales folks and partners. I heard about successes in UK, Russia, Germany, France, Czech Republic, Portugal, Switzerland, and the UAE is totally rocking. Belgium too. It was especially nice to see the SAP South Africa gang. I’m expecting a gangbusters year from them.

The feedback on roadmap was gratifying, and it helped vindicate a couple of decisions we made last month. After a couple of days of tapas and sunshine, it is time to head back to Germany and focus back on the build plan for 1605 and 1608.

This morning on the plane, I thought about some of the EC customers that impacted my day in some way.

The coffee/s I drank, the toothpaste I used, my shaving stuff, the shower and sink manufacturer, my socks, my shoes, my jacket, the weather app I checked on, the phone network, the lenses in my glasses, the fridge in the hotel room, my briefcase, the elevator I took to the lobby, the tyres on the taxi that took me to the airport, the fizzy water I drank, the football boots worn by the dude that scored the goal in the Spanish league last night, the bolt holding up the roof in airport terminal, the yoghurt I had for breakfast, the shop I bought it in, airline that is flying me home, the satellite guiding it, the seat I’m sitting on, the publisher of the book I’ve just finished reading, and the maker of the guitar that David Bowie* played on the single I’m listening to as I write this. All of these companies run EC.

While it is great that the SAP press department has called out EC’s success in the press release and EC has featured prominently in the last couple of earnings calls, I’d like the mention the successes we are having with the other SuccessFactors products.

Onboarding is the fastest growing product in the portfolio, and has smashed every expectation. The feedback from the early adopters of intelligent services and the integration center is very encouraging. The multiposting acquisition is already gelling. I’m fired up to work with Simon and his team. More than ever, I’m convinced that we have the right approach and mix of organic and acquired innovation.

In the hotel in Barcelona last night I caught up with a start up partner, Enterprise Jungle. The CEO took a very early big bet on SuccessFactors extensibility with MDF and the HANA Cloud Platform, it was lovely to hear how that is now paying off. He explained how they are building a specialized offline and mobile performance management application with HCP for airline pilots to use, it enables them to rate the crew and other colleagues, then automatically syncs up with EC, Talent and even CRM. I also heard from Benefitfocus, Workforce Software and Docusign about the strong progress we are making together.

A few years ago, the early adopter customers helped us get this product off the ground. To all my colleagues, whether at SAP Successfactors or in the partner community, thanks for your dedication. You should be proud of what you have accomplished. More than anything, it is by listening to and learning from customers that we have achieved this milestone. There is still lots to do, but the trajectory remains on track.

*So long Ziggy Stardust, you made the world a better place. For Bowie fans, have a listen to this.

aSaaSination revisited

Jason Wood looks at the Netsuite IPO in some detail.

Given the dearth of attractive software IPOs, there’s little question that NetSuite will be a sought after issue and get banked by the top bulge bracket banks. But is it reasonable to expect investors to pony up a valuation similar to what CRM received?

I will leave the valuation to the experts, but I was struck by the size of the marketing and sales spend

In a filing with the Securities and Exchange Commission, the provider of on-demand enterprise-resource planning software reports solid revenue growth: from $17.7 million in 2004, to $36.4 million in 2005, and then $67.2 million last year. But up until last year, sales and marketing costs always exceeded revenue: $27 million in 2004, and $39.2 million in 2005. Last year, sales and marketing costs were $43.9 million, or 53% of revenue.

That’s not unusual. Salesforce.com’s sales and marketing costs, for example, typically hover between 50% and 70% of revenue, according to past financial statements. That’s huge compared to traditional software vendors where sales and marketing costs typically run between 20% and 25% of revenue

What happened to all of that bit of the creed where SaaS would be driven by viral user adoption rather than herds of sales people?

Phil Wainewright picks up on the relatively high running costs

bigger problem for NetSuite though is its cost of revenues, which is what it spends on running its hosting operations and on professional services. When Salesforce.com had its IPO, it was reporting costs of around 18% of revenues (it has since risen to 24%). NetSuite’s costs were 34% of revenues in 2006, falling to just below 30% in Q1 2007. Unlike Salesforce.com, NetSuite doesn’t break out the professional services element of that figure, but that is likely to be the larger component and it’s difficult to see it reducing significantly in the near future since NetSuite has been targeting larger customers with more complex implementation requirements. Meanwhile, NetSuite faces higher hosting costs in 2008 as it plans to add a second hosting center — something that Salesforce.com already did a year ago

If marketing and sales are running at 53% of revenue, and the cost of running the system is at 34% then that doesn’t leave a whole lot over for R&D.

Those that challenge the “traditional” vendors ought to have a field day with these numbers. To paraphrase “Where is the innovation in the dollar invested if more than three quarters of revenue goes on sales and marketing and hosting costs?”

I’m not dismissing SaaS. It is a very effective way of delivering applications, and by my reckoning it will become more and more important. It is already disruptive. Josh has a thoughtful look at Netsuite here. (Not sure about the iphone bit though)

Meanwhile, as disruption is looming in the maintenance side of enterprise software, NetSuite is heading to market with an on-demand ERP offering that tries to disrupt the key delivery model of enterprise software. Of course, NetSuite is just the latest in a list of disruptors, starting with Salesforce.com and SuccessFactors, and I have always felt that NetSuite is missing a lot of what would make it a truly competitive offering vis-à-vis the suite applications that it competes against.

But with the smart money pegging this as a potential billion-dollar IPO, the “on-demand ERP for the mid-market” disruptors are firing all over the market. And no where more strongly, and disruptively, than at SAP itself.

I refer, of course, to SAP’s much-vaunted A1S – the iPhone of enterprise software. This on-demand ERP system, which deploys in a fully-model driven way, is, in my opinion, a real NetSuite killer, once it hits the market. The demo I saw of A1S was truly impressive, and I believe that it will meet expectations when it hits the market later this year or early next.

SaaS isn’t magic though. You still need to sell and run it. Call me old fashioned but a bit of profit, or at least the hope of some isn’t a bad thing either.

Whatever happens with Netsuite and its IPO, we are in for interesting times….

Technorati tags: SaaS, CRM, ERP-solutions, Netsuite

In defence of concrete

Phil Wainwright recently picked up on a rather clever dig against ERP, putting up a picture of a concrete block, and equating it with ERP systems.

At first I laughed and grimaced slightly. I thought about arguing about SOA but then luckily I remembered a building architect friend of mine raving about concrete.

He eulogised about how strong, elegant, durable, flexible, economical and beautiful it is. It enables structures and forms that were previously unimaginable. Construction costs are significantly lower because of concrete, and it comes in many forms. Concrete is the backbone of modern construction, and it continues to evolve.

(photo of the Humber bridge, courtesy of Sunshine Hannan’s flickr)

The Clyde Arc, also known as Squinty Bridge. (courtesy Colin Angus Mackay: his dayjob site is here.

True, concrete has spawned some monstrosities, but it produces structures and buildings that delight and revolutionise the way we live.

On the other hand putty: It fills hairline cracks. Is great for children and artists or for taking imprints of keys in spy movies. It is useful for keeping glass in place in old buildings, and has been used by Nick Park with great success. Also, unless you keep the lid on the jar it turns into a brittle blob.

But software architecture, like building architecture, is more complex this post makes out. Stewart Brand’s pace layering deserves more attention. Perhaps more on that another day.

Technorati tags: humour, SAP, SaaS, Phil Wainewright, ERP, pace layering, software architecture

SAP Analyst event blogging

Most of the Enterprise Irregulars blogging coverage of this week’s SAP analyst event was neutral to mildly negative. Look at Dennis, Jeff, Jason, Dan. I’ve had a rather busy couple of days, so I’ve only the viewed the Webcast this evening.

Vinnie commented as follows:

Reading the posts from SAP’s analyst summit from fellow Irregulars – Dennis, Jeff, Jason, Dan I think it may be time to embargo news for SAP also. It’s just lots of big ticket/low payback projects (SOA, Compliance, Duet), fixation (on Oracle), self-delusion (Shai saying SAP will have 10,000 customers on SOA by end 2007, compared to 400 today; Peter Graf suggesting there are no integration costs around SAP. News to SAP’s not-so-small SI ecosystem).

Like Mark, I hope Vinnie continues to blog about SAP, even if he does knock us. It is good to have the dialogue. I don’t think that he does the event justice though. Look and listen yourself and make up your own mind.

It seems to me that Josh Greenbaum went to a different event. He is really positive.

In the category of overall market leadership, SAP took the biggest leap of all, and landed squarely in the process. On the morning of the second day of the conference, SAP’s Peter Zencke unveiled what the company calls a “SOA by Design” platform that effectively will let a mid-market company switch on or off a select set of processes that in turn will yield a pre-configured MySAP system. To answer one of Dennis Howlett’s questions, this will in turn be potentially available in SaaS mode, which of course is exactly what the mid-market would love to see. The Zencke demo was definitely a live demo, running on a system back in Waldorf, and complete with a “server not found” error message. But it had the right effect: highlighting not only SAP’s ability (thanks to its partnership with IDS Scheer) to model complex business processes in a SOA environment, but also showing that, underlying the theory of SOA and the theory of model-based deveopment are some very serious and extensive business processes that SAP owns and can deliver to its customers’ advantage.

It is a pity that the second day isn’t on line yet. I hope the analyst relations folks stick it up soon. I’d like to watch the Peter Zenke demo. (I’d guess that having board members that have a passion for and deep grasp of code is a whole lot better than being run by investment bankers.)

The mid-market project has been called A1S internally, and mentioning outside SAP was theoretically taboo. It is a relief now that the A1S story is now out in the open.

The blade centre model is a take on SaaS that some of the SaaS priesthood will deem impure, but I think proof will be in the delivery.

Now the “go to market story ” must come together. Many of brightest developers here at SAP have been working hard over the last couple of years, it is now time for the marketing folks to do their job. I hope the messaging will be simple and compelling. The product will be. I have seen it and it rocks.

I do worry that we have a tendency to overly focus on the recipe and not on the meal.

Jason also covered the Citigroup’s Thill & AMR talk software session. Lots of positives for SAP there, and some key things we need to focus on.

Bruce cautioned that SAP and Oracle need to do a better job at articulating the value proposition of their new SOA-based platforms, because many customers remain unclear about how the technical aspects of the new platform really benefit them in terms of improving business process.

Bruce and Shep agreed that it all comes down to SOA and converging the marketing hype with business value to customers. Both Oracle and SAP are spending a ton of marketing dollars and messaging on SOA; yet their customers remain very confused and unclear about the value proposition.

In a recent note Jim Shepherd commented

One of the best indications of a technology maturing is the vendors finally stop talking about it. We may finally be reaching that point with service-oriented architecture (SOA).

I’m hoping that we stop talking about SOA, and just show the applications that use it.

Technorati tags: SAP, SaaS, SOA, Analysts, enterprise irregulars

Definitionitis

I wonder if back in the time of Gnaeus Flavius they had heated debates about the meaning of legal terms, and had bragging rights as to who came up with the catchy phrase: Cui testimonium defuerit, is tertiis diebus ob portum obvagulatum ito. (One who seeks the testimony from an absent person should wail before his doorway every third day) .

The blogsphere is awash with definitionitis. Web 2.0, SaaS, Enterprise 2.0 I’m also infected, but Nicholas Carr has it really bad.

Technorati tags: roughtype, definitions, SaaS, Enterprise 2.0, Web 2.0

Airbus, Lufthansa, Ryanair, BPO and a little sprinkle of SaaS

FaaS. Flight as a service.

Like many of my fellow SAP Walldorfites, I spend too much time in Terminal 1 at Frankfurt Airport. I used to think that queuing was something done in communist countries to get bread, but now I realize that queuing is what we in the western world now do to earn our bread.

I fly with Lufthansa a lot, and I’m a fan. They are mainly on time, and I collect the rock hard bread rolls one gets in economy class and I’m using them to build an ecofriendly house. Lufthansa works for me because they have more direct flights from Frankfurt than anyone else. I also get to read the FAZ and improve my German.

I have a German colleague, who, when he gets on the plane, can tell me what model of Airbus it is, its range and even who made the engines and their thrust. I try to avoid sitting next to him.

Most of us want to get from A to B as quickly and safely as possible. If the lounge is nice, that’s a bonus.

Software is pretty much the same most people just want to get something done for them. If software can do it quicker or better, great. As vendors, we are often a bit like my colleague in 13D. We talk about details that bore normal people.

Designing, building and delivering an aeroplane is damn difficult. Ask Airbus at the moment.

You need lots of clever aeronautical engineers (what a cool job that must be), Experts in composite materials and wiring (whoops), and project managers. It is a massive capital and intellectual undertaking to build a machine that can lift people into the air and whiz them around the planet.

Running an airline, on the other hand, is a service. It is also difficult, but it is a different kind of difficult. You need to focus on punctuality, service and cost. Customers demand the service at the lowest cost. The personnel are focused on serving the customer, at least in theory.

It is a service business, run on tight margins.

That is why Lufthansa and Ryanair just buy or if they are really clever lease planes, they don’t make them.

what has this got to do with BPO and SaaS?

I’ve been thinking about BPO and SaaS alot lately. They aren’t exactly the same, but they have a lot in common. Jim from Gartner has provided some definitions in response to the SaaSquisition.

The BPO sector has matured a lot over the last couple of years, and we have seen several trends emerge.

1. Standardization is king. BPO providers don’t want to take over messy bespoke processes and run them for you. They are pushing standardization.

2. BPO providers want a single platform to run. Like Ryanair, they want to fly one type of plane.

3. Many BPO providers have realized that they are in the business of selling a service, not building software. Building scalable, standard software to handle complex business processes is not easy.

4. Managing Risk is important. BPO sometimes fails.

5. Winning the deal is the easy bit.

6. Managing what isn’t outsourced is vital to outsourcing success

I’ve mentioned ADP alot here on Vendorprisey, but I’d like to point you to another BPO provider who is doing well too. Arinso. Business is good for them. They use SAP software to run HR services to a number of major global players, and they have an excellent relationship with SAP. I saw a demo at the SAP UK user group of some cool Ajaxy front end stuff they have done for their on-demand offering, which they call EuHReka- thanks Alex and Liz. Arinso has a new GM in Australia, a long lost friend, Caroline Duvoisin, she is ex-SAP and ADP.

(There was a webcast with SAP yesterday, but the recording isn’t online yet I’ll update this when it is. I’ve taken the slides below from the presentation that Rudy did)

I’m often asked why SAP doesn’t offer “BPO”, it is the same reason why Airbus don’t run airlines. ADP, Arinso, Convergys, ACS and others are thinking the same way. They are in the service business, not the software business.

There is some good stuff on SAP and BPO over on the SAP site Check out this webcast with Gianni Giacomelli from SAP, and Stephen Dunn from the Everest group discussing Risk in BPO, and technology’s role. I think I’ll ask Gianni to do a guest post or maybe even a podcast. He knows lots about BPO.

BPO is normally about outsourcing big multi-process operations like HR, or F&A, or bits of those. The customer buys a service, not the software. That doesn’t mean that the software isn’t important. Like the plane, it needs to be safe, and Singapore airlines use the newness of the fleet as a competitive edge. Ryanair standardized to cut cost. Airlines are looking to the planemakers for more fuel efficiency. There is a real partnership between the airlines and the planemakers, even though there are many more airlines than planemakers…

This is the model we want to achieve with BPO. We want to provide the software that powers the BPO industry, and we are on the way to succeeding. If you are planning to outsource your HR processing, odds are it will be onto an SAP platform. We have been investing in this for the last few years, and it is now starting to pay off handsomely.

Vinnie has come up with SACS. The concept is good, but I think this has been happening now for some time. In the comments on a recent post he asked why wasn’t SAP doing more to help the ecosystem. I’d suggest he have a look at what we are doing with folks like Arinso.

This is how Arinso read the customer demand, and their response.

And these are the delivery options.

As you can see the HR outsourcing model has moved on. The configuration is dramatically reduced through template, preconfiguration and serivce catalogues.

Recent wins for Arinso include Repsol and Bank of America’s European operations.

I’ll see if Rudy can send me a demo and I’ll link to it here.

I was going to extend this metaphor to SaaS, but I couldn’t face another visit from the Spanish Inquisition. I’ll pose a question instead.

What would happen if big software vendor was to build a fabulous platform, with 1000’s of preconfigured services ranging from HR to CRM, that met all the technical SaaS purity laws (SOA, MT and so on). Then it had several service vendors who really understand running a service profitably run them?

Technorati tags: SAP, SaaS, BPO, ADP, Arinso

The cult of SaaS. Nobody expects the SaaSquisition

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.

Technorati tags: SaaS, SAP, salesforce, enterprise irregulars, ADP