There have been quite a few blogs ( Smoothspan, SaaSWeek and SaaSblogs comments ) over the weekend about just this topic and to me its fascinating topic. It seems to me that it shapes SaaS’s future. Let me explain.
Its my belief (not experience) that one of the major drawbacks of on-premise software, especially in the ERP / CRM market, is that the time to install massive. When I was dealing with SAP in the UK it was close to 2 years for many customers. And the reason for that is that ERP deals were more an exercise in business process modelling than software. That is, the customers would take the software and then force it to be tailored to their specific business after undertaking a large and expensive consulting exercise. This of course is closely followed by an ever costlier customisation and implementation exercise. The end result is that the customer usually got something fairly closely resembling what they wanted (sic) and effectively had THEIR version of the code, which of course THEY had to support and upgrade and basically…they could never leave because of the massive investments (both in money and customisation).
So we move to SaaS, in this instance the customisation can happen but all of the customisation tends to happen on the front end and the complexity is dealt with by the provider. They have to build a system that allows for customistation per customer while still operating on a single instance of the code. But by doing customisation, businesses do delay the time to benefit in a SaaS world. For example, we’re 9 months into a Salesforce.com rollout here!
So my question is, why don’t business’s just take the code vanilla? If you did a TCO on an on-prem software installation and compared the cost of customisation and lifetime cost of ownership with the cost of changing the way you do business to suite the code what would you find? If you took the SaaS vanilla wouldn’t that speed up your time to benefit? Wouldn’t it make the SaaS providers job easier and therefore the
code service should be cheaper???
I know every business believes their unique, its a universal mantra, At a recent spat of focus groups I must have heard this 20 times …“my business is different”, “that might work for them but we do things different”. I think its wrong. And believe me, at the end of one very insightful group, the businesses there got that too….
So my question is….If you took you’re on-prem code vanilla, wouldn’t that attack one of the core value propositions of SaaS – speed to market and easy upgrades? I could finance all the bits and give you a monthly rental. I’m being provocative but am genuinely interested in the answer… please if you’re a lurker give me you’re comments.