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SaaS: MegaVendors Embrace SaaS, but on Their Own Terms
The SaaS phenomena is opening the new year with ever-growing momentum and analysts generally agree that 2010 will shape up to be a powerhouse year.
Large vendors, like Oracle, are increasingly coming to the realization that they need to address SaaS and the Cloud, but they are doing it on their own terms — in a way that continues their existing business model, pricing, and target market.
Many megaVendors have built up stories around SaaS and the Cloud, but when you dig deeper into what they are doing, you’ll find that these vendors often only have tweaked their on-site products so that they are available from an off-site data center. Their products continue to target very large enterprises and are generally priced out of the ballpark for most SMBs to even consider.
For example, Forrester Research reports how CA has moved to offer a product called Service Desk On Demand, but the smallest allowed user base is 50 service desk analysts, requiring a minimum of a one year contract, and is sold and provisioned off-line.
IBM has made Tivolli available on-Demand as Tivolli Live, but that product also is restricted to a minimum user base of 1000 to 5000 employees. HP similarly has been selling on-Demand offerings for some time, but it too is targeting large companies. And then there is SAP, who desperately wants to enter the SaaS SMB market but has been struggling with how to successfully package and deploy an on-Demand version of their ERP software.
The bottom line is that traditional megavendors are struggling. They are simultaneously conflicted with the threat of cannibalization of their existing products and handicapped with products that were architected for a non-SaaS world and which are often complex to configure and deploy.
