{"id":162,"date":"2006-12-20T09:55:13","date_gmt":"2006-12-20T17:55:13","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=162"},"modified":"2006-12-20T09:55:13","modified_gmt":"2006-12-20T17:55:13","slug":"saas-to-further-erode-us-it","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/saas-to-further-erode-us-it\/","title":{"rendered":"SaaS to Further Erode US IT?"},"content":{"rendered":"<p><a title=\"InfoWorld\" href=\"http:\/\/www.infoworld.com\" target=\"_blank\">InfoWorld<\/a>&#8216;s <em>Immodest Predictions for 2007<\/em> are headlined in their December 18th issue.\u00a0 They include:<\/p>\n<ul>\n<li>Sun Microsystems will bounce back with great technology and Open Source offerings<\/li>\n<li>CPU performance (64-bit and denser multi-cores) will trump &#8220;green&#8221; and low-watt<\/li>\n<li>Cisco will continue to push security and will make security company acquisitions<\/li>\n<li>Open Source Java won&#8217;t play out to be very much different that the Java we know now\u00a0<\/li>\n<li>Offshore SaaS providers will <a title=\"Offshore challenge to SaaS\" href=\"http:\/\/weblog.infoworld.com\/realitycheck\/archives\/2006\/12\/07_predictions.html\" target=\"_blank\">seriously challenge<\/a> US incumbants like Salesforce.com<\/li>\n<\/ul>\n<p>The last prediction about SaaS was made by Ephraim Schwartz and it may well have some truth in it.\u00a0 He predicts that in early 2007 an offshore Salesforce.com clone, maybe from India, Russia, Botswana or someplace\u00a0will come along that is cheaper and will be functionally superior to what Salesforce has to offer.\u00a0<\/p>\n<p>Schwartz goes on to say, that based on Gartner&#8217;s prediction that by 2008 70 percent of SaaS offerings will target business units and line managers, SaaS also is creating a trend where business units will bypass traditional IT organizations.<\/p>\n<p>Global SaaS is definitely alive and well.\u00a0 In a recent\u00a0<a title=\"Springboard\" href=\"http:\/\/www.springboardresearch.com\/\" target=\"_blank\">Springboard<\/a> <a title=\"Springboard Asia survey of SaaS\" href=\"http:\/\/www.cio-weblog.com\/50226711\/india_fastest_growing_saas_market_in_asia_springboard.php\" target=\"_blank\">study<\/a>, analysts\u00a0found that global growth of SaaS was robust, and in particular, identified India\u00a0as the hub of SaaS activity in Asia.\u00a0 The study shows that in Asia SaaS adoption is being driven by primarily by cost.\u00a0 Winners in that environment are sure to be cost-efficient.<\/p>\n<p>Does that mean that US-based SaaS\u00a0players should be worried?\u00a0 A dose of Andy Grove <a title=\"Paranoia\" href=\"http:\/\/www.intel.com\/pressroom\/kits\/bios\/grove\/paranoid.htm\" target=\"_blank\">paranoia<\/a> is probably healthy.\u00a0 SaaS, by its nature, further lowers the barrier to entry, so it is likely that SaaS will take up roots world-wide, enabling ever more intense global competition.<\/p>\n<p>But will Schwartz&#8217;s prediction be valid for 2007?\u00a0 He has singled out Salesforce as the target, but it may be more likely that global SaaS offerings would be more successful first in other niche areas.\u00a0 Hosted CRM is already crowded and populated with many Open Source offerings, like SugarCRM or Centric CRM, and Open Source eliminates many of the advantages of offshore development.<\/p>\n<p>Further, Salesforce has the advantage of incumbancy and the fact that US companies prefer local support.\u00a0 Salesforce&#8217;s AppExchange initiative which draws together a community of ISV and partners into what is being called an <em>ecosystem<\/em> will be something that will be hard for new players to replicate, offshore or onshore.\u00a0 At least in 2007.<!--c8931e3a356c5caf6a5283eaae91041e--><\/p>\n<div class=\"lightsocial_container\"><div class=\"lightsocial_element\"><a class=\"lightsocial_a\" 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