Archive for the ‘saas’ Category

Salesforce.com the SAP of the Saas World?

Friday, October 20th, 2006

Controversial as usual, Nick Carr’s insight into Salesforce.com’s Apex strategy is still definitely worth pondering. Almost all enterprise technology vendors are fighting for the Ultimate Platform or Infrastructure Utility position. Carr writes:

Now, I understand the rationale for the [salesforce.com's] decision: the infrastructure is the product. While Salesforce’s move opens up new opportunities for the firm, it also dramatically widens the competition it will face. Everyone from Microsoft to Google to Amazon is moving into the business of being an infrastructure utility. And, in an age of standardization, it will be interesting to see how customers react to the idea of running their enterprise applications in a private language. Is Salesforce the SAP of the SaaS world - and is that a good or a bad thing?

So the on-premise world has the choice of IBM’s Websphere, SAP’s Netweaver, Oracle’s Fusion MW and Microsoft .net as the unifying architecture. Of these SAP, Oracle and Microsoft command a dizzying array of 3rd party applications to “plug-in” to the platform and provide both functional richness and flexibility to the offering.

While Oracle and SAP have both on-demand and on-premise offerings Salesforce.com has the entire architecture based on SaaS and therefore did not have platform-play aspirations until this last week. With Apex it is now offering a “Platform through the Web” proposition which will broaden the platform wars that raged primarily on premise.

Maybe winning in Enterprise 2.0 will ultimately be about creating a standard platform that unifies on-premise and on-demand.

Communicating the revolutionary platform change in non-techno speak to the board rooms has been challenging for most CIOs.
Now that we are back in the growth (innovation) stage of the economic cycle in most industries and technology innovation dollars are still consumed by maintaining unwieldy infrastructure in most IT shops, the promise of the Platform, the liberation of process and technology innovation is bigger pressure than ever. Technology and process complexity is the ultimate barrier to growth so most companies will ultimately move to an infrastructure utility and this transition will be very interesting to watch over the next decade being fought out between the on-premise giants and the SaaS challengers.

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Posted in Complexity, ERP, Oracle, SAP, Strategy, business models, enterprise 2.0, on demand, saas, software | No Comments »

On Demand and Process Optimization

Monday, October 16th, 2006

Zoli had a great insight of a potential “Blue Ocean” emerging from the Saas/On Demand space. Saas vendors hold customer data and could develop the ability to offer statistical services ranging from benchmarking through process management to process optimization.
Today these offerings have not taken hold but I can imagine selective opt-in by businesses for higher value-add services like:

  • Process benchmarking - based on transaction data available voluntary participants could receive real-time comparison of their performance against their peers. These would be for areas not considered competitive edge, most notably finance (headcount allocation, transaction costs, cost of service, billing cycles, DSO), human resources (rev per employee, retention metrics, training metrics, etc), procurement (supplier performance, DPO, etc).
  • Process management and optimization - develop systematic recommendations on how to tweak workflow, process steps to have a more streamlined, lower cost process. The system can monitor everything from dispute management (DSO) through supplier performance and recommend corrective actions (replace suppliers with a better one).

If we couple low user cost of on-demand with process optimization typically provided only by large-scale business process reengineering with ERP/CRM enablement then we have real value proposition. Low cost is important but as most companies move to growth mode from efficiency optimization we need more than cost savings to make on demand stick.

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Posted in Productivity, Strategy, Value Engineering, business models, on demand, saas, software | 1 Comment »