Is SaaS (software as a service) really destined to replace on-premises software in the enterprise? The smart money seems to say so. Industry analysts certainly say so, and if you've noticed all the on-premises vendors launching SaaS versions of their software these days, it too appears to indicate that SaaS is the wave of the future.
According to the experts, SaaS is cheaper to deploy and maintain. It is also able to offer innovation at the speed of light, they say.
But maybe there is another story here that is not being explored. Could it be that SaaS software, in this age of planned obsolescence, is really just throwaway software? Throwaway software by the way is not my term but Simon Jacobson’s, an AMR analyst. Jacobson suggests this may be the case.
According to Jacobson, some companies are using SaaS as an interim solution. Try it for a year, two, maybe three, and when the time is right, dump it for something better.
That something better could be another SaaS application, yes, which in turn could be thrown away when it gets replaced by the new, more innovative solution that comes along.
Or it could be replaced by a more traditional on-premises application from a major, trusted vendor with a long history of understanding the needs of the enterprise?
SaaS does not require companies to make much of an investment, either in dollars or time. And in the sense that living with software is in some ways a relationship, SaaS requires less "commitment."
The recent announcement by SAP that its BBD (Business By Design) SaaS platform and applications will be delayed about 18 months cuts two ways.
It could mean that SAP can't compete very well in the new business model and it will be left behind by vendors that offer a solid SaaS solution to ERP, supply chain, CRM, and all of enterprise software right now.
Or, it could simply mean that the savvy IT buyers will look at this announcement and say, "OK, so we wait 18 months or 24 months until SAP gets its act together."
Why or how could they wait? The answer is simple. SaaS allows them to wait. They simply subscribe to a SaaS service that gives them what they need for the next 24 months, without the big investment up front, without the major commitment, and when SAP launches BBD, they simply throw away whatever it is they used in the interim.
If my theory is correct, SaaS may suffer the same fate as some prehistoric species that scientists say had so little skeletal structure that they left nothing behind for scientists to dissect. So, 10 years from now, not unlike 10 million years ago for that mythical prehistoric species with no backbone, no one will even remember SaaS existed.
What I am suggesting is that, with SaaS, we might just be witnessing a blip on the software screen that will not last.
What did you have for lunch a week ago Friday? Can't remember, can you. Someday we may say, what did we use until BBD or the Oracle 15i solution came along? Who knows, who cares.
Don't count the major on-premises vendors out. In a unique turn of events, it may be SaaS that becomes the dinosaur and not SAP, Oracle, Microsoft, et al.