Ever since SAPPHIRE06 - Bloggers Corner, I have been meaning to write about SAP & Software-As-A-Service, well a post at the IDC Exchange site & than this interview of Shai Aggasi at SFGate.com...finally got me around to writing some thing down

Well the IDC post seems to have taken a view that SAP is not only PRO-SaaS, but pushing hard in that area, But I disagree.....


Some excerpts from the IDC Post:

All SAP applications are moving to "on-demand" - SAP intends to offer SaaS ("on-demand") versions for the entire suite of mySAP applications. This is a logical direction, given the growing demand for SaaS.During the conference, the question that occurred to me was "Is SaaS belief in SAP or just a block out strategy", I wanted ask this during the press conference, but we ran out of time so I asked a couple of people during the discussions and some interviews.

These three public announcements are signs that SAP sees the need to strengthen its SaaS position; after all, it's late into the game relative to its traditional competitors as well as fast-growing newcomers. But in presentations and private discussions, executives shared behind-the-scenes details and plans that suggest that SAP is well down the road in understanding that offering SaaS is more than just a customer checklist item; it is becoming a strategic pillar for the company's future.

I don't want to romanticize or over-state SAP's views and plans around SaaS: I doubt that SAP management is "in love" with the SaaS model, and I heard a number of mixed messages about SaaS from some SAP executives. As a hugely successful incumbent in the packaged, on-premise software model, I'm sure that many SAP executives (and shareholders) would be very happy if the SaaS model just went away. But what I saw and heard at SAPPHIRE convinces me that SAP leadership is, at minimum, strongly hedging its bets - putting the company in a position to not just protect its old business model, but to be competitive in the new model.

During the SAPPHIRE06 conference, the question that occurred to me was "Is SaaS belief in SAP or just a block out strategy", I wanted ask this during the press conference, but we ran out of time so I just spoke to a couple of people during the discussions and some interviews.

And my conclusion is, NO it is not a belief, atleast at at this time,

Some of the reasons why I think so are, the On Demand /SaaS group is buried within the CRM Group, when we asked the VP Product Development of the CRM practice if there were any plans to get other modules he said, he wasn't aware of the same, each module or app has their own on-demand approach,if any, and there were no available/discussed plans / roadmaps for any of the other modules/apps to be SaaS enabled (Only SRM, because of an acquisition - Frictionless) & While discussing with some of the executives , they came across as feeling that On-demand/SaaS is more hype and it is required to make sure they dont have any problems at the proposal stage for a lack of an on-demand option or positioning against specific vendors.

Here are some excerpts from the interview which is of relevance (make sure you read the last Q/A):

Q: On-demand software, where customers use software that is stored and maintained by another company, is a growing trend in your industry. How big of a threat is that to your business?
A: My personal view is you'll see three consumption models at the end. The first model is where I buy, I install, I modify, I maintain it. It's my system. So I'm independent. Then you'll see the on-demand model. I sign on to the program and I trust you to take me in the right direction. And I trust that the software is not going to die at the end of every quarter.
Then there will be a model somewhere in between that I'm calling the managed appliance model. I want my box, but I want you to manage it for me and so you give me the software. You tell me when there's a wave of upgrades. If I decide to turn it on or off, it's my decision. But I don't need to manage it. You manage it for me.
It's not going to be a binary decision for a company -- do I go to Model A, B or C. It'll be a hybrid across all these models.

Q: There have been questions about security and reliability with the on-demand software companies. Is the on-demand model reliable or are there problems?
A: We also have an on-demand business and we make on-demand secure and reliable. The real issue is again that transportability. Can I take my on-demand system after two years where I paid you monthly, move it on premise, make changes and pay you once? Or is that code designed to be shared with lots of other people and I can't really take that system on premise? That hybrid approach is still not solved by the pure play on-demand sellers, and we believe we cracked that already.

Q: So it doesn't sound like you think on-demand is going to become the future of software?
A: I think it's trendy. I don't think it disappears and I don't think it takes over the world. I think it becomes one more consumption wave. I'm sure you guys wrote a Tom Siebel article four or five years ago where he was supposed to take over the whole software industry.

Note: Trend....Fashionable...Fad, well thats not what you would refer to a beleif as, it sounds more like yes we have to do this as its the flavour of the quarter

Prashanth Rai

Tag(s):SAPPHIRE06, SAP