Nice image building up: McKinsey and SandHill surveyed the software landscape (Enterprise software customer survey 2008, pdf) and find benefit in the SaaS-model. Nicholas Carr analyzes that Software’s new battle lines are becoming visible, citing from the report:
These trends – the growing acceptance of SaaS and SaaS platforms – are likely to create a tremendous battle between the largest software vendors and the newer SaaS providers. While each of these players has an advantage at one end of the spectrum (large vendors such as IBM, Oracle, SAP and Microsoft do best in large enterprises, while SaaS “incumbents” such as Salesforce, NetSuite and RightNow are more in favor with small businesses), the real battle is in the mid-market space. For SaaS platform startups, that means trying to get into a room where there are already two elephants vying for the customer’s attention. Success will mean locating a unique niche – and being prepared to have it invaded.
Huh? Hold it – I guess there are real battles in all market spaces (or what else is there going on between Oracle and SAP) but anyway this is basically core business model innovation stuff, demonstrating the need for agility and adaptivity to changed circumstances. I wonder if the big elephants can really move, the smaller SaaS-incumbents have proven this already and are adaptivity-encoded all the way. True for the Enterprise Social Software space as well. But yes, outmanouevring elephants while scaling up is dangerous business …
Yesterday evening I was catching up with some boomarked videos, here’s another one worth pointing out: Nick Carr “discussing the business implications of on-demand software with guys from Accenture, Deloitte, Business Objects and Bluewolf”:
The discussion revolves around on how IT is deployed and used, where Carr highlights that there is a shift going on (like the shift from local power plants to the electricity grid).
Important is the notion that technology change is only the beginning, and that SaaS and utility computing will inevitably change innoavtion and collaboration efforts – bridging and connectiong people, apps and data that were isolated before.
Interestingly, they are quickly venturing into discussing emergent and innovative collaborative practices (read social networking platforms, like i.e. Facebook or Xing) – basically they are exploring social software questions (did I mention that I do consulting work in this space?).
Mike Gotta thinks that Salesforce’s Koral move (Apex Content) puts them in competition with Cisco that recently acquired WebEx:
At some point, Salesforce needed to respond to the productivity, content and collaboration platform Cisco can exploit given WebEx WebOffice and WebEx Connect.
I would add that Salesforce clearly moves to take a stance against other collaboration and content management players like e.g. Microsofts Sharepoint or Google (as Nick Carr notes), while it validates the increasing importance of “as a service”-offerings. Hence, its position in the SaaS-landscape is a hybrid one: While offerings like Google Apps are competitors in some ways, they are good competitors because they strengthen the SaaS-model as a whole, heck – they might even collaborate in expanding this market, and they will stay friends quite some time.
Crossposted at frogpond because it touches enterprise 2.0 and collaboration issues …
Knowledge@Wharton:
New models of software pricing and distribution are becoming increasingly popular. [...] on the increase: “on-demand” software where customers rent software applications when they need them and pay only for what they use.
All of these models pose unique threats to Microsoft, [...] the two biggest competitive threats to Microsoft are open source software and advertising supported applications. “Right now, the emblem of the first one is Linux and the emblem of the second one is Google. But it’s not the companies, it’s the phenomena” that present the greatest challenge to Microsoft [...]
Take this into account when reading this interview with Steve Ballmer of Microsoft in the Financial Times, touching on a lot of business model innovation issues, that go well beyond strategic positioning and design, like when he characterizes the uncertainty of context and thinks about how to reach goals …
FT: To what extent, will the growth of software as a service affect the way you think about the new launch of the operating system? Will it have an impact on the amount of money you put in? The way that you go about those sorts of releases?
BALLMER: [...] We have services. The next question to ask, is OK: there are services for consumers, but what do services for business look like? There’s a lot coming from us in that direction. We just entered the CRM space. We’ve been churning releases. The amount of energy and excitement around that (I mentioned that after services because we also have a live version of it). Just a ton of stuff in this area.
und natürlich dies hier:
[Ballmer:] Let me talk about it in terms of competition. The biggest competitive challenges that any business faces is actually alternate business models. It is not a company. If you tell me somebody wants to come compete with us and do software in an area where we compete, or that we are going to get in a new area and it’s the same business model, it’s selling software, I know we can do it.
When somebody comes with a different business model, that’s where you get… or a phenomenon comes with a different business model.
What was the number one different business model that our company has confronted in the last six years? It’s Open Source. Open Source is not a technology phenomenon; it is a business model phenomenon. Frankly speaking, exactly what that business model is, is still unclear.
SaaS, Software as a Service, soll nach Gartner eine der Top-5 Technologien für 2005 werden, u.a. weil:
Geschäftshypothesen und -strategien der Softwareanbieter müssen sich ändern, damit sie überleben und bei der natürlichen IT-Auslese in den Jahren 2004 bis 2006 übrig bleiben. Viele frühere Erfolgsrezepte sind für die Zukunft nicht mehr geeignet.
Vor einigen Jahren gab es das schon mal, damals hieß das ASP (Application Service Providing), später bei der IBM auch on-demand computing … dennoch ein interessantes Konzept (das interessante und innovative Businessmodels eröffnet) das vielleicht doch noch den Durchbruch schafft.
