SaaS in the Era of Spot Applications

I was reading an article today that suggested that, while growth in the SaaS industry has been prolific in the past twelve months, the uptake of SaaS-based, ERP solutions has been slow by comparison. Concern over sacrificing the “crown jewels” or something to that effect.

Of course businesses are not identical in terms of their wants or needs and there is a wide range of alternative solutions to choose from. But wouldn’t most small to mid-sized companies be far better served by focusing on obtaining a broader set of enterprise capabilities, including E-commerce, CRM and ERP as part of a single integrated offering as opposed to spot applications that are singularly limited to each of these business functions?

Businesses are organized vertically by department and the heads of these departments quite naturally view systems, processes and opportunities for automation in terms of the improvement they stand to gain through this form of a direct improvement.

But customers don’t care about these direct improvements because for the most part they don’t see the benefit. They view business precision as having much more to do with an end-to-end capability to service their needs. Servicing the customer from that vantage point requires a tight integration amongst the core systems and processes.

Single purpose, one-off, spot applications, or whatever you call them, simply cannot deliver that form of tight integration without a considerable amount of development effort and cost, not to mention the ongoing maintenance.

It’s the sum of the parts, as opposed to the individual components, that will matter the most in the end. SaaS products featuring a complete set of integrated enterprise level capabilities will almost certainly begin to have a more profound impact on the small to mid-sized business in search of solutions in 2008 and beyond.

Thanks for reading.


Dave Rice, TrueCloud CEO


http://www.truecloud.com.

Is IT having another conversation with itself over SaaS?

Having spent several months now deep-diving the Cloud Computing/SaaS phenomenon, it occurs to me that the community of publishers and partners out there haven’t been terribly effective in connecting the dots for small to mid-sized businesses, especially if the target audience is the owner-operator (as it should be) as opposed to the IT champion.


I’ve spoken to quite a few of the smaller business leaders in the greater Phoenix area and practically all of them, if they’ve heard about SaaS at all, have managed to confuse it with being just another hosting gig or a Co-Lo. You really have to stop and explain a little bit about the properties of multi-tenancy and true SaaS before there is recognition that this is something quite different.


Interestingly enough, once these owner-operator types begin to understand the value proposition, they get very excited about these changes. This makes me think that once again the IT industry is making the same old mistake of communicating amongst themselves as opposed to speaking to the audience that stands to gain the most from this landmark shift in computing alternatives.


For those who have experienced SaaS, there seems to be this perception that the only services available come in the form of spot applications that have to be integrated somehow with the remainder of on-premises applications. The other misconception is that SaaS products aren’t applicable unless a business can be adapted to a “cookie cutter” outcome, meaning no ability to customize. I might attribute some of that to the underselling of SaaS by elements of the IT community.


From my perspective, the most attractive characteristic of the SaaS breakthrough is the presence of multiple integrated applications, or in short, the ERP capability made available through this service.


Today a very small firm with revenue upwards of $10M can take advantage of a fully integrated application suite, including e-Commerce, CRM, and ERP capabilities, save money doing it, and prevent the IT train of future costs associated with on-premises solutions from ever leaving the station.


We’re not doing a very good job of telling the story, I’m afraid, to the people that need to be hearing it.


Thanks for reading.


Dave Rice, TrueCloud CEO


http://www.truecloud.com.