News & Views

April 2011 from Oracle – “Organizations face a number of challenges when moving their HR applications into the cloud. Companies seeking solutions like talent management and compensation must ensure that Software-as-a-Service (SaaS) offerings in these areas can integrate seamlessly and cost-effectively with their existing infrastructures, and provide a unified view into employee data and the workforce lifecycle. Global employers require cloud solutions that not only support compliance with employee and data privacy regulations in foreign countries, but also deliver multicurrency functionality for processes such as performance and compensation management. And cost-conscious organizations everywhere need to thoroughly evaluate the total cost of owning a SaaS solution versus a hosted or on-premise application, to determine what deployment models will reduce costs and risks not just one year from now, but throughout the entire application lifecycle…”

180 View – The article is clearly biased as Oracle is pushing its own Oracle Fusion Human Capital Management system. But the article also contains some good definition of terms and discusses what Oracle considers myths and reality. For example – “One of the most controversial policies with a SaaS-only model is the forced upgrade policy. Niche SaaS providers tout their ability to deliver frequent ―vendor-managed upgrades that deliver innovation. In reality, forcing customers to upgrade to the next version of the application on the vendor’s time frame can have negative downstream effects, resulting in additional costs and complexity.”

May 10, 2011 from CloudTimes – “At Convergence 2011 in Atlanta on April 11th, Microsoft  announced the upcoming launch of the Dynamic ERP solutions in the cloud. Windows Azure Cloud platform is going to host Microsoft Dynamics AX, GP, NAV and SL ERP Solutions. According to Kirill Tatarinov, Vice President for Microsoft Business solutions said in this context that applications will support multi-latency…

At Convergence 2011 in Atlanta on April 11th, Microsoft (NASDAQ:MSFT) announced the upcoming launch of the Dynamic ERP solutions in the cloud. Windows Azure Cloud platform is going to host Microsoft Dynamics AX, GP, NAV and SL ERP Solutions. According to Kirill Tatarinov, Vice President for Microsoft Business solutions said in this context that applications will support multi-latency.

At last Microsoft made its move towards the ERP market through a SaaS Cloud delivery. This is going to be a major shift for Microsoft and its entry into the Dynamic ERP Products market at SMB and mid-market segments. The successor of Dynamic NAV is planned as the first Dynamic ERP product for SaaS cloud delivery and scheduled for 2012…”

180 View – Although other vendors have a big head start in the clouds, Microsoft will still have a huge market as most organizations are still grounded in their own premises. As well, any doubts about the cloud’s future should be blown away.

May 1, 2011 from Accounting Today – “…Of all the news at Microsoft Dynamics’ recent Convergence conference, it was, not surprisingly, its proposed cloud strategy that drew the most attention. Yet many questions remain as to exactly how the company plans to bring its products and partners with it to the cloud.

As more than 9,000 users and resellers convened here for the annual confab, keynote addresses by Microsoft chief executive Steve Ballmer and corporate vice president of Microsoft Business Solutions Kirill Tatarinov offered little in the way of specifics on the company’s plan to bring its Dynamics products to the cloud…”

180 View – The article also includes “In a meeting with the press and analysts, Microsoft executives gave a brief preview of its Dynamics cloud strategy, as Tatarinov confirmed that the company is planning every future major ERP product release to be Software-as-a-Service, beginning with Dynamics NAV in 2012.” Now that is big news but it’s not clear how Microsoft will be able to pull this off as SaaS products are typically browser-based and use a multi-tenant architecture (one instance of the software being used by multiple organizations).

May 18, 2011 from Forbes – “I wanted to share news of an announcement this morning at SAPPHIRE NOW, SAP’s business and technology conference being held in Orlando, Florida this week. The announcement states that SAP and Microsoft will work together on making application development and cloud management easier for developers and IT staff, helping customers harness the power of cloud computing. Additionally Microsoft was named the SAP Global Technology Partner of the Year…”

180 View – If you don’t understand what’s happening, don’t feel so bad as we don’t either.

April 7, 2011 from TEC – “…Those who prefer on-premises solutions typically like to control the upgrade process, are concerned about security, and are uneasy about outsourcing some processes and functions that are mission-critical. These companies also like the ability to customize locally. Therefore, Sage’s Online Business Solutions strategy retains a three-tier character: 

1. Pure cloud computing for the smallest enterprises, and the most cost conscious new startup businesses
2. A hybrid (on-premises and on-demand) approach for the broad middle
3. Rejuvenated traditional on-premises products for established conservative businesses that want continuity and few surprises…”

180 View – The article discusses Sage ERP Accpac’s single-tenant cloud edition. One of the characteristic of SaaS is multi-tenant architecture where one instance of the software can be used by multiple customers. Multi-tenant architecture should lead to lower prices for customers as there is less infrastructure and need for support by the vendor. However single-tenant architecture could provide for more customization for a particular customer.

February 23, 2011 from Forbes – “Oracle cofounder and Chief Executive Larry Ellison has long desired to undo Microsoft and become, as he has put it, the “number one” software company in the world. He’s not there yet, despite having spent some $40 billion to buy up 75 hardware and software companies over the years. Microsoft claims a market capitalization of $226 billion compared with Oracle’s $169 billion.

Yet recently one of his lesser-known investments is starting to take nips out of Microsoft, SAP and, oddly enough, even his own Oracle…

NetSuite has found itself fashionable. Last year its revenues totaled $193 million, up 16% with operating losses of $25.6 million. Its stock has jumped 248% in the last two years (see table, “Too Fast, Too Furious”). Ellison’s 50.5% stake, worth $930 million, is no longer a mere rounding error in his $27 billion net worth.”

180 View – NetSuite has led the way in offering ERP by SaaS. However, they will face tougher competition as the major vendors try to catch up.

October 13, 2010 from The Enterprise System Spectator – “As we all know, software-as-a-service (SaaS) has been one of the bright spots in the enterprise systems marketplace these days. The advantages are becoming more widely recognized: lower total cost, faster time-to-benefit, little to no capital expenditure, and less pain in system upgrades…”

180 View – The article talks about the success of SaaS in CRM and HR and that it’s making inroads with ERP. A number of ERP products are mentioned – Plex, NetSuite, SAP Business ByDesign, WorkDay, Syteline and Epicor Express. The article suggests that SaaS functionality is catching up to the traditional on-premise products.

March 12, 2010 from Gartner – “Adoption of software-as-a-service core financial management applications by midsize organizations is growing. Evaluation teams should understand how other midsize companies have overcome the perceived objections to SaaS financial applications and should not discount this option…”

180 View – NetSuite has provided this complementary Gartner report for good reason as it adds more credibility to SaaS. However, I don’t think NetSuite would agree with everything in the report including “SaaS financial management applications are best suited at this time for midsize organizations with simple integration requirements that find the functionality meets their needs without customization.” NetSuite would say that they have many forms of customization available to their clients, which is true. However if you need customization that involves changing the source code, then NetSuite will not be appropriate.

April 21, 2010 from destination CRM – “In the nine years since its founding, NetSuite, a provider of business management software suites hosted in the cloud, has witnessed firsthand — and benefitted from — the software industry’s affair with cloud computing. In the early 2000s, pundits squabbled over the technology’s promise, whether enterprises would choose to access their information via a browser instead of through desktop software, if data was truly secure, and, lastly, if it was possible for businesses to make money with software-as-a-service (SaaS).

“Every myth that popped up was soon knocked down,” said NetSuite Chief Executive Officer Zach Nelson, at the company’s annual SuiteCloud partner conference here last week.

These days, however, an emerging new wave of cloud computing has brought with it a new wave of myths.” The myths are:

1. Complex processes don’t run in the cloud
2. Customization is the Achilles’ heel of cloud applications
3. Channels don’t exist for cloud applications”

180 View – I agree with one qualification and that is SaaS customizations are possible only outside of source code. Other SaaS concerns are:

• There is “the risk that data may be disclosed to the government of the jurisdiction in which their data is held by the vendor, possibly without their knowledge or consent. For example, the USA PATRIOT Act permits the U.S. federal government to seek a court order for disclosure of electronic records, often without permitting notice to the user.” For more, see “Canada: Peering Through The Cloud – Cloud Computing: Many Benefits But There Are Some Legal Issues To Consider” published January 26, 2010 (http://www.mondaq.com/canada/article.asp?articleid=92818)
• You may not find all the functionality you need as SaaS is relatively new compared to the more mature products available on a license basis.
• You need to consider SaaS costs over a long period of time to do a proper Total Cost of Ownership.
• SaaS is not as compelling for those organizations that already have IT resources and infrastructure in place for other applications.

March 31, 2010 from The Enterprise System Spectator – “…The overhead and expense, even with Lawson’s new offering on Amazon’s cloud, will be far above what SaaS providers experience. True multi-tenant SaaS providers, such as Salesforce.com and NetSuite, make changes once, and the entire customer base experiences them instantly. This is especially a benefit to users of HRM and financial management systems (two of Lawson’s horizontal sweet spots), where regulatory changes are not optional…”

 180 View – There are really 3 different delivery models for software:

1. On Premise (Software is installed and run on customer’s hardware)
2. On Demand or SaaS (Customer accesses a single instance of the software over the web that allows multiple customers to coexist by a multi-tenant architecture)
3. Hosted (Software is accessed on demand, but lacking a multi-tenant architecture and requires separate servers and installs for each customer)

The author of the article believes that SasS is the future and Lawson better adapt it or it will be eaten by competitors such as Workday and Intacct. I think that there is a place for all 3 models. Hosted makes more sense than SaaS for organizations that don’t want their system updated with everyone else.

April 21, 2010 from Datamation – “I’ve been talking about the benefits of Software-as-a-Service (SaaS) for so long it always amazes me when I have to go back to basics to help the uninitiated understand the fundamental benefits of today’s online, on-demand software solutions.  So, here’s my quick list of the top ten reasons why business and IT decision-makers should start taking advantage of today’s leading SaaS solutions…”

180 View – Although the author is clearly biased towards SaaS, he does make good points.

March 4, 2010 from TechCrunch– “Earlier today, Microsoft CEO Steve Ballmer gave a speech at the University of Washington where he said that the company was going “all in” with its strategy to move Microsoft products to the cloud…”

180 View – This is a big change in direction for Microsoft and just as it takes an ocean liner time to change direction, so will it take time for Microsoft to move to the cloud or SaaS.

February 22, 2010 from Computerworld -  “Once the final tallies for 2009 are in, analyst firm Gartner Inc. expects SaaS revenue to total $7.5 billion, nearly 18% higher than it was in 2008. Gartner projects that by 2013, SaaS spending will hit $14 billion. And in an exclusive Computerworld survey of 127 IT professionals, 42% of the respondents reported using SaaS in their organizations, for everything from CRM (40%) to HR (38%), e-mail (36%) and payroll (32%).

Relatively low start-up and implementation costs are no doubt driving SaaS adoption well beyond CRM services, but there’s more to it than that, users say. Just as important is that they typically get greater software functionality and more upgrades from SaaS vendors than they could ever manage with on-premises applications…

“With SaaS, you’ve basically got to adapt to the SaaS process. It’s a way to standardize, although there still tends to be a certain amount of debate about the processes we use.”

But like other users, Proudfoot says the primary benefit of SaaS is speed. “We were up and running within days of having the software available,” he says. “Following implementation, there’s nothing to do other than pay your subscription, log on and use it. But, of course, use does require adaptation of internal processes.”

180 View – The article starts with “Businesses are taking the plunge into budget-friendly software-as-a-service offerings for everything from recruitment to central ERP.” But there was very little in the way of ERP actually discussed in this article. It’s definitely not mainstream for ERP yet although it’s headed in that direction for the same reasons it has done so well with CRM.

The article does imply that there is less flexibility in business processes with SaaS, but that may be more a function of a particular product rather than SaaS itself. There are SaaS products that offer many levels of customization from simply renaming particular fields on a screen to developing completely customized screens with built in workflow logic based on specific events.

February 2010 from Joel Martin’s blog – “…In the customer’s eyes, the ‘hero vendors’ will offer a choice of how to deploy, support and integrate a mixed ERP environment that grows (and contracts) with the needs of the business. Successful ERP SaaS solutions will allow customers and their partners to invest in standards based technologies to amplify the usage of the commodity components (e.g. extending financial data to line of business professionals) in a format that ‘makes sense’ to their users. At the same time, more complex ERP SaaS solutions will be deployed to meet the needs of select requirements (e.g. discrete operations modules for pharmaceuticals). These SaaS solutions will be sought after as both on-premises and via the cloud….”

180 View – We included this article because 1) We liked the title, 2) Joel is a good resource for anyone interested in enterprise software, 3) Joel makes some good points that SaaS does not need to be just standard/commoditized business process (the chicken) but can also be used for more complex/customized business process (the duck). We don’t think that Joel was referring to lame duck.