SuccessFactors announced yesterday that Siemens AG has agreed to adopt its Software-as-a-Service (SaaS) based, on-demand performance and talent management solutions across its worldwide operations of approximately 420,000 users across 80 countries in 20 different languages.

This is the latest indication of the rapid adoption of SaaS-based solutions by companies of all sizes across nearly every industry and geography.

Specifically, this announcement is significant because,

1. It clearly illustrates that SaaS is well-suited for global enterprises, and further dispels the myth that it is just for small- and mid-size businesses (SMBs) that can’t afford the luxury of traditional, on-premise enterprise applications.
2. It also shows that European companies are becoming more comfortable adopting SaaS solutions despite past concerns about off-site and/or out-of-country hosting of corporate data.
3. It demonstrates the declining power of incumbent vendors within customer accounts, as SuccessFactors outmaneuvered SAP which already had its software installed at Siemens and shares the same country of origin.

Siemens contributed the following quotes from two senior level executives to SuccessFactors’ announcement reinforcing the significance of the importance which they give this selection,

• “We conducted an in-depth market evaluation of 30 leading vendors and seven system providers Siemens already had over five months, with our end-users stress testing the software quality, global scalability, and innovation potential. “
• “SuccessFactors will be instrumental in helping us achieve [our] core objectives by closing the gap between strategy and execution. It will also enable us to globalize onto a single platform…” 
• “The Enterprise Cloud Computing business model is a strategic direction for us. It not only lowers IT costs, and creates faster end to end processes, but can also grow with our requirements both globally and locally.”

Global 2000 companies, like Siemens AG, don’t have to publicize their vendor/solution selections, and certainly don’t have to contribute quotes to vendor press releases that are this emphatic.  Nonetheless, we saw GE make a similar move when they encouraged Aravo Solutions to publicize the deployment of their SaaS-based supplier information network within GE to catalogue and coordinate over 500,000 third-party suppliers.

Siemens’ decision to provide this type of quote not only illustrates the level of importance which they give this selection, but also shows how moving toward a SaaS and cloud computing approach is becoming viewed by senior executives as a corporate strategy which can win them additional points in the overall marketplace.

Aravo Solutions cloud computing GE SaaS Siemens AG Software-as-a-Service SuccessFactors