The Software-as-a-Service (SaaS) movement is rapidly becoming mainstream as organizations of all sizes adopt on-demand services to address various unmet needs or to replace their legacy applications.

The rising acceptance and adoption of SaaS represents a watershed opportunity for new and established independent software vendors (ISVs). But, THINKstrategies has discovered that it is also creating serious challenges for some SaaS companies who are letting escalating competition pressure them into compromising on the fundamental principles of the SaaS delivery model.

Today’s SaaS challenges do not involve the past concerns about the reliability, security or scalability of on-demand solutions. Despite occasional service disruptions, SaaS vendors have proven to be far more reliable than most internal IT departments. They have also been able to avoid security problems which continue to plague enterprises relying on traditional on-premise software. The scalability of on-demand applications has also … Read More »

This past week’s SaaScon gathering in Santa Clara, CA, gave the rapidly growing SaaS industry another opportunity to take stock of its current state and where it is headed.

I was very pleased to serve as the event’s Master of Ceremonies and a member of the Advisory Board—along with Amy Wohl and Phil Wainwright—that helped to shape the conference agenda and recruit the speakers.

The event drew well over twice the number of attendees and sponsors of our inaugural conference last September. And, this was despite facing competition from the SIIA’s Software Strategy Summit and the Web 2.0 conference taking place in San Francisco.

SaaScon gave a wide array of companies—large and small, new and ‘old’—an opportunity to present and learn about the opportunities and challenges surrounding ‘on-demand’ services. The mix of formal sessions and informal networking gave everyone plenty to digest. It … Read More »

Microsoft today unveiled a new SaaS Incubation Center Program to help independent software vendors (ISVs) adopt the Software as a Service (SaaS) delivery model. Microsoft’s new program will provide ISVs with business and technical consulting services, a hosting channel to market, and incentive discounts to Microsoft’s enabling technology.

Not long ago, the incubator idea seemed to be a distant memory associated with the demise of the dot.com era. But, with the advent of a new surge of Web 2.0 opportunities, the incubator concept has also been reborn.

Microsoft isn’t the first to launch an incubation program in the SaaS space. OpSource, Salesforce.com, and others have created their own programs. What sets Microsoft’s program apart from the others is how it is attempting to link ISVs with hosting companies as a channel to market.

For the ISVs, this will give them a wider assortment … Read More »

Salesforce.com today announced its latest acquisition and newest extension to its Apex platform and on-demand service capabilities aimed at applying Web 2.0 tools and best practices to the age-old issue of knowledge management in corporate environments.

This represents a bold move which will not only expand the population of end-users who can benefit from Salesforce.com’s solutions, but will also raise some new questions for its partners who are trying to determine how to successfully dance with the Software-as-a-Service (SaaS) industry’s 800 pound gorilla.

Today’s announcement unveiled Salesforce.com Apex Content and Salesforce ContentExchange which are intended to help organizations better manage their documents and unstructured data within their existing Salesforce CRM applications.

Salesforce.com is promising that Apex Content will be offer a content management platform for unstructured data sources such as office documents, HTML, video/audio files and email. It will also enable developers to … Read More »

SAP announced today that Shai Agassi, president of its product and technology group and architect of SAP’s Netweaver software, is leaving the company to pursue his interests in alternative energy and climate change.

While these are honorable reasons to move on, it is very likely that his departure was also prompted by the overwhelming challenges associated with migrating SAP’s software to an on-demand, Software-as-a-Service (SaaS) model, as well as some executive suite politics.

In addition to his broader responsibilities, Agassi was the chief architect and senior champion for SAP’s on-demand efforts which were launched in February, 2006. He joined the company in 2001, when SAP acquired his company TopTier Software. He was also among several SAP executives considered a potential successor to Chief Executive Henning Kagermann, who recently had his employment contract extended through 2009, creating a bottleneck among his lieutenants, including … Read More »

With the recent acquisition of WebEx by Cisco Systems, speculation has been rising that Salesforce.com may be the next major Software-as-a-Service (SaaS) company to be bought. You can tell folks that you heard it from me first that the purchase will be made by Oracle within the next 18 months.

No, I don’t have any inside information. But, I can read the tea leafs and they tell me that Salesforce.com is too attractive for an even bigger player not to buy it. The software services company has over 650,000 subscribers and added 90,000 new subscribers during the most recent fiscal quarter ending in January 31.

While profits have slipped due to the company’s investments in new offerings and service infrastructure, the outlook for Salesforce.com’s services has never been better. Not only is customer receptivity growing rapidly, but Salesforce.com’s ability to penetrate new … Read More »

While Salesforce.com and its Founder/CEO/Chairman, Mark Benioff, get most of the attention and credit for setting the standard for the Software-as-a-Service (SaaS) movement, OpSource and its Founder/CEO, Treb Ryan, have done more than their share to evangelize the business benefits of SaaS and educate the software industry about the steps to success in this market.

Treb saw the opportunity to differentiate OpSource from the floundering hosting business by focusing on a nascent SaaS marketplace early. The company asserted itself as the “SaaS Experts” by establishing a professional services arm which helped aspiring on-demand companies understand the business of SaaS. It also initiated an aggressive marketing campaign in 2005-2006 which included an incubation program, countless webinars and the SaaS industry’s first conference, the SaaS Summit.

The company used the occasion of its second annual SaaS Summit in Monterey, CA, this week to unveil … Read More »

Cisco was very clear about the primary reasons it decided to acquire WebEx this week,

Add a new layer of web-based applications to its infrastructure-oriented product portfolio
Add a new subscription service business to its product-dependent revenue model
Gain access to 2.2 million registered end-users as well as additional corporate customers

The announcement immediately placed Cisco in the middle of the Software-as-a-Service (SaaS) movement, expanded the scope of the SaaS movement into the communications and messaging sector, and created an intriguing new area of competition between Cisco and Microsoft.

The announcement also gave SaaS greater credibility as a viable alternative to traditional shrink-wrapped products and an increasingly attractive business model for future success.

However, there is another dimension of the acquisition which hasn’t been mentioned in the many trade publication and industry analyst commentaries.

One of WebEx’s strongest solution areas is remote support services. Its … Read More »

Among the reasons why many organizations are still hesitant to adopt Software-as-a-Service (SaaS) is the concern that it will be difficult to integrate their existing data sources into their new, on-demand software services.

While this may be a real challenge for some large enterprises that must contend with a plethora of custom applications, it is becoming less of a issue for other companies with relatively common applications and database structures, as a result of rapidly evolving SaaS solutions.

The latest innovation in the integration arena was unveiled by Informatica last week when the company announced its new On Demand Data Replicator, the first multi-tenant, cross-enterprise data integration on-demand service.

The On Demand Data Replicator enables organizations to quickly and easily replicate SaaS-related data to their on-premise transactional and master databases. The service is initially aimed at organizations relying on Salesforce.com and third-parties tied … Read More »

While much of the information technology (IT) industry and many CIOs, concerned about their traditional legacy business intelligence (BI) applications, were focused on the market implications of Oracle’s acquisition of Hyperion Software, new entries into the market may represent a more important milestone in the evolution of this segment of the software industry.

On March 6, 2007, LucidERA unveiled its new Software-as-a-Service (SaaS) business intelligence solution. The company is founded by one of the truly good guys of the industry, Ken Rudin, who also has a unique perspective on the opportunities and challenges represented by the SaaS model.

Ken started his career at Oracle. He then co-founded and was CEO of Emergent Corporation, a consulting firm focused on data warehousing projects for Fortune 500 companies which was sold to Keane, Inc. in 1999. At that point, Ken joined a new company, called … Read More »