The consolidation of the legacy software market continued this past week with SAP’s announced plans to acquire Business Objects, followed by Oracle’s announcement that it intends to buy BEA Systems.

These transactions clearly indicate that the traditional, on-premise software market is undergoing fundamental changes. The most obvious driver of the latest announcements is the growing importance of business intelligence (BI) and analytics as a key ingredient in any meaningful enterprise application.

In an ideal world, these acquisitions would mean that customers no longer have to carry the burden of integrating these capabilities into their enterprise software environments. Instead, it would be logical to expect the business intelligence and analytics capabilities to become a ‘plug and play’ component of the SAP and Oracle’s software portfolios. However, it is more likely that these acquisitions will simply make their software solutions even more complex to … Read More »

Waiting for a delayed flight to Chicago from Vegas, as I try to make my way home to Boston, is an opportune time to recap a week of travels across the Software-as-a-Service (SaaS) and managed services landscape.

This past week began at Salesforce.com’s annual Dreamforce user conference. It was another lovefest that attracted a record crowd of over 7000 users, partners, press and analysts, up from fewer than 5000 a year ago. The 40% growth in total attendees was eclipsed by a tripling in the number of partners showcasing their on-demand capabilities, despite a big increase in the price for booth space.

The focal point of the event was Salesforce.com’s introduction of its new Platform-as-a-Service (PaaS), called force.com. The company also introduced a user interface on-demand solution (IaaS), visualforce.com. (Click here, to read THINKstrategies’ whitepaper regarding the new PaaS.)

These announcements are the … Read More »

A little over a year ago, I contributed a commentary to eWeek’s Channel Insider, entitled “On-Demand a Boon for the Channel”, that stated the Software-as-a-Service (SaaS) movement doesn’t have to be the death-kneel for channel organizations.

At that time, many resellers and integrators feared that SaaS would ‘dis-intermediate’ them because of its direct sales and simpler deployment characteristics. There is no question that these attributes will certainly disrupt the traditional business models of many resellers and integrators who capitalized on the complexities of the legacy applications in the past. However, there is still plenty of complexity in today’s enterprise-oriented SaaS solutions to give innovative resellers and integrators a new round of business opportunities to pursue.

Just as in the past, customization and integration remain challenges in the new world of enterprise SaaS solutions. A year ago, I discussed in the eWeek article … Read More »

Callidus Software Inc. announced todaythat it has been certified to offer its TrueComp® Suite on Salesforce.com’s AppExchange.This announcement isn’t likely to generate bold headlines in the business or industry trade press. But, I believe it is a significant bellweather for the software industry and good news for organizations who have been worried that they’d have to make an either/or decision when selecting on-demand versus on-premise software solutions.

Until recently, the rapid rise of Software-as-a-Service (SaaS) as a radical movement to displace legacy applications. As a consequence, SaaS was seen as a fundamental threat to the long-term viability of the independent, or as I prefer to say, “incumbent” software vendors (ISVs).

While on-demand, SaaS solutions represent a real challenge for legacy software vendors, it is no longer a simple battle of good (on-demand) versus evil (on-premise). Instead, both parties are recognizing that they … Read More »

Last week, NetSuite announced that it was finally ready to enter the public market with an Initial Public Offering (IPO), and this week two other Software-as-a-Service (SaaS) oriented players found a private exit via acquisitions.

The NetSuite acquisition had been highly anticipated and is another indication of the growing support of the SaaS model within the investment community. NetSuite’s S-1 shows that the company is experiencing strong growth while also reducing the proportion of its revenues being spent on software development, sales and marketing. Although NetSuite isn’t a rocket-ship like Salesforce.com, it has established a broad enough customer base and is gaining sufficient momentum to disprove any lingering misconceptions that SaaS can’t satisfy businesses’ back-office or financial management needs.

A successful IPO by NetSuite, combined with growing receptivity to IPOs in general within the investment community, will widen the door for other … Read More »

Last week, I had the opportunity to return to Dublin, Ireland, to participate in the second Software-as-a-Service (SaaS) Summit which I’ve helped Enterprise Ireland (EI), the country’s economic development agency, organize and moderate in the past nine months.

After a very successful launch of this symposium series in October with the first SaaS Summit, decided to host another round. The goal of our first session in the Fall was to educate Irish companies and entrepreneurs about the opportunities in the SaaS market. Our objective last week was to make them aware of the major challenges and offer steps to success, especially for those local companies seeking to penetrate the U.S. market.

In addition to identifying and recruiting each of the Summit speakers, I also had the privilege of kicking off the day with a keynote presentation summarizing the state of the SaaS … Read More »

Just like the frenzy and speculation that surrounds every high-profile couple before they tie the knot in today’s pop culture, the build up over the past few weeks around a pending announcement between Google and Salesforce.com was destined to fall short of many people’s overblown expectations.

Much of the speculation centered on whether Google would acquire Salesforce.com in an attempt to dramatically strengthen the search vendor’s foray into desktop and business applications. In March, I made my bet that Oracle would be the first suitor to try to capitalize on Salesforce.com’s meteoric rise in the on-demand business apps world.

Although I can certainly see the logic in a Google/Salesforce.com marriage, I thought it was premature for the companies to do this kind of deal at this stage. Unless, Oracle initiated a hostile takeover attempt for Salesforce.com, the on-demand vendor wasn’t incented to … Read More »

In its continuing effort to outpace its competition, Salesforce.com unveiled a new “SOA as a service” strategy today.

This is the company’s latest attempt to extend its footprint across the software landscape and increase its relevance to a wider population of users, developers and partners. This move also offers another clue for how established independent (read: incumbent) software vendors (ISVs) can better position themselves in the rapidly evolving Software-as-a-Service (SaaS) market.

(By coincidence, IBM kicked off its IMPACT 2007 user conference today by spotlighting its software and services aimed at the $160 billion SOA opportunity.)

Service-oriented architecture (SOA) has become a popular software development framework aimed at making applications more responsive to business requirements. Although the hype regarding the benefits and market acceptance of SOA far exceeds the reality, there is little debate that the proper implementation of SOA can generate meaningful returns … Read More »

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 »

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 »