The resignation of Leo Apotheker as CEO of SAP has sparked significant speculation re: the issues which drove this decision and where SAP will go from here.

The significance of this event was clearly underlined by the role SAP’s Co-Founder and Chairman of the Supervisory Board, Hasso Plattner, played as the primary company spokesperson during a corporate conference call this morning.

During the call, Plattner made an emotional defense of the company’s strategies and tactics in response to rising criticism in the face of SAP’s financial struggles. Plattner used the occasion to dispute claims that SAP isn’t moving fast enough to respond to changes in the market by proclaiming that SAP is well on its way to becoming a “multiple product company”. He gave Apotheker credit for “turning around” BusinessByDesign and said the rollout of the v2.5 of the on-demand solution is “close”.

The reality is that BusinessByDesign has only … Read More »

As the new year and decade get underway, here are a few of the areas of the cloud computing market which I think will be important competitive battlefields for established and emerging players:

Collaboration Wars: Collaboration is the ‘killer app’ in the Software-as-a-Service (SaaS) segment of the cloud computing market. The rapid adoption of Google Apps has demonstrated the latent demand for these web-based solutions. Now, IBM is promoting the enterprise-class qualities of its LotusLive offering to win a share of the market. Cisco Systems is also intensifying its efforts to promote its collaboration solutions built around WebEx and Telepresence. I also think Microsoft will accept a greater level of cannibalization of its Office products to win a bigger share of the collaboration market with OfficeLive.
Business-Oriented Social Networks: These are closely linked to collaboration and have gained a tremendous amount of attention because of the explosive growth … Read More »

In the ongoing tug-of-war between on-premise and on-demand vendors, much was made of Steve Lucas’ jump from the SaaS unit of SAP’s Business Objects to Salesforce.com to lead its new Force.com Platform-as-a-Service (PaaS) initiative a little over a year ago.

With far less fanfare, Lucas returned to SAP last month as its new SVP of Business User Sales for North America. Since Steve is a friend, and SAP and Salesforce.com are also clients, I won’t share any confidential information or insight. However, his move does raise a series of interesting questions about Salesforce.com’s Force.com initiative and SAP’s plans.

Given Salesforce.com’s rapid growth despite the macro-economic slowdown and the major push the company is giving Force.com, it is surprising to see Steve return to SAP which is still struggling to define its Software-as-a-Service (SaaS)/cloud computing strategies and solutions.

While SAP’s struggles have been well documented, … Read More »

Making the transition to a Software-as-a-Service (SaaS) model isn’t easy for incumbent software vendors (ISVs).

Rearchitecting their applications may be the easiest task in the transformation process. Redesigning their go-to-market strategies and ongoing operations; restructuring their revenue recognition models; and reorienting their staff are the more difficult challenges.

Greater service delivery costs combined with lower per unit prices make it is easy to see why most ISVs have tried to resist the SaaS movement and denied its long-term viability.

Yet, a severe slowdown in traditional, packaged, ‘legacy’ application sales has made it imperative for ISVs of all sizes across every segment of the software industry to finally accept SaaS as a reality they can no longer ignore and must finally embrace.

Even Microsoft, Oracle or SAP are promising ‘cloud’ solutions and cranking up their PR machines to promote their promises. But, their SaaS offerings are still primarily hosted versions … Read More »

I moderated a panel at OpSource’s SaaS Summit this week entitled “Selling SaaS to the Enterprise” which included representatives from Cast Iron Systems, Oracle and the Business Objects unit of SAP, as well as the Manager of Global Operations Business Technology at Pfizer.

They all agreed that SaaS and cloud computing are making serious inroads into the enterprise but still face significant challenges, including scalability, security and flexibility issues.

In response to the flexibility topic, there was general consensus among the panelists that customers want a choice of on-premise and on-demand alternatives to serve various corporate requirements.

Although I’m very proud to have correctly predicted many of the major trends which have shaped the SaaS market evolution, I’ve never believed that the world would move entirely to an all on-demand environment for a variety of customer and vendor-driven reasons. Therefore, I’ve always expected … Read More »

Salesforce.com unveiled its year-end 2008 financial results earlier this week and, as the company had predicted, it passed the billion dollar mark, reporting total revenues of $1.077 billion, an increase of 44%over the 2007.

This milestone event, combined with the company’s rising earnings per share growth, are clear indications of the overall strength of the Software-as-a-Service (SaaS) market despite the challenges of today’s tough economy.

In fact, Marc Benioff, the company’s Chairman and CEO, is quoted in the company’s press release as saying, “At a time when capital is precious, big-ticket software purchases just don’t make sense.”

I am also a firm believer that Salesforce.com’s continued growth, and that of the overall SaaS industry, will be fueled by today’s economic crisis.  IT and business decision-makers are increasingly recognizing not only the economic advantages of SaaS, but also the fact that SaaS represents a more effective method of supporting a more dispersed workforce and leveraging the latest innovations in … Read More »

Among my predictions for 2009, was that the on-demand services industry will experience a shakeout and consolidation.

I also suggested in a recent post that platform and cloud computing companies which don’t offer a combination of solid enabling technologies plus attractive channels to customers won’t survive the shakeout.

Sure enough, the rumors about the demise of Coghead have come true, and it is among the early entrants to the platform/cloud computing market who are now making an equally early departure.

Coghead may have had terrific technological capabilities, but it lacked a sufficient revenue model to stay afloat in an increasingly competitive market. As a result, investors were unwilling to continue to fund the company and it had to discontinue operations.

The primary reason Coghead couldn’t generate sufficient revenue to stay alive was that it didn’t offer enough value to attract adequate customers. It was a classic ‘Catch 22’ … Read More »

In an InformationWeek interview on Tuesday, SAP’s CEO and president of global field operations, Bill McDermott, downplayed the platform capabilities and enterprise-readiness of Software-as-a-Service (SaaS) and cloud computing.

Although Salesforce.com’s outage this week gave McDermott’s comments some immediate validation, they were still reminiscent of the views of a previous generation of tech industry executives who discounted the value of PCs in the corporate world. As a result of the myopic ideas of those former tech titans, companies like Digital Equipment Corporation and Wang Computers no longer exist.

Denial didn’t work out well for them and it won’t work for SAP either.

Executives at SAP aren’t alone in their efforts to downplay SaaS. The CEO of Lawson Software made even more atrocious comments a few months ago, as did Oracle’s CRM head at November’s SIIA On-Demand conference.

Of course, much of their ridicule is aimed at fending off the competitive threat which the SaaS/cloud … Read More »