Over the past couple of days I have seen web articles from several industry analysts that portray the changes that they believe are underway in the Enterprise software sector. The main premise is that the economy and the changes in technological offerings (mainly SAAS) mean that customers will be reviewing their software choices going forward with significant change in the way they operate.
I’d offer some views on this.
Firstly private sector vs public sector. Whilst both sectors have the same drivers, the risk appetite driven by different imperatives means a different outlook on things. Take for example the cloud – will private and public use the same cloud? Unlikely given the degree of information sensitivity. Will all parts of the private sector use the same cloud – unlikely with different availability, security and usage requirements.
Secondly – will every business process be the same in every organisation? Yes, where it is governed by regulation. No where it is deregulated or offers different value propositions depending on the way it is delivered.
Thirdly – current investments versus future costs. The case being positioned is that saas saves significant money. How does it do this? I have to pay a licence fee for not just the software but also the hardware (indirectly). Hmm…I do that today so it must just be the margin being worked on by this supplier is lower, or maybe I can now pay just on what I use rather than what I need? Oh and I need to retrain all my staff in the new buttons to press and the way in which you manage and report issues….and what do I do with the current investments and asset values on my balance sheet?
So where is this all heading? That is actually the big question! Will SAAS be the saviour of organisations? Will it replace the current vendors? The answer is yes and no, and I’m afraid that is the likely answer for all these initiatives because at the end of the day there is no single factor that can drive things in this marketplace. What is certain is that these saas changes will drive some change and that means more choice in the way things are done, and more choice generally means better value.
Now that is something that everyone wants.