The excellent Ethan Zuckermann has a great rundown of the $100 laptop including a neat YouTube video. If you don’t know about this then this project is an attempt by some of the great and the good in Silicon Valley to develop a computer that will work well in the non-networked world of today. Basically – the poorest parts of the world where electricity is scarce and where communications are poor.
While this in itself is an excellent thing to do, it begs the question why technology innovators for the business world can’t rethink their business pricing as part of product design? Why is it that SMBs are taxed out of sight by the 800lb gorillas in the room like Microsoft, Sage, Dell and the telcos that provide your communications infrastructure. Why does software have to run at £2,000 a seat pa plus 20% annual maintenance plus whatever else you have to pour into the IT department, just to keep it going?
SaaS as an alternative technology model to on-premise is gaining currency and has now crept into a McKinsey report. The jungle law of business says: ‘If McKinsey says it, at least take notice.’ Like most evolving trends, there is a goodly degree of debate:
Nick Carr got off to a flying start, noting that McKinsey was about to report:
Large companies appear to be jumping en masse onto the software-as-a-service bandwagon, according to a new survey of CIOs by management consultants McKinsey & Company. The survey found that 61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year, a dramatic increase from the 38% who were planning to install SaaS apps in 2005.
SAPs Thomas Otter expresses his ‘confusion’ about the term SaaS
David Terrar focuses on the financial case and its impact in the larger organisation
Jason Wood looks at the economics, broadly agreeing with McKinsey but raising the odd alarm and wanting more market detail
Phil Wainewright offers some fascinating insights into where the market goes next.
Vinnie Mirchandani disagrees with analysts and proposes an alternative based on his observations as a cost negotiator and outsourcing specialist
Nick Carr whacks Thomas over the head with his idea of a clue stick:
Thomas Otter, a smart technology blogger who works for the corporate software giant SAP in Germany, finds himself baffled and befuddled these days. He can’t figure out what “software-as-a-service” means.
Nick then goes on to deliver an object lesson to Thomas. And now it’s my turn.
They’re all right. SaaS is a many faceted moniker in the middle of fast paced evolution. At present, it is the cost factor that’s usually being sold. Nick himself draws the cost distinction between Glovia‘s GSInnovate and the SAP equivalent. I don’t necessarily share Nick’s overall view because I am most closely aligned with Phil’s thinking. But before finding some suitable epithet with which to whack Nick (if there is indeed one with which to whack him) I am certainly willing to know more. My position:
It is the service provider who is innovating this model forward. So for example, Phil had earlier referenced Winweb, saying:
Whether it’s Intacct and National Bank of California speeding access to cash, Landslide enabling deal-closing processes or Winweb helping small businesses survive those crucial early years, all of these solutions focus on live business results that really matter to their customers. They’re not selling software, they’re focusing on what customers actually want to achieve.
I accept that pure play SaaS may NOT be the right solution for a specific customer. I can envisage plenty of situations where a combination of on-premise and SaaS applications will co-exist. At least for a while. Does co-existence break the SaaS conditions highlighted above? It depends on what else is going on. If the solution meets Phil’s solution criteria at an appropriate price point then I’m OK with that including on-premise.
As part of that solution, I want assurance I’ll have the ability to easily add on other services as the occasion arises. That is what allows the SaaS vendor to differentiate over time. This could be a very exciting model for the SMB market. the last year has already proven fascinating. Solutions I thought would cost £000′s are coming in for pennies today. The ability to do so much more is phenomenal. Almost my entire world is online (with appropriate security.) I am so much more effective than I was at this time last year. And I am a VSB.
The most important benefit is that I have struck up an entirely new body of contacts. These are quite separate though running in parallel with my ‘real world’ contacts. The only difference between the two is that the ‘real world’ people don’t have an online presence. But it is a world of a difference. It’s hard to explain all the benefits but the word that keeps coming back is ‘learning.’ All achieved using SaaS and open source solutions.
So I was intrigued by the gumph on GSInnovate. They say they’ve re-engineered their existing large company manufacturing solution (which includes financial management) to a full hosted solution that is a lot simpler to implement and use and which offers industry ‘best practice’ templates. Ergo – lower costs per month. At least for a mid-market company. And you have the knowledge that Fujitsu are behind it. So they’re not going belly up any time soon. Agreed?
But are they SaaS or SoSaaS or a screen scrape? I don’t know. There’s not a single case study or customer reference. Off at a complete tangent, why hasn’t Sage been prepared to take this approach? Like Thomas I am (momentarily) confused 
