Analysing the differences between saas and on-premise

by admin on May 26, 2007

in General

I’ve never found it particularly easy to provide an all round analytical justification for saas. That’s largely because I’ve tended to respond to some of the gibberish that gets written rather than sit back and think it all through as a coherent whole. Today I have a slam dunk riposte. Written by my close colleague and all around good guy Jason Wood, the piece is entitled Josh Greenbaum’s Misbegotten Prognostications. It is a modern debating classic I  will not pretend to emulate. Way too smart for me. It is a long but near complete analysis that will appeal to a professional audience assessing alternatives to incumbent offerings. In correspondence around the topic, Chris Selland, a distinguished CRM executive, former analyst and colleague describes Jason’s piece as:

Without question – one of the best blog posts (perhaps THE best) I have read in a long, long time. Outstanding work.

That’s a terrific endorsement and one with which I wholly concur.

The back story to Jason’s post is not important in this context though you can catch it all if you choose to read the entire post. It’s a masterclass in evisceration of what is unquestionably a contentious series of assertions by another long time associate, Josh Greenbaum. I should declare that when I read Josh’s post, I thought it was excessive. For balance, both posts should be read in full.

What matters for my purpose is how Jason explains the way in which financial markets are rewarding the success of salesforce.com, the poster child for business applications delivered using the saas/on-demand model. The key point is that for both the buyer of services and the markets that assess the supplier’s performance, the saas model provides an unparalleled level of transparency while delivering clear opportunities to optimise IT spend. The on-premise model does not provide the same opportunity. It is a comfort factor potential buyers need know.

At the same time, Jason points out how in a SaaS world, buyers have a clear line of sight into what they are buying and are not forced into buying technology they don’t need. Instead, they can concentrate on solving the business problem at hand. In today’s world, that is crucially important.

One point Jason does not make – but again he is taking an investment perspective – SFdC uses technologies and methods that allow the company to come to market with fresh offerings at a fraction of the price a traditional vendor would expect to charge. That obviates the need to be concerned about pre-paying for future features through maintenance contract arrangements.

While Jason’s comparison is with both Oracle and SAP, the same applies to most, if not all incumbent vendors.

As a final remark – this is the kind of debate I like and am pleased I get the opportunity to engage in the cut and thrust. As we say in our GoogleGroup: We’re not always nice, we don’t always agree, but we guarantee you’ll go away smarter than when you came. True today.

UPDATE: The debate has moved on with Josh firing back a considered response which Jason duly acknowledges, explaining the value of the group to which we all belong. Now it’s hit techmeme.

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