Is the death blow to traditional enterprise software coming?
I believe it is. What I refer to as SaaS 2.0 will be the “dagger in the heart” of the traditional enterprise software model. The first incarnation of SaaS, which was popularized by SalesForce.com, created a totally new value proposition for enterprises. It was a “knife in the stomach” of traditional enterprise software as it triggered a much slower growth rate in big, fat enterprise software sales. SaaS is just a much more efficient model for both the customer and vendor.
I believe what I call SaaS 2.0 will change the enterprise software model forever. Software vendors will take the entire risk of deploying major SaaS based software offerings – before the customer has to commit any monies. The SaaS 2.0 vendors will have to prove the value of their offerings in a production environment – not just some trivial demonstration.
When you think about it – enterprise software vendors have been getting away with the business equivalent of murder. If you think this is an exaggeration – how about getting away with fraud? There have been billions of dollars and millions of man years wasted on failed enterprise software projects. Consumers do not buy any kind of other products (homes, cars, buildings, airplanes, etc.) under such a crazy business model.
CIO’s are justifiably sick and tired of an enterprise software model which is ludicrous. CIO’s also hate enterprise software offerings which are only useful to a very small user community. SaaS vendors have already addressed this issue.
How could a vendor offer such a riskless value proposition? The SaaS vendor must have a very strong balance sheet (to fund initial deployments), shorter more efficient deployment cycles, and more importantly have an offering which they know works!
Look out for SaaS 2.0 – it is coming!Google+