The rumors of the potential demise of SaaS seem to be exaggerated. True, there is a glut of companies, and the current business model doesn’t seem to give space to consolidation of services and customers.
The traditional providers of business software implementations are all happy and cushy in the knowledge that their cumbersome implementation, with their multi-million dollar contracts and hundreds of consultants per implementation, are here to stay: It is difficult to consider the current business without that massive attention to detail and customization on installations.
But SaaS is too young, and the processes are amenable to change still.
Businessweek’s Sara Lacy, in her article On-Demand Computing: A Brutal Slog points out the various problems that different vendors are experiencing, and the steep barriers to entry that this industry seems to have:
“SAP thought customers would go to a Web site, configure it themselves, and found the first hundred or so implementations required a lot of time and a lot of tremendous costs,” Richardson says. “Small businesses are calling for support, calling SAP because they don’t have IT departments. SAP is spending a lot of resources to configure and troubleshoot the problem.”
This is the quote that jumps at me, along with the 10 years $100 million figures: is it too soon to think of IBM and their mighty boxes, of enormous top-bottom infrastructure that gets subverted seamlessly by an innovative and surprisingly simple product? I think of dinosaurs and little animals that take their place, of open source and in-house modification instead of exorbitant consulting fees.
If configuration and user interface is the problem, there are deep issues of software architecture, openness and user experience that must and will be addressed. But all this is infrastructure, not technology.