Enterpsie software vendor says maintenance fee is free money !

I discovered an interesting Wall Street Journal post by Ben Worthen. The post highlights how traditional enterprise software vendors virtually really walk away with their customers money !

Safra Catz, Oracle's Co-president, said "we get to keep virtually all the money" our customers pay us for maintenance and access to upgrades. He continues to suggest that Oracle is any way going to have new releases notwithstanding customer payment. In short, for Oracale, like other enterprise vendors, maintenance is pretty much free money, about $10.5 billion worth in its 2008 fiscal and about $1.5 billion more than that this year.
“When many customers just send you money for something you’re doing anyway, you literally can’t help [but increase profits],” said Catz.

So my thought to all enterprise software product customers who have not tried out SaaS - check it out and stop sending your cheques to finance Mr. Elisson next F-14 !
For advantages of SaaS solutions check out this page.

SaaS 20 Stock Index

Unless you were living in a cave in a remote tropical jungle you are aware of the turbulence and meltdown in the stock market. Although the market is in a terrible situation there are still some interesting sectors and companies to look at. With that, I present the SaaS 20 Index assembled by Nine Lives Media Inc (w3).

Some may see this post about the SaaS 20 Stock Index as superfluous given the red streak in the market. But I think the SaaS 20 Stock Index is worth some attention, especially if your stock portfolio, like mine is in the red.

I conjecture that these SaaS companies like rest of the SaaS market will see their performance rise during these tough economic times. The logic behind my conclusion is as follows. We all agree that corporations facing tough times will work to reduce both capital and operational expenditure, but will seek higher productivity. Moreover, evidence suggests that usually IT capital expenditure is the first to get cut. Now, in my opinion, this is a perfect situation for the SaaS sector. We offer solutions with very low (or no) capital expenditure which will help increase productivity. In other words this economic turmoil is the perfect condition for SaaS sector to take the limelight and overtake the larger product software market.  

If you work in the SaaS industry it may be worth your money to follow SaaS companies and  put some of your own money in good companies with low debt, good cash flow, high customer satisfaction, and high employee satisfaction; one example is Intuit.

Tip of the hat to Software Freedom Day celebrations

I have greatly benefited from Free and Open Source Software (FOSS). So a tip of the hat to Software Freedom Day celebrations. 

If you are wondering about the free in FOSS, it is the combination of both free beer and free speech! 

Recently I have been using GIMP, an open source raster tool, a lot for editing and creating web-resources. I think, my employer, QLogitek, should be happy because it has saved the company USD 800 in licensing fee alone!

Longlive FOSS.

 

Sterling Commerce is now refocusing on supply chain solutions

AMR researchers, and Sterling Commerce suggested during their webcast today that  SOA/SaaS is ideal for 3PLs during these tough times. I agree with them. 

My view is SaaS systems are ideal for 3PLs because they deal with clients with numerous different types of systems who demand more functionality at lower costs. Our supply chain consultants have known this to be the case. 

One interesting remark made during the session was that Sterling Commerce is transitioning from being a business integration provider to a supply chain solutions provider. I think Sterling Commerce's entry into supply chain solution market is good for the market. This market needs competition.

There are many companies that need help with their long supply chains, I know this because at QLogitek we have been providing ASN capabilities and integrating EDI systems for a long time and the demand for this continues. One good example of a typical EDI integration success story in the form of a case-study outlines some big wins experienced by our clients when they adopted our SaaS Hosted EDI System. 

Changing nature of supply chain, a discussion by prominent practiotners

Warren Sarafinchan, Sr. Dir., Logistics Solutions Maple Leaf Foods; George Croft, President & CEO Brick Brewing Company and Richard Zwolak, Logistics Services Mgr. Tim Donut Ltd - The TDL will be at a round table discussion on Oct 8th discussing how to sharpen your supply chain.

They will be discussing how these three companies met their supply chain challenges, beat their competition, and cemented their positions as Canada's premier supply chain masters

For more details check click here

Saugatech: "SaaS moving from edge to center in enterprise"

A recent important report from Saugatech notes that SaaS is taking center stage in enterprise IT. They go on to hypothesize absed on current research that SaaS will change the enterprise IT landscape as it moves from a niche entity status to mainstream IT enterprise choice.

Interestingly, over 39% of comapnies are likely to deploy SaaS applications for procurement and sourcing needs by 2010. This is surely good news for companies like QLogitek, Descartes, SPS Commerce etc. We definitly see many of our large and innovative clients like HBC adopting many SaaS solutions.

SaaS reshaping industries

PCWorld Canada has an article about The Warranty Resource, a Vancouver company, that is a offering a SaaS solution to building contractors. 

Construction experts quoted in this article say that this new SaaS solution is helping construction industry become more efficient and productive at an affordable cost. 

As long as customers derive good value from a solution they will be less concerned about it's delivery mechanism. In other words as long as SaaS players can demonstrate real value to clients and ease their pain the market will continue to love saaS.

NetSuite riding the Chrome buzz

NetSuite, one of the popular SaaS ERP players, has announced that their SaaS solutions have "native support for Chrome."

I agree with Cnet's Shanklans who notes that NetSuite's typical clients are conservative and technologically unadventurous customers - aka large & medium enterprises - who are not the type to try the beta version of a Web browser. I think, most enterprise clients are concerned about compatability with IE 6, a browser from 2001, although MS has IE 8 now !

Any way, I think this is a cleaver marketing move by NetSuite to ride the Chrome buzz. Congratulations to NetSuite marketing.

SaaS Panelist at Office2.0: SaaS is not just a f-word

Dsgnwok reported (thank you) that the SaaS panelist at the Office2.0, like me, were dismissive of Debes's article.

Yet again, another panel discussed the SaaS model and concurred that SaaS is not a bad four letter word. SaaS makes it easy for SMEs to use the best IT without huge investments; moreover, SaaS allows companies to stay focused on their competitive advantage. Interestingly the panelist all thought data security is not as big of a concern as it is made out to be. The most likely adopters of SaaS, according to the panelist, are technology companies, young organizations, and fast-gowring firms. I found it interesting to read that the best way to convince large organizations is to present a clear total cost of ownership (TCO) analysis between SaaS & on-premise software.

I think the fact that we are still debating the worth of industry is an indication that SaaS is still a nacent industry has a long way to go to be mainstream. I am certain the path to mainstream is going to be cleared by companies like QLogitek demonstrating the advantage of SaaS to multi-billion innovative companies like Hachette Distribution Services (HDS).

Cliffs note version of Harry Debes interview.

After reading Debes’s interview I respectfully disagree with his analysis of where the (SaaS) industry is headed. First check out the Cliffs note version of his interview.

SaaS is the same as ASP which is the same as Service bureaus. Moreover, unlike traditional software, SaaS has a very poor business model because “it does not lock-in users.” Interestingly, according to Debes’s, the “stupid people” will realize that SaaS is a hype.

What do you think?

SaaS is dying...Debes

Lawson’s CEO, Harry Debes, says

“my prediction is that SaaS will go the same way as both ASP and service bureaus have gone–nowhere.”

Does he know something you don’t ? More on this later.

The full interview is here