For a long time, enterprise software vendors ignored the movement toward SaaS-based IT services. “Customers don’t need it!”, “Who wants to give his data away?”, and many other clichés paved the way for quick, aggressive new vendors to build SaaS-based enterprise software solutions, and steal market share from the big guys. We saw this with Siebel and Salesforce, and its happening all over again again across other verticals of IT management.
Market dynamics have changed over the last few years, and customers’ appetite for easy-to-use, SaaS-based IT management solutions is skyrocketing. So finally, the legacy vendors are responding.
What’s the Big Deal?
Migrating to the SaaS world is a big deal for traditional enterprise software vendors for a few reasons. First, they have a cash cow they need to protect, and cannot jeopardize the perpetual licenses (declining) and maintenance streams derived from their legacy on-premise applications. Second, they have to invest resources into adding new capabilities to their legacy on-premise offerings to stay competitive. And third, which is the hardest, is that SaaS requires a different business DNA, and affects everything across product development, service delivery, support, finance, sales, and even working closer with customers. It’s simply a different business model.
Making the shift from on-premise to SaaS is a big effort, and they are looking for shortcuts.
Putting Lipstick on a Pig
BMC’s announcement of Remedy OnDemand this week is dressing up the same old legacy Remedy product with a bit of a lipstick. Taking the same software code out of the box, and hosting it with a third-party is not SaaS. Its simply ignoring the real customer pains, which have to do with the software’s TCO (upgrades, configuration, integration, interface).
Need to configure the product? The hosting provider can do that for you (for a fee). End of life and must upgrade (redeploy) to the new version? Pay the hosting provider and he’ll do that for you. This is no different than what customers had before.
Taking an on-premise software solution, and putting a SaaS sticker on it does not mean you deliver a SaaS offering – it means you’re hosting your on-premise software, which does not address the root problem for the customer.
Customers are Voting for SaaS
Enterprise IT teams are getting tired of the shortcomings of their legacy software applications. They are excited about SaaS-based IT management solutions because:
- SaaS offerings are designed using modern technologies, and deliver a superior user experience and usability.
- SaaS provides short time-to-value, and eliminates deployment risk. Most of our customers are up and running within weeks, not months.
- SaaS products get upgraded frequently and seamlessly (at SAManage, we completed over 30 upgrades last year alone).
- Customers are not required to manage and support the on-premise software application.
- SaaS eliminates shelf ware, provides for a capital-efficient way to use software, and allows companies to instantly adjust capacity to meet changing business needs.
Hosting an old on-premise software application, and calling it SaaS does not deliver these benefits to customers. And, luckily enough, customers are aware of it.