News from the Cloud: Why 'Big ERP' is scared of SaaS

2 Feb - In a recent post in the Cloud Agenda section, CODA group marketing director David Turner turned his attention to on-premise software vendors who were taking pot shots at Cloud-based applications.

The last great growth wave in business software came in the 1990s on the back of integrated enterprise resource planning (ERP) applications from the likes of SAP, Oracle and Lawson. In August 2008, Lawson CEO Harry Debes claimed that the SaaS market would "collapse within two years" and made it clear that Lawson was actively avoiding a SaaS strategy.

Bill McDermott, president and CEO of global field operations for SAP also dismissed “half-baked applications from unproven SaaS upstarts” who would need another 36 years to achieve what SAP has done.

The outbursts both come from "Big ERP" vendors who supply technologically heavy systems that are slow to implement, hard to integrate with and extremely difficult to change or re-configure once implemented. "Clearly both are threatened by the SaaS movement," writes Turner. "The inherent speed of development, flexibility and ease of deployment contrast sharply with the experience of ‘Big ERP’ users. These critics make the mistake of assuming that because many early applications have been relatively trivial or functionally shallow - which, let’s face it, they mostly have - that SaaS applications can never be 'enterprise strength'."

Turner accepts that to date, no enterprise ERP vendor in the SaaS space has made a real impact on the market in the same way that companies like SAP and Agresso did in the traditional ERP software space. What we are seeing instead is a repeat of what happened with business software in the 90’s where a new raft of best-of-class applications is being born. "This trend will never go away, as businesses have different requirements and specific systems that they need to support... All new technologies present challenges but enterprise strength cloud accounting is becoming a reality and in a lot less that 36 years!"