 Tuesday, April 25, 2006
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Quite an interesting piece from Howard Smith on the "success" of Salesforce.com, the poster child of SaaS. His view is that SAP and other "on-premise" vendors have little to worry about, since salesforce is manifestly not penetrating the enterprise.
According to published data, sf is growing its seats but its customers/seats ratio is unchanged. That means companies are not adding seats, further suggesting that sf's penetration inside larger companies is not growing; hence, SAP et.al. have nothing to worry about.
Further, Smith notes an article by Ephraim Schwartz in Computerworld noting that if you bought all 160 apps on Salesforce's AppExchange you'd be in hock for around $1.1 million bucks a year, subscription costs.
Now that's not necessarily a useful number, since there are many vendors offering more or less the same functions on AppExchange. However, it does suggest a more useful metric, as yet uncalculated, which is, what is the average number of enterprise apps in a mid- to large-sized company -- and what if you made them subscription-based instead of license-based?
It's an interesting question since licenses also imply 18% annual maintenance. Still it wouldn't entirely surprise me that if you made everything SaaS, at $65/seat, you'd be paying a lot more than license plus maintenance.
(Via Ismael Ghalimi of Intalio)
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USA Today: "Interstellar deathray not likely to hit Earth."
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Paul Harmon continues an excellent series on trends in BPM with a note on consolidating ERP systems. In the old days, he says, every department had its own processes backed by its own applications; today, in an effort to cut costs and standardize processes, companies are moving to a single instance of an ERP system.
But of course that ignores the reality that different orgs indeed have varying requirements. The sales cycle in Europe is different from that of Asia and North America. Compliance requirements differ. And so on. So the question is, how to have a single instance of ERP and have department-level customizability?
For Harmon, the answer is BPMS (Business Process Management System) which for him appears to be front-ending the ERP with customized sets of rules:
(Put more technically, one creates business rules within the BPMS environment that analyze and prepare data to be submitted to the ERP modules.) As an added benefit, the ERP modules can be managed by the BPMS tool rather than compiled together. Thus, now the BPMS product manages the ERP and allows the user to make changes rather easily, avoiding the problems companies with large compiled sets of ERP modules now struggle with.) Company X may very well find that they can use the BPMS system to tailor sale processes for specific value chains while simultaneously maintaining a single instance of ERP.
That's certainly one way of putting it. Over time, ERP will become componentized and service-oriented, such that its operation and usage can be controlled by a combination of identity (who's using it), declarative configuration (rules, perhaps), licensing, and locality (inside or outside the firewall, i.e., SaaS).
Indeed, the Holy Grail as it were -- that we are all pursuing -- is that some parts of the ERP app live inside the firewall, some components outside, and the user (and even, perhaps, the administrator) cannot tell the difference. Further, the ERP should ultimately be a composed application, meaning that companies can, using a design surface, stitch together those parts of the ERP app that they need, in the order they need, invoked under the conditions that are relevant for their business.
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Ending an era, Scott McNealy resigned as Sun CEO, relinquishing the reins to COO and blogger Jonathan Schwartz, who is just back from Brazil.
Congrats to all.
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For geeks only: Don Box found this excellent and useful overview of how to think of XSL (still can't get used to putting the "T" on the end; in the old days it was plain old "XSL") and XQuery.
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Mar May
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