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May 19, 2009

SaaS - The "obvious" choice

At the end of the eighties, once the idea had started to take hold, it was an innovation. The drive for efficiency, elimination of deviations, and cost effectiveness had allowed the Enterprise Resource Planning (ERP) bug to take hold.

Through the early nineties the ERP industry took hold in every conceivable industry, particularly those that involved many complex transactions every day. Manufacturing, banking, heavy industry, defense and mass transit  being memorable areas where large implementations were carried out.

By the late 1990's it had transferred from innovation to obvious. This movement created an industry of  mind boggling size, it also splintered sending offshoots into other related areas, spawned other sub-industries like Business Intelligence, and went through several evolutions itself along the way.

This is "an idea whose time has come". An idea that has captured peoples attention, dealt with a problem, something that was broken in some way, and has spread to the point where it is no longer challenged but embraced.

Yahoo thought it was leading the portal industry. Unfortunately it later became obvious that their visitors were actually looking for a search engine. The obvious one right? Google.

The obvious choice for quick information is Wikipedia, hazy at first. The obvious place for online trading is eBay, the obvious payment manager is Paypal, and the most obvious way to travel long distances is a airplane.

And today there are a growing number of voices saying that SaaS is an idea whose time has come...

Since the ball really started to get some momentum with SaaS it has gone from innovation to intriguing, and from intriguing to challenging. Today there are many very powerful voices out there talking about SaaS as it if had already become the obvious way to manage business transactional information.

In fact - there are even more powerful voices voting with their (reduced) implementation budgets. The industry is resisting, this cash cow still has a bit of a race to run; but the present recession has changed that.

Times are very tough, costs are under intense focus, and technology has raced forward. It is the perfect storm.

ERP vendors are facing a tightening market space while SaaS vendors are being fueled by people looking toi shave costs.

So prepare for a wave of "Why the media industry is dying" type of posts over the next three years on ERP implementations.

Soon I have no doubt that it will become obvious. Those hold out in the ERP camp will be left with no more arguments to hang onto and an ever pressing need to compete with competitors who were early adopters.

No more inflexible on premise applications requiring their own proprietary code, no more expensive and gigantic implementation costs, reduced maintenance and annual fees and more initiatives and less projects.

More easily built custom apps on platforms like and far less huge ticket modifications to existing programs.

From where most of us sit it seems inevitable, soon it will be obvious.