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Video: On-demand versus on-premise for the large enterprise

In this four-minute video recorded at SIIA OnDemand Europe 2009, Mani Gill and John Wookey talk about the differences between on-demand and on-premise software deployments for large enterprises. Gill is vice president of OnDemand at SAP BusinessObjects. Wookey is executive vice president of Large Enterprise On-Demand at SAP.
Mani Gill – VP, OnDemand, SAP BusinessObjects Division
So John – on-demand versus on-premise: In the large enterprise space, what’s the difference?
John Wookey – EVP, Large Enterprise On-Demand, SAP AG
That’s a great question, and obviously, a lot of the focus, when you talk to people, is the cost of deployment, the idea that you’re going to pay a subscription fee instead of a license and maintenance [fee, and] the fact that it’s deployed rapidly, rather than going through a formal package installation process – and I actually think that’s pretty important.
[But] I think what’s actually more important – the long-term, bigger value that both the customers and the vendors, frankly, are going to gain from this – is this idea of kind of a persistent relationship between the vendor and customer on improving the product, and this idea that you can go from an idea to a design to real working code in a period of a few months – and actually try it out with your customers, and let them see if it solved their business problem, and what ways can you improve it, and actually iterate on that pretty quickly.
And the fact that we’re using, you know, agile development methodologies, and every four weeks you have progress on working code that a customer can come in and validate and tell you if it really is solving their problem or not – I think is a tremendous advance – and frankly both for the customer and for the vendor. Because what’s always frustrating as a software vendor [is] to build software with all good intent to have it work well for the customer and involve them in [the] early design process but not get feedback in some cases for years about how well you’d actually solved that problem.
And so I think one of the great advances in on-demand is this idea that you can work with customers on a much more persistent basis, in very sort of incremental steps as you advance the functionality in the software and make sure that it actually works for them.
Now, obviously one of the interesting dimensions of on-demand software is the fact that we’re deploying it as an independent solution and often it has to work well with other solutions that they’re deploying – and in the on-premise days, that gets solved by a systems integrator who tries to bring that all together on-premise. But in the world of on-demand, the intent is that that service works instantaneously, so then the question is, “How do vendors work together when we’re trying to solve a single customer problem in the cloud?”
Mani Gill
That’s a great point. In delivering on-demand solutions at SAP BusinessObjects for the last four years, one of the things that’s become very exciting is, how do you leverage the fact that you are in the cloud to provide scenarios and solutions that we were having huge difficulty providing in the past?
So, for instance, this complex environment where you need to share information [and] resources, and collaborate with different suppliers within a network is something that’s very difficult to do today. And these integration challenges of having applications talk to each other – whether those applications are in the cloud, talking to other applications in the cloud, or applications that are running on premise that need to communicate with applications that are in the cloud – becomes a very interesting challenge.
And I think that it’s something that needs to be thought of in the design of the application, rather than [as] an afterthought in on-demand. As you mentioned, in the past, it’s [been] left to the system integrator. In today’s on-demand world, you have to think about it in the context of the application. So that is today a key challenge with software as a service or on-demand applications, but it’s something that we definitely at SAP feel is going to be key to our strategy.
John Wookey
And I think that’s why the ecosystem is as important during the design, because, similar to building the application with one vendor, you have to think about the consumption of the service as part of the design process – which means we have to bring other partners into that process as well as customers.
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