On Demand today and tomorrow
I’ve had the chance to talk to scores of customers, partners and vendors regarding the current state and future of software as a service and on demand solutions and services. Here’s what I hear – and what I think about where things stand and where they are going.
First, I haven’t met any. “on demand buyers”. Customers are still — and always will be — looking for solutions to business issues and needs. Today’s successful on demand vendors have borrowed liberally from the proven approach of previous generations of successful software vendors. Many / most have started with a particular department or line of business, and they have either found innovative ways of solving pressing business challenges, or they have found ways to fundamentally alter the economics of purchase and deployment of these solutions. It’s a successful formula for vendors and customers, but there are fundamental challenges for customers as they look to integrate these individual solutions together – especially as they grow and their overall IT landscape gets more complex.
I see a number of key trends emerging around on demand solutions:
- Expanding scope across discrete domains / focus areas
- Expanding the number and types of users and groups that are served, and
- Radically expanding opportunities for partners of all types to build, deploy and manage these solutions
Let’s briefly take a look at each, and I’ll go deeper in future blogs.
Functional expansion is one of those immutable laws in the software industry. I’ve been in this industry long enough to have seen solutions expand from ‘best of breed’ (typically focused on a particular department or a narrow set of business problems) to integrated suites that address requirements across areas of the business and even across businesses. I see the same thing happening again, especially with smaller customers who don’t have the IT resources, competency or interest to manage a myriad of individual solutions and how they work together. The common theme I hear is that these organizations are only interested in managing their businesses, not their business software. This is a real sweet spot for SAP Business ByDesign, and I’ll share more on that soon.
Social networking and collaboration tools and capabilities are all the rage with consumers and increasingly with businesses. Unmanaged – these can represent real productivity killers, but employed properly, they hold great promise in improving how people do their jobs and how groups of people work together. The key is to leverage these capabilities in the context of how people do their individual work and how groups of people can better collaborate to achieve business outcomes. This is exactly what we are focused on with personal productivity solutions like SAP Streamwork and BI On Demand, and in how social networking capabilities and media are incorporated into Line of Business on demand solutions like Sales, Travel, and Career management.
Finally, and perhaps most importantly, I am convinced we are on the cusp of the largest shift this industry has ever seen. Years ago, I registered the domain ‘reintermediate.com’. Why? Because I believed that the ultimate impact of the Internet, standards, and shifts in computing infrastructure and elasticity would lead to business processes and practices being taken apart and recombined in completely new ways – and that new intermediaries and participants would emerge. It’s definitely happening, and I am convinced that Platform as a Service and new types of commercial infrastructure to help prospective customers discover, purchase, deploy and manage will radically accelerate this phenomenon. The promise for partners is unparalleled (admittedly, I’m looking at this from a vendor’s point of view). More importantly, customers will benefit from solutions and services that are designed to interoperate, and I predict that many more companies will derive lasting value – and that they will realize this value more quickly and more cost-effectively than ever before.
It’s probably not surprising to folks familiar with what SAP is doing that these current realities and future trends represent key pillars of our on demand strategy. That said, I share these not because I’m responsible for helping bring these solutions to market, but because I’m absolutely convinced that these are the directions the market is headed. I let the reintermediate.com domain lapse some years back (not exactly a memorable URL), but maybe I’ll look back into it. Observing everything that is going on, I’m pretty sure I was on the right track.