Gartner Group this week warned that SaaS vendors need to get back to basics to improve customer enthusiasm for the benefits of the on demand model (http://www.businesscloud9.com/news_analysis/bubble-bursts-among-customer...). That's not a view that finds favour with Tom Fisher, VP of Cloud Computing at SuccessFactors.
“The early part of any wave (of adoption of any new technology) tends to be slow and not well established. That's hardly a breakthrough statement. However, SuccessFactors' growth and enterprise account adoption indicate that a massive second wave is coming with massive adoption of the SaaS model and the business processes they support. Gartner should be monitoring this trend as it is happening now - not citing statistics measured back in December.
This second wave not only measures net new customers but now includes the active replacement of "on premise" applications by major enterprises - research conducted seven months ago wouldn't capture the essence of this movement. It's happening as confidence increases in the capabilities, the business adoption offered by SaaS application providers increases and as the business model for SaaS providers matures. Specifically, SuccessFactors is witnessing a shift in the SaaS delivery model focused on increasing the speed of delivery and the velocity of changes to meet additional application capability required by our customers.
On a higher level, the SaaS market is shifting - providers know that they can no longer add capability and expect customers to pay for it. Instead, a high customer renewal rate is one of the main business metrics that companies like SuccessFactors depend on to thrive and is achieved by continuously innovating and delivering required capabilities for our customers regularly. The big difference in this "second wave" is that SaaS vendors have to do this continuously versus the extended time lag expected by their 'on premise' counterparts.
The big challenge of SaaS is integration -a discovery I hope that Gartner is not now just making. Rather than a technical issue (most applications in the SaaS marketplace are built on web services), integration presents two options in the Saas marketplace: iFrame integration and data integration. In the former, applications are invoked from within another application, and in the latter, data is shared from one application and framed it in context of the hosting application. In fact iFrame is much easier - and supported by most SaaS vendors. SuccessFactors is leading the data integration effort working with a number of leading providers of this technology and service providers and making it a core part of our solution.
SaaS/Cloud solutions remain a compelling way to deliver business value at a significantly reduced cost and faster than ever, and SuccessFactors' adoption rate is a clear demonstration that this market continues to expand rapidly with massive adoption in the enterprise as many of the early concerns are overcome.
The SaaS model continues to mature and this developing landscape makes it even more difficult for 'on premise' vendors to make the transition and find roots in the soil - note the failures of SAP and the lack of an offering in the SaaS marketplace. Companies like SuccessFactors, Salesforce and NetSuite are increasingly encroaching on more traditional 'on premise' vendors' stronghold in the enterprise by providing greater capabilities - in record time and at substantially lower costs with much greater value to the customer.”
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