[1]

When I first started as a journalist, the database wars were about to break out. These conflicts were a blood-soaked battlefield of marketing, PR hype, downright lies and just plain down and dirty childish behaviour on the part of grown men who should have known better. 

Eventually they spread out to encroach on the wider software market, but they initially focused on two firms: Oracle [2]and Ingres [3]. Both were start-ups. Both rode on the back of a technological paradigm-shift - the relational database. Both were locked in competition not only with one another, but with an older, established database industry that worked in a totally different way.

Accepted wisdom at the time was simple. Ingres was technically a better product and offerered richer functionality and fewer bugs, but Oracle was the sexier, cooler firm. Oracle was great at sales and marketing while Ingres would have pitched sushi as cold, wet, raw fish. Oracle built a magnetic reputation and customers flocked to it; Ingres and its better products fell into the clutches of an ERP firm and then into the underbelly of Computer Associates. The better product lost out.

Flash forward 20 years and ask what this means for the Cloud Computing market? Again we have a paradigm shift, again we have start-ups challenging the orthodoxy. But while the market leader of the old database world, a firm called Cullinet, drowned in the relational tide, here is where we might see our analogy begin to break down. While the pureplay SaaS applications vendors have long derided SAP's Cloud intentions, I've always harboured a suspicion that many mainstream customer will be drawn to a name they recognise, regardless of the better Cloud credentials of others in the market.

The German applications giant has been slow to come around the idea of the SaaS delivery model. It's a perfectly understandable reaction given the impact that a move to a subscription-based revenue model is likely to have on its traditional up-front, big ticket licence model.

In recent months however there have been considerably more signs of coming over to the SaaS way of thinking, most notably with Business ByDesign [4] for the SME  community and with the work being done by John Wookey and his team higher up the corporate food chain. It may not be the full Pauline-conversion, but there has been a corporate mind-shift towards the Cloud world and what SAP's role in that world might be.

Of course, Business ByDesign has been frustratingly slow out of the gates and if we're brutally honest SAP has mis-managed many aspects of its marketing, leaving the way clear for the SaaS pureplays like Salesforce.com [5] and NetSuite [6] to make hay at its expense. Fair enough - all's fair in love, war and software industry marketing. SAP's big enough and powerful enough to take a few knocks on the reputational chin.

But what if - and whisper it softly - SAP is about to deliver a nasty surprise. What if all those frustrated users in the SAP world who want a Cloud option, tactical or otherwise, are ready to wait until SAP delivers in its own sweet time instead of picking up the phone to NetSuite or Salesforce.com straight away? And what if they'll do this not so much because of any considerations about the functionality on offer and more just because it's SAP and at the end of the day that's what counts?

I saw some of this in action at the Sapphire conference in Orlando earlier this year where a number of the (ridiculously limited) Business ByDesign early adopters were trotted out for inspection. Almost to a man and a woman, they said the same thing: we chose it because it's SAP. One admitted it was probably a more expensive option than NetSuite, but still went with Business ByDesign because it comes from SAP.

Now these were tiny companies, the sort that should have run weeping and wailing away from the prospect of dealing with a behemoth like SAP, notorious for its complicated and expensive implementations.  But the same thing happened in London this past week with some other early customers. The actual functionality supplied by SAP didn't matter as much as the prospect of doing business with SAP.

Consider the following comments. "Our customers are big pharmaceutical companies and they want to see us using a reliable system," said Mark Ipema, operations manager at Dishman [7], a life sciences company in the Netherlands, while Susan Shayler, COO at Numerical Algorithms Group [8]told me she'd looked at NetSuite but "the SAP brand swung it - the quality and reliability of the name."

Now this seems to me to be the makings of something of a potential problem for the new breed of Cloud pureplays. If customers can look at the choice of products on the market and decide not to go for the ten year old SaaS pureplay which might have more functionality and has thousands of customers, but choose instead to opt for the less mature, restricted availability offering from a firm that doesn't specialise in Cloud Computing and has little track record in that space, then I'd suggest that the NetSuites and Salesforce.coms of the world have a new challenge to face up to.

That doesn't mean we're in for an automatic re-run of the database wars. It's notable that the CEOs of both Salesforce.com and NetSuite earned their spurs at the feet of the master during their days with Larry Ellison over at Oracle. In fact, they were on the frontline of the database wars so if anyone's up to speed on the lessons to be learned then they should be. Both are great marketeers and evangelists for Cloud Computing and both are well postioned to give SAP more than a run for its money. The drubbing that Salesforce.com's Marc Benioff gave to SAP's Hasso Plattner in an industry debate [9] a couple of years ago bears this out!

But we're moving away from the phoney war.  SAP is ramping up the marketing around its SaaS efforts, with much more to come in 2010. Even if its strategy doesn't yet all join up as nicely as it should, there's less of a convincing case simply to say SAP doesn't get Cloud Computing. It might not get everyone else's version of Cloud Computing, but does that matter if its version is clearly going to win many ears? The SaaS pureplays are going to need a sophisticated response. 

And that's before we turn our attention to Microsoft [10]...