We launched CloudAve quoting Lawson CEO Harry Debes's famous a prediction: SaaS market will 'collapse' in two years. Mr. Debes likely did not predict that his interview would send shockwaves around the world.
Today we have a software icon, Dave Duffield respond to Harry Debes. A long-time software Exec, his best known for having created PeopleSoft, a successful ERP company that in its heyday posed a threat to SAP and Oracle.
More importantly, he's seen both sides: PeopleSoft was a
"traditional" (at the time) on-premise, client-server based application
suite, while his current venture, Workday
is an entirely On-Demand, multi-tenant service offering. He himself is
a key investor in Workday, so he clearly has a stake in seeing the
market does not "collapse" i ntwo years.
Teasers from the podcast: (unedited, quick notes while listening )
Dave Duffield wonder if Harry has ever heard of ADP? They had
offered SaaS long before the ERP industry was born. They are a leading
indicator for the entire World Econonmy.
Important distinction between SaaS and a sub-model: On-Demand.
Workday is in the On-Demand space. Marc Benioff's definition:
subscription-fee based, multi-tenant architecture. ADP has been doing
Look at market success: Salesforce.com market cap $7B. Lawson has
been around longer, with more products yet it's market cap is $1.4B .
What does that say?
Debes does not talk about end-users. Duffield: SaaS is customer
driven. Upgrades, patching ,fixing… horribly expensive. SaaS: vendor
on the hook every single day. SaaS providers can shrink overall cost
(infrastructure, support) – pass on savings to customer. Focus
resources on one single version of the product.
Duffield: Tomorrow we could offer an installed perpetual licence
version of the product. Won't do that, not a good business model.
- Mainframe created. MSA, McCormick & Dodge…
- Client server model . Peoplesoft, Oracle, SAP. All others drifted away.
- Next shift: On-Demand. Embracing web 2.0 consumer tech, mobility,
social networking..etc. better information to employees, managers.
Eliminate most burden on the customer IT team.
None of the older companies can continue to innovate. Need to start
from scratch. Need best developers, not b, c-team. When announce new,
see old product sales stall..etc. SAP did a total bottom up rebuild
with their BYD, but still main worry is cannibalizing existing product.
If your an enterprise customer and have to pick between a SAP
implementation (multimillion $) or wait for the new one (BYD), what
will you do? (or look for alternatives.. plug for Wordkday).
New player has clean slate, better chances. Workday is replacing systems in fortune 500 companies now.
Comparing Peoplesoft, started 20 years ago vs. Workday, 3 years old.
Different technology architecture. Web services based, fully object oriented, enterprise service bus, On-Demand, multi-te
nant. 60 customers today. Very different technically and totally different business model.
On where Workday is after 3 years vs. Peoplesoft at the same stage:
times everything. Number of people, revenue (bookings) customer
count. Way ahead of where PSFT was in 3.5 years Want to become the
poster child for revitalized, on-demand ERP space, like Salesforce.com
was for CR.
For more details, listen to the podcast, brought to you by the Bill Kutik Radio Show, featured on Knowledge Infusion Center of Excellence, run by fellow Enterprise Irregular and industry analyst Jason Corsello.
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