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Why 'Big ERP' is afraid of SaaS

Why do the traditional ‘Big ERP’ vendors seem to be scared of SaaS? Following an outburst from Lawson’s CEO last year dismissing the SaaS market as a viable one, a senior SAP exec has made similarly astounding claims this week. Back in August last year, Lawson CEO Harry Debes gave an extraordinary interview in which he claimed that the Saas market would ‘collapse within 2 years’ and seemed confused between SaaS as a technology approach and a pricing methodology. He was clear that Lawson was actively avoiding a SaaS strategy. This week in an interview with Information Week Bill McDermott, president and CEO of global field operations for SAP, refers to the dangers of relying on “half-baked applications from unproven SaaS upstarts”.

Recalling SAP’s 36 years of experience developing a “stable core” of enterprise software and a service-oriented architecture that makes it easy to add on third-party and custom applications, he says “It will take another 36 years for software-as-a-service vendors to do the same thing in the cloud”. What unites these two companies, and their outbursts against SaaS? Well, both fall into what the market often refers to as ‘Big ERP’ – characterized by technologically ‘heavy’ systems that are slow to implement, hard to integrate with and extremely difficult to change or re-configure once implemented.

Many organisations that CODA and our sister company, Agresso deal with would certainly argue about SAP being ‘easy to add on third-party and custom applications’. Clearly both are threatened by the SaaS movement. The inherent speed of development, flexibility and ease of deployment contrast sharply with the experience of ‘Big ERP’ users. And they make the mistake of assuming that because early applications have been relatively trivial or functionally shallow, that SaaS applications will never be ‘enterprise strength’. So they seem to struggle with the concept of mixing SaaS and traditional software as a vendor. That is an error.

Maybe because at CODA and Agresso our philosophy and fundamental product design actively supports quick implementation, ease of integration and on-going agility, we aren’t threatened by the arrival of SaaS. We see SaaS as an exciting approach, but ultimately as just another technology ‘platform’ – an alternative method of delivering our accounting systems expertise, that sits alongside many other technologies past and present. We offer a range of delivery options to our clients, from buying, running and owning their own instance of software to hosting, renting or cloud computing – and all points in between.

Ultimately it comes down to what is best for users, and what the clients want. All new technologies present challenges but there is no fundamental reason that we can see why we shouldn’t be able to deliver a functionally rich, enterprise strength accounting system ‘in the cloud’. CODA 2go has been designed as an enterprise strength application incorporating the same fundamental design principles as our other international accounting systems, and we developed version 1 in less than a year. Yes, it’s only release 1, so clearly will take a while to be as functionally rich as our more well established accounting applications. But it won’t take long to achieve that. And certainly a lot less than 36 years!

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