10th Question for saas vendors

Brian Sommer's 9 Questions every SaaS vendor needs to be able to answer provides an excellent snapshot into the minds of at least some CIO's looking at SaaS as the future of their compute environment. Knowing Brian as well as I do, his straw poll summary will have been carefully thought through and the questioners will have been well chosen.

I sense that in the depth of question, CIOs are detecting a relative maturing of solutions and so are making ready to start asking some of the tough questions.

Tucked in the middle, he asks:

When will larger application suites appear on the cloud?

I have a related but 10th question:

- When (other than NetSuite, SAP Business ByDesign and Plex Online) will we see credible cloud alternatives to on-premise offerings that reflect the depth of functionality we need?

In conversations with Sage earlier today, I learned that in the mid-range, partners are relieved and excited to see the company readying new versions of admittedly old and clunky software. X3, over which I was far from impressed is doing remarkably well. "Once we made a global rather than regional product we quickly found plenty of uptake," said Stuart Lynn, who heads up mid-sized business apps R&D from the company's Newcastle, UK base. Long live revitalized on-prem? Especially if it protects past customization investments?

Functional completeness doesn't really matter so much at the VSB end of the market but as you move up the business food chain, functional differentiation or imperatives rapidly come into view. As I said in an earlier piece:

Remember that with the exception of NetSuite - which doesn’t break out service revenue - the remainder of the players in Ray’s list are providing relatively simple point solutions.

But then taking Brian's 9 questions and parsing them against Bill Kutik's detailed analysis of SuccessFactors' Employee Central build, cracks are appearing that few will likely be able to quickly fill. The crucial part of Bill's story comes where he says:

I am thrilled by innovative software. And SuccessFactors seems as nimble at innovation as any vendor in our industry. I can't wait to see the large company EmployeeCentral -- whenever it gets finished. I can't wait to see SuccessFactors change the dynamics of our software market.

Just build me a solid floor first, please.

[My emphasis added]

This is where those of us who enthuse about SaaS sometimes find ourselves in difficult waters. Vendors like SuccessFactors are persuading customers to take risks in the name of lower cost innovation and speed to value. But then what are they doing that is so radically different other than making the UX more intuitive? And even that coupled to selling futures? Do I hear the ghost of past complaints about forward selling coming back to haunt the SaaS players? Where is the breakthrough in suite development that makes a CIO go 'Aaah - that's different and I like it' other than potentially in the ROI stakes?

In some areas like HRMS, end of life for solutions like PeopleSoft represents a good time to think SaaS replacement. Even so, we've not really seen enough evidence of breakthrough, process led (as an example) applications that have hooks to third party apps (unless you're buying into a new form of lock in via say Salesforce.com) and which answer all those other questions Brian raises.

My concern is that as the sound of past cheerleading echoes down corporate hallways to reach CIOs ready to spend again, there are too few answers to uncomfortable questions. The obvious knock on effect is to throw another 2-3 year lifeline to the on-premise vendors. It isn't necessarily the FUD of which Brian speaks, but the safety and certainty that SaaS has yet to embed into its pitches and services.