Enterprise software market heats up, both on-premise and cloud

Enterprise software market has strong quarter, cloud-delivered solutions make more inroads. But will most of the market stick with on-premise for now?

ZDNet colleague Dennis Howlett just posted some of Ray Wang's numbers for the on-premise and cloud enterprise software vendors, which suggest things are robust -- especially for cloud-based solutions. But Wang seemed bullish on both, at least for the recent quarter -- "SaaS vendor maintained their double-digit gains while on-premise vendors mostly showed positive traction."

Cloud is the fastest-growing piece of the enterprise software market, but will most stick with on-premise for now?

Of course, double-digit growth for a new market is to be expected, as is single-digit growth or stagnation for mature markets. Still, this suggests that enterprise software in general -- no matter how it's delivered -- is in a relatively good position.

There are those reports that Marc Andreessen, tech entrepreneur of entrepreneurs, has been getting bullish on enterprise software, and has been pouring venture capital into this space.

The question is, how will a lot of it be delivered -- via cloud, or still via on-premise?

You may recall a couple months back, Jason Bloomberg discussed questions about the future that enterprise vendors face in the on-premise space.  He observed, while cloud has a fantastic value proposition, there's a lot of complexity within enterprises that require a lot more than simply tapping into a dot-com-based service. Things such as governance and planning need to be worked in to the equation. Don’t expect enterprises to be moving en mass to a software-less world just because cloud is this year’s flavor. Sure, cloud will offer a lot of compelling solutions, especially in startup situations (in large and small companies).

Dennis provides some thoughtful insights on what Wang's relatively bullish numbers for both on-premise and SaaS-delivered solutions are telling us, and that SaaS has potential to really eat into the market. But data reflecting true value to the business is not available yet. Still, he observes, the speed-to-market aspect, in which cloud-based solutions can be put into place in a matter of weeks versus years, may be increasingly irresistible: "The SaaS providers are demonstrating a challenge to on-premise vendors that have had up to 40 years to perfect their implementation methodologies and yet still talk about multi-year projects."


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