The second week of October featured an unusual juxtaposition of conferences in San Francisco that highlighted,...
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at a minimum, the fact that current models of how companies like SAP build, sell, and buy software are under increasing attack. The question of the moment isn't who's attacking as much as how seriously damaging the attacks stand to be. The answer, for now, is a qualified "not to worry." It may even prove that SAP could turn out besting its doomsayers before all is said and done.
The week started off with Salesforce.com's Dreamforce conference. Here Salesforce.com touted a new online database-as-a-service offering. The week finished with the Office 2.0 conference, a who's who of new companies and new offerings that loosely fall under the Web 2.0/Office 2.0/Enterprise 2.0 jumble that is becoming a favorite topic in the conference circuit and in the blogosphere.
Interestingly, SAP's enterprise software model was under direct or indirect attack at both events, and, in both cases, the attacks fell far short of dealing anything more than a glancing blow. At Dreamforce, the dominant themes were that every enterprise function could be performed by Software as a Service (SaaS), and that the "old" model of licensed, on-premise software, was dying forever. Little evidence, other than bluster, was provided to prove the death of enterprise software. In talks with Salesforce customers, it was clear that for the vast majority Salesforce.com and its SaaS model were more of an adjunct to their existing enterprise stacks -- SAP and others -- than the center of their enterprise software universe.
Over at Office 2.0, the buzz was about new ways in which collaboration, social networking, wikis, blogs, and other next generation ideas were going to take the world by storm. Again, the subtext was that the evils of big software selling to big CIOs would be swept away by the revolution that Web 2.0 et. al. are promising. Again, lots of bluster, some interesting technology and products, but nothing in the way of proof for the demise of the enterprise software model other than a lot of wishful thinking.
Questioning -- and overthrowing -- the status quo has a time-honored tradition in high-tech. Sometimes it works -- most of the early mainframe-based ERP vendors died a quick death following the ascendance of SAP and other modern ERP vendors. And sometimes it doesn't: Unix workstations and client/server computing were going to destroy the mainframe in what everyone thought was a zero-sum game in the mid-1980s. But both models survived, and thrived, despite the drumbeats of the revolutionaries and doomsayers.
In the end, it's important to watch the trends as long as you're not so taken with their trendiness as to believe in their inevitable success. More things succeed incrementally than in a wholesale, winner-take-all fashion. And I think that, when it comes to SaaS and Web 2.0, SAP will easily be able to find as much opportunity as threat -- even if everyone thinks SaaS and Web 2.0 are SAP's to lose.
About Joshua Greenbaum
Joshua Greenbaum is a market research analyst and consultant at Enterprise Applications Consulting. He has more than 15 years of experience in the industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was the founding director of the Packaged Software Strategies Service for Hurwitz Group, which focused on technology, infrastructure and business issues in the enterprise applications market.
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