Comments on: SaaS Won’t Kill On-Premise Software

By: Joe Panettieri

Joe Panettieri — Fri, 27 Mar 2009 14:43:54 +0000

Nick: We’ll, I can’t debate you on the SMB space. Our own company is a small but growing business, and 90 percent of our applications live in the cloud.

By: Nick Vossburg

Nick Vossburg — Fri, 27 Mar 2009 14:34:23 +0000

Excellent points, and please note I am referencing the SMB market only, and more specifically service based industries with less than 250 employees.

To clarify my point, MSPs largely make the majority of their revenues by managing the complexity of systems. An exchange server for example commonly is managed at a higher fee than a file/print server. On premise software will continue to exist but the advanced services of Exchange, Sharepoint, Vertical Apps, OCS, CRM, etc will continue their migration into the cloud for the well known reasons presented in the SaaS vs On Premise argument.

Therefore, unless your business model consists of supporting firewalls, PCs, and intelligent NAS devices you will see a substantial drop in revenues.

I firmly believe that cloud computing represents a vast and deep shift that is far more significant and permanent of an impact to our industry than the shift from T+M to MSP.

If they can successfully bring gaming from the cloud (OnLive), then we’re really in for a whole new world…

By: Joe Panettieri

Joe Panettieri — Fri, 27 Mar 2009 13:39:28 +0000

Jim, Team: I agree that large enterprises will stick mostly with on-premise apps rather than SaaS. However, those large enterprises are using a range of managed services — particularly managed security and increasingly managed unified communications — from big service providers…

By: Jim Van

Jim Van — Fri, 27 Mar 2009 02:30:41 +0000

We deal largely with the VSB (<20 seats) market these days, and SaaS is the new buzz at that level. I think that SaaS will really grow at that level, given its low pricepoint (at least short term) but agree that the enterprise will still hold a lot of on-premise apps, as Nick points out.

Don’t discount the VSB market though. They’re a huge part of the economy, and their role is shifting as technology enables them to do more…

Jim Van
Logicomm, Inc.
http://www.logicomm-inc.com

By: Evan Siegel

Evan Siegel — Thu, 26 Mar 2009 21:04:20 +0000

I’m leaning towards what Joe says. Large, Fortune companies want control over their own software and therefore gravitate towards the In House model, where as SMBs may not have the resources available to justify the time and costs, and go for hosted solutions. As a “service provider” the viable solution is to consider the market you want to go after and cater your needs to it.

The old saying “You can’t please all the people all the time” holds true. Know your market and your competition and develop the strongest solution you can and take lots of feedback from your customers.

SaaS is on the rise. At Karisoft we’ve got both models available of our IT Pro Dashboard.

By: Joe Panettieri

Joe Panettieri — Thu, 26 Mar 2009 20:22:13 +0000

Nick: Healthy debate drives the market forward. And strong, conflicting opinions will always be welcome on MSPmentor. Good to hear from you.

My take on SaaS vs. on premise: The vast majority of enterprise software providers (Oracle, SAP, Microsoft) are still on-premise for the most part. Those three companies alone likely represent more than $100 billion in annual revenues. (Sorry, I don’t have the data at my fingertips.)

Meanwhile, Salesforce.com is a SaaS market leader … but a $1 billion toddler compared to those older, bigger giants.

SaaS will grow super-fast. But the legacy guys are giant.

By: Nick Vossburg

Nick Vossburg — Thu, 26 Mar 2009 14:44:09 +0000

Joe,

Im going to disagree on this one. I think the Gartner statistics are misleading. I would assume that the overall software market includes O/S’s, Office, etc. Does it also include the software running in Datacenters or through the MS SPLA?

I would cite a recent article today that points to the opposite:

http://tiny.cc/Ij3bb

I think today’s economy provides ample acceleration to the Cloud or SaaS computing trend.

Hope your well!