Friday Rant: Don't be a SaaS Bigot

In software circles these days, it's almost held to be a pagan ritual to believe in and deploy traditional behind-the-firewall enterprise software. It seems everyone has not only drunk the SaaS koolaid -- they've bathed in hosted holy water as well. Even SAP, the king of highly configured uber business workflows that cost millions of dollars each once you're done paying off the consultants to make it work, recently announced it's getting SaaS religion. Many will say it's about time. But is it?

I've gotten a surprising number of questions from users and consultants since the New Year about companies considering both SaaS and non-SaaS approaches to tackling Spend Management problems. Many are concerned, for example, about the limits of multi-ERP integration in the P2P space. Others voice similar security concerns -- many of which are based on incorrect assumptions, yet they continue to linger -- to those that date back to the origins of on-demand in the early years. But more are interested in exploring the installed options because they realize that their environments are so different than the next guy that they worry SaaS approaches will fall short of what they need.

Now, this is not to say that installed applications will thrive across the Spend Management spectrum. For example, I highly doubt that we'll ever see more than 10% of e-sourcing deployments go anything but SaaS again. But I do reckon that in larger companies, there will continue to be many aspects of P2P that reside within the firewall -- even new deployments. I also believe that contract management -- especially contract management deployments tied around spend and process compliance that must connect with dozens of internal and external systems and data sources -- are not necessarily going to go the way of SaaS. Spend visibility is another question entirely, although I suspect that we'll see more and more hybrid approaches where companies outsource data enrichment, cleansing and rationalization on a weekly, monthly or quarterly basis but keep the analytics component within their four walls -- most likely built on-top of a BI or custom reporting platform.

So where is this leading us? I believe that while a SaaS backlash may be overstated, I do suspect that we'll see a number of installed fans quietly getting together in the shadows. Like smokers who feel shamed congregating outside office buildings and restaurants when they need to light up, these installed purists will face the smirks and grimaces of their colleagues. But maybe -- at least in some areas -- they'll be the ones getting the last laugh (or puff). At least within the confines of some of the more complicated and fortified Global 2000 walls.

- Jason Busch

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