Analyst Says On-Premise Vendors Struggling with Shift to SaaS

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When it comes to SaaS, most of the major players are companies that started out in the cloud - SalesForce, Amazon and so on. As we all know, however, the on-premise vendors are trying to make that shift. The question is: How well are they doing?


Not very well, particularly on the integration front, argues research analyst and TechVentive CEO Brian Sommer. TechVentive is a strategy consultancy serving technology providers, according to Sommer's ZDNet bio, and in a recent ZDNet column, Sommer says exactly what he thinks on-premise vendors are doing wrong when it comes to SaaS.


He writes that the "gap between the nimble, fast-moving SaaS vendors and the on-premise vendors is widening," because of three issues on-premise vendors just can't get it right:


  • Integration-as-a-service.
  • Integrating a platform-as-a-service with their SaaS solution.
  • Support for multi-tenancy.


Two things jumped out at me in this. First, on-premise vendors are trying to leverage their SOA platforms as a PaaS, and that's just not working and isn't going to work, according to Sommer. Second, Sommer says all SaaS vendors are more effective and innovative at leveraging integration-as-a-service as a means of reducing the cost of deploying software.


As for multi-tenancy, he says the problem here is these traditional products just weren't designed with that in mind, and it's neither cheap nor easy to retrofit products. He offers a more complete explanation, but if you'd like to learn more about the pros and cons of mult-tenancy from a user's perspective, check out this Forbes column by The Jargon Spy, Dan Woods.


Sommers isn't just arguing that on-premise vendors are failing to effectively move to the cloud: He also contends SaaS companies are beating on-premise vendors at their own game. For instance, he says Northgate Arinso developed a multi-tenant version of SAP R3 HCM-something SAP still hasn't accomplished.


On-premise companies aren't just struggling with SaaS. As I shared yesterday, traditional vendors are also facing more scrutiny over their efforts to promote private clouds, which many experts say are just repackaged SOA or data center tools.


As always, the mantra of the emerging SaaS/cloud market is "buyer beware." What's different in these situations? You're usually told to go with a vendor you know and trust, but in this game, it seems like the veteran IT players are following under a cloud-ahem-of suspicion. So when it comes to the cloud or SaaS, you'll probably do well to follow Sommer's recent advice on how to handle all vendor negotiations:

Never negotiate with just one vendor. While this is incredibly obvious, companies routinely make several mistakes on this one point alone.