Saas model will collapse in two years – What?

In a mind numbing interview with ZDnet, Lawson Software CEO Harry Debes made the prediction that Saas software model is bound to collapse in two years. Even if I try to put aside his opinion (however dumbfounded it is), what I cannot comprehend is how a CEO of a public company can call his customers stupid and that they are addicted to software like they would to cocaine. Read that again – stupid? cocaine?

In his interview, does he say anything about benefits to his customers that Saas brings to the table? It all seems to be a pitch on how beneficial on-premise software model is to the vendor – profitability, captive customers, switching costs etc. I wonder if Harry has a clue as to the pain points involved in installing and upgrading on-premise software? Maybe he should so that he can feel the pain of his stupid, cocaine addicted customers. Maybe companies like Google, Microsoft are all stupid too for having Saas models for delivering software.

While I totally agree that Saas is not the panacea to solve everything that is wrong with software, that many of the Saas vendors are not yet profitable, I cannot come to terms with him calling his prospective buyers stupid.

What is next to collapse Harry – social media?

Free products like gmail – do users have a say?

For the last week, gmail has just stopped working for me. Boy, it has not been fun, being locked out of your personal emails. I also use google docs and the story is no different here – I am locked out of my documents as well. I have tried everything that Google has recommended on their discussion groups but to no avail. Initially I thought the problem appeared to be related to accessing gmail from web browsers on a Mac but now I am finding that this problem exists on Windows as well – web browser does not matter. Speculation on discussion groups is that this was caused by Google’s latest update. I have seen reports of this issue as early as couple of months back and to this date, there has not been a fix?

This raises some important questions about free products: Because it is free, does that mean users do not have much say – after all beggars cannot be choosers, they say. There is no customer support number to talk to a human, you can send an email to google, but it says there will be no response from them. All this from a company who has grandiose plans to replace archrival Microsoft from its stronghold position in business apps? I think Google is going through growing pains of delivering its once well known Saas solutions of gmail.

I was one of those users who did not care about ads pasted within my email, but I cannot live without my personal email. Is this what we get for using free products? Do we have any say or are we left on our own?

Software as a service

One of the hot topics these days is the concept of “Software as a service” (Saas). Earlier this decade, there was a lot of hype around ASP (Application Service Providers) and when the dot com bust happened, ASP was one of the victims. Though ASP and SaaS are not exactly the same, many people think they are and call Saas a second incarnation of ASP model. Sucess of services such as salesforce.com has really fueled the success of Saas and everyone seems to be talking about it.

McKinsey recently published a very good article on delivering Saas, which explores the financial, accounting, customer support, developmental and other business and operational implications of Saas. To me, it is a must read for any product manager working in the software industry. The article explores these different implications and calls on all software companies to take Saas very seriously or fear to be left behind. (The article requires registration with McKinsey to get full access, but it is definitely worth the registration process).

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