European SaaS vendors: not quite comfortable in their skins

This week in Amsterdam, our own Phil Wainewright was compering and moderating panels for the annual SIIA On Demand conference. If you’ve not met Phil he is the overseas person’s image of the ‘perfect English gentleman.’ He did a great job herding the cats aka the saas industry’s spokepeople and sponsors. Joking aside, Phil masterfully asked the kinds of question we all want answered. Referring to the freemium model, Phil asked: “How do you convince someone that a free application is worth more than nothing? I’m not sure I trust something I don’t pay for.” The question was directed at a thoughtful open source provider.
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SIIA is the industry talking to itself. Not quite a circle jerk. There was almost no evidence of the vendors declaring triumphant victory. Instead we saw a steady procession of sometimes divergent views, all received respectfully and thoughtfully by the largely European audience.

The tone was set by Zack Nelson, CEO Netsuite invoking lessons learned from Netsuite’s saas experience to illustrate how the VAR business model has to respond to changes in the market or, quite literally die. I’m skeptical whether the traditional VARs and SIs really understand this market. I still hear srtories of consultants feverishly punching calculators as they try figure what 10x of nothing really is.

Google’s announcement that it’s tying itself to Outlook served as a perfect backdrop for Marcello Crodiolo, CIO of Permasteelisa no holds barred discussion if his company’s Google Apps deployment to some 4,000 people. Citng the need to eliminate disaster recovery costs while maintaining security, Mr Cordelio was not shy of critiquing Google: ‘Lables and conversations are difficult to digest, you have to invest in training and education so that peple can understand the differences between the way Google works and Outlook.” That of course may now be a thing of the past, but in the corridors I heard about companies that are already calculating the potential cost in Exchange Servers and thinking about how they’ll negotiate the Google headline price of $40 per user per annum for even modest numbers of users. That’s what I call innovation.

And then you have John Wookey’s announcement of SAP’s saas plans. Confused or not, it speaks volumes that SAP chose to make the public announcement to the industry itself. It was greeted with mutued acceptance with some muttering that it was defensive while others immediately thought ‘cost.’

This is an industry that recognizes its youth. It understands the game is already changing and that even where there is a lot innovation, you’ve just got to keep moving. Having integration on the menu with Annrai O’Toole, Workday’s CTO, also speaks to real world issues of ‘loosely joined’ in the internet cloud applications space.

Overall this was a thoroughly enjoyable conference. Apart from the general speaker quality - which was excellent - there was a real sense that saas is maturing and that vendors are taking this next step - whatever that might mean- very seriously indeed. But above everything, the sense that the IT industry is on the cusp of a fundamental shift was rarely far from my thoughts.

It is refreshing to see companies, some of which are in open competition, intelligently debating the issues that matter to vendors but which have clear implications for users. Such as - what DO you do about funding in the current environment? I must admit to almost no sympathy for the VC panel which was touting for business but only had four possible takers out of a room of some 140 people. My how times have changed.

I understand the event was videod and sessions will be made available on one of the popular streaming channels.

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BY Dennis Howlett
Source：ZDNet

Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.

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