Now that we've got the preliminaries out of the way, let's get on with it. I will be posting a short series about my thoughts on the future of enterprise software. Having recently left a leadership position at a Software-as-a-Service (SaaS)/On-demand/ASP/Web 2.0 (whatever the term de rigueur) software company, for a more traditional organization with a "perpetual license" model, I have been thinking about the "thin client/server" approach exploited by most of today's enterprise applications. Clearly the force of Salesforce.com since coming onto the scene back in March 1999, after Siebel's 6-year run, spawned numerous on-demand applications, including many copy-cats. In fact, their marketing mantra was "No-Software" (it is still in their phone number). Now IDC estimates that SaaS spending will double in the next five years to $10.7 billion in 2009 (IDC No. 33120: Worldwide and U.S. Software as a Service 2005-2009 Forecast and Analysis: Adoption for the Alternative Delivery Model Continues, May 2005).
So what does this mean for SAP, Microsoft, Oracle, let alone the thousands of other vendors and their customers? While SaaS and the open source movement must be addressed, and many companies like Microsoft already have, or are developing their strategies, it remains unclear how large customers will adopt these systems. In my experience, SMBs are today's primary target market for these solutions and for the foreseeable future. Check out tomorrow's post for why.
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