Over on Smoothspan, Bob interviewed the CEO of SaaS expense claim and business travel booking automator Concur, Steve Singh.

It is an excellent interview but the defining moment for me came in the following excerpt;

Do you think SaaS is an inevitable bridge that every ISV has to cross in some form or fashion?

Steve:  Absolutely.  Look at what’s happened in the last 30 years.  We went from mainframes and sky high transaction costs with few users.  Then we went minis.  Lower costs, more users.  Micro/PC.  Web-based On-demand  is the lowest cost structure and most users yet.  It’s inevitable continuation.

Any other advice for those who want to convert?

Steve:  This is just one guy’s prediction.  I don’t believe large companies can make the conversion.  Forget their genetic code.  How many will take the pain?  Companies won’t reinvent themselves. 

Think of taking a $40B company to On-demand.  The value of the business will go through huge negative change.  It will get crushed.  Cash flow will get crushed.  You have to layoff.  The transition is really hard and its very sudden.

If you’re north of $100M its hard.  Over $1B its impossible.

I’d like to compare businesses that have gone through fundamental shifts in the business model.  Very few have done it.  Intel is one.  But for every Intel there are 100 DECs.

You will see a next generation of leaders that don’t look anything like the last generation.  Keep your eye on the SaaS leaders.  Lots will happen there.

I couldn’t agree more – and this is the reason that Oracle founder Larry Ellison bags SaaS on the one hand and invests in it on the other.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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