Comments on: Moving From On-Premises to SaaS, Thoughts on Revenue Corrosion

By: Hana

Hana — Fri, 25 Sep 2009 20:57:02 +0000

This is a great post. I can relate to Ariba as our company went through the same hoops as he. We provide hosted CRM and subscription business is definitely the way to increase your bottom line if you have the producet that you can depend on and the customer service that is exceptional.

By: Smina Vanlerberghe

Smina Vanlerberghe — Wed, 16 Sep 2009 11:43:43 +0000

Ben,

Just my two cents here. The missing important “bit” to me is that the business logic of Ariba apps had to be moved to a web native model to allow the SaaS model to establish itself. In effect, being SaaS is not just about being a monthly subscription model, rather it entails the app to have enough services embedded for business users to subscribe to, from their browser. The technological leap being expensive up front is the sweat to wear until the business starts collecting the honey. Let’s be real, Ariba decided this move because?? Legacy applications are losing trail, it’s the whole discussion of on premises vs off premises..Nevertheless, Ariba needs an accolade for they took the technology leap, kind of…they followed the steps of an early innovator-aka salesforce-, most likely because they liked the economics behind the model: it is the future of technology.

Secondly, going “SaaS” means adopting a different attitude to cash-flow, marketing, promoting, selling and supporting apps. More than ever before, your business app is out to…”Service” your customers…and this is the catch! The most important word in SaaS is not software, but Service…thus turning a technology company onto a service company is a real detox…but can the management lead it forward??

Perhaps, Ariba should focus on sustaining their ability to deliver the services their customers need which entails asking them question, gathering their feedback and co-creating the apps functionality road map.Is it a fair comment to say that for as long as investors (by the way, the hands on investors or money in-out investors?) and analysts feel comfortable Ariba ask their customers what they want and Ariba delivers on it, maybe they will see the value coming out of a browser?

By: Ajay Dawar

Ajay Dawar — Tue, 15 Sep 2009 16:53:33 +0000

What a great post. This sounds like a story of an alcoholic that was able to beat the habit and triumph. I applaud the persistence of the Ariba and Callidus executives to live through the 2-3 year revenue trough and do the hard thing that was right for the market. Both markets were going On-Demand. Ariba and Callidus did what Siebel couldn’t. Interestingly though both markets are relatively smaller as compared to CRM and mostly competed with custom in-house rather than packaged applications that were similarly priced. Also Ariba and Callidus are much smaller companies as compared to IBM, SAP, ORCL.

That said, I cannot imagine companies like IBM, SAP and Oracle to do the same in the BI space. On-Demand software will still be on the fringe in these companies. The are three ways these companies will be able to offer On-Demand alternatives: acquire someone, spin-off and create a separate company or the Larry way (fund the creation of a Salesforce.com / Netsuite). BI is too big a market with too big a revenue impact for these companies to do what Ariba and Callidus achieved.