SaaS and PaaS Actions

SAP AG revealed its hybrid software and software-as-a-service (SaaS) solution for large customers. Meanwhile, Salesforce.com Inc unveiled new platform-as-a-service (PaaS) and SaaS offerings at its Dreamforce Europe Conference.

Focal Points:

• SAP announced on-demand "components" that integrate with a customer's existing SAP ERP suite. These components that are to be available next year are targeted at large companies according to the company. This is a shift from SAP's current SaaS solution, Business ByDesign, which is aimed at mid-market companies. The components will have "out-of-the-box integration" with the other SAP applications a customer keeps and manages on-site and are not intended to be used as standalone software applications, the company stated. SAP will host and manage the components but the company has not determined if it will price it as a subscription service or as licensed software or both. Collaborative supplier management is expected to be one of the earliest components that will ship in 2009, according to the company.
• At its European conference Salesforce.com unveiled more than 50 new SaaS customer relationship management (CRM) features in sales, marketing, customer service and partner management. In addition, Salesforce Content will add new features in global language support, customer and partner portals, and content analytics that will provide a window into the effectiveness of corporate materials. New capabilities for Salesforce Ideas will be multiple communities for organizing and segmenting groups, customized fields that allow for exposing and manipulating data directly in the original postings, and the inclusion of Salesforce Ideas in the Saleforce Partner Portal. All of these features will be part of the Salesforce Summer '08 release, scheduled to be released in June.
• At the same conference Saleforce.com announced that its new Visualforce User-Interface-as-a-Service is now available to all its customers with the Salesforce Summer '08 release. As a key part of the Force.com platform, Visualforce gives developers complete control over the Salesforce user interface (UI) so that they can create any UI for any Force.com application and extend it to virtually any device.  The company also announced the availability of Visualforce Components, new Visualforce technology that gives developers the power to add, remove, and reassemble the basic building blocks of the Salesforce UI. With Visualforce Components, third-party ISVs and users can manipulate the components of the Salesforce UI, add their own custom-built components or bring in ISV-built components to quickly build business applications on Force.com that are as easy to use as the best Web 2.0 applications, the company claimed.

Experton Group believes the PaaS (also known as cloud computing) and SaaS models work well for Salesforce.com but SAP is still struggling to make its SaaS model compatible with its existing licensing and servicing models. Technologically these architectures dovetail well with service-oriented architectures (SOAs), but it is the business models that traditional vendors have difficulty rationalizing. As Experton Group has pointed out in a number of previous reports, SAP is having difficulty rationalizing its new SaaS model with its internal and partner models and is wresting with a way to move into the cloud computing world without damaging existing business relations and revenues. Experton Group does not see this being resolved any time soon, as this is not a technical issue and the company does not want to damage its legacy business. On the other hand, Salesforce.com has a crisp vision and architecture that is resonating with businesses of all sizes and with partners such as Google Inc.  IT executives should develop their own strategies for cloud computing and SOAs, independent of strategic partners and providers, so that they can ensure their business requirements and strategies are properly addressed and outcomes are not swayed by vendor preferences.