MSymonds

Lawson's Harry Debes: SaaS Industry Will Collapse in Two Years

Debbes is in denial. He is desperately trying to stave off the inevitable because he cannot get from A to B with all that baggage and legacy code. Technology changes and allows/requires changes to the business model.

Timesharing went out of fashion because computers became more affordable and less scarce. Application Service Providers were a failed iteration of SaaS. In fact, many legacy software providers like QAD and Epicor are trying to revive the old ASP model to compete with true multi-tenant SaaS solutions that are winning in the marketplace. They are saying "me too" and hosting single-tenant instances in third party datacenters. That only adds costs and complexity to the vendor-customer relationship.

Several of Debbes' comments are true but cut the other way. Yes, the application has to work for the customer. Multi-tenant systems built on modern technology can deliver changes to the market faster than a company that has to worry about versions, different databases, operating systems, etc. Enterprise applications are sticky. Good SaaS solutions will bring superior profits over time. Customers will stay with them because the software evolves with them.

I run a fast-growing, privately-held SaaS ERP provider that wins against the established crowd every day - not because it is SaaS, but because it is a better product - and it gets better every day.

Customers may not be asking their provider for SaaS, but once they learn about it they see that it just makes sense. There is money to be made in SaaS. It will be at the expense of companies under the leadership of people like Debbes.

Mark Symonds
plex.com
Plexus Online