In the Business Apps Casino, change is afoot. For a long time, one table – software-as-a-service ERP – attracted a limited number of players and fans. However, over the past 12 months, an increasing number of ERP vendors have lined up to place sizeable SaaS bets, while more potential customers are paying close attention to the gambles those vendors are making.
In Forrester ERP inquiries, it’s now the norm for clients to ask us about SaaS ERP. In fact, it’s unusual to field a call where SaaS isn’t mentioned. Firms may be actively considering a future change in deployment model or simply wanting to kick the tires on SaaS ERP adoption, pros and cons, and comparisons with on-premises ERP. They also seek more information about SaaS ERP market players and likely future entrants. In general, what’s changed since a year ago is that companies want to include SaaS ERP options in their assessments.
Each ERP vendor’s SaaS bet differs somewhat from those of its peers, determined both by the type of customers it’s aiming at and architectural concerns. However, there are some shared themes:
Repurposing existing apps. Some ERP vendors began their SaaS endeavors with apps targeted at small and midsize businesses. They’re now working to deepen the functionality of those apps to appeal to a broader, more enterprise audience. There are two key approaches: 1) expand the scope of an existing SMB product and aim it up market; or 2) carve off functionality from a SaaS midmarket apps suite (while retaining that suite) and create a new enterprise app.
Growing up in the UK, one of the TV shows I remember watching featured Australian artist and musician Rolf Harris. As each show drew to a close, Rolf would quickly set to work filling a large empty board with seemingly random brush strokes of different colors. About mid-way through his painting, Rolf would turn to the studio and TV audience and ask with an impish grin, “Can you tell what it is yet?” As he continued painting, the strokes would finally resolve themselves into a recognizable image like a portrait or a landscape.
When it comes to revisiting billing software and established practices, many firms are reaching that middle phase. While they have the sense of something starting to take shape, they don’t yet have any clear sense of what the ultimate endpoint will be. Is that your experience with your organization and the industry it serves?
Firms are simultaneously trying to anticipate which types of billing will resonate with prospective and existing customers, while also responding to what their peers are offering. Frequently, one or more competitors in a given industry have emerged with a fresh approach to packaging and charging for products and/or services, which often involves some type of subscription billing. However, what tends to remain unclear is whether the billing type in the ascendant is the ultimate market destination or just a midpoint on the way to a completely different billing model.