We've blogged a few times about SAP and its relationship with the Cloud. In October, SAP announced it would stop developing it's Business byDesign application, the only true multi-tenant cloud-based accounting product in its line. We saw this as an indication of how the traditional on-premise accounting and ERP software companies were struggling with the Software-as-a-Service trend. Well, here's another indication of this struggle: back in May, Lars Daalgard left the SAP executive board.
He hadn't even been there a year. Daalgard is the founder of cloud-based SuccessFactors, a company SAP absorbed to burnish its cloud credentials in the human capital management (HCM) industry. He's known for his passion and enthusiasm around SaaS software and the movement away from on-premise legacy systems. The aquisition of SuccessFactors was clearly an attempt to move into the cloud arena, but Lars' departure indicates a bump in the road.
Too Much Invested in the Legacy Model
Could it be that the enormous industry surrounding on-premise implementation, consulting, upgrades, and integrations is just too large and has too much momentum to change direction? This the suspicion of HFS Research, who found that between SAP and Oracle, there is a $255 billion "ecosystem" of IT expenditures worldwide, $156 billion of which is around SAP alone.
It's becoming more and more clear that SaaS is where ERP systems are headed AND that the old guard aren't up for the challenge. For more information about how cloud-based accounting trends can work to your business' advantage, please fill out the form below: