News this month that Amazon is about to acquire French package delivery service Colis Prive is further evidence that the boundaries of e-commerce are in a significant state of flux. While Amazon is reaching closer to the customer and investing further in the very non-virtual world of warehousing and delivery, traditional players such as Visa and UPS are extending their reach into the e-commerce value chain from the other direction. From a merchant’s perspective, the move is very much towards a best-in-class approach to solutions, with Amazon among the very few that are in a position to own versus outsource, given the scale requirements needed to deliver many of the capabilities that are proving to be high-value differentiators at the service levels the marketplace is demanding.
E-commerce today is a multi-trillion dollar market. Global business-to-consumer e-commerce transactions were over $1.6 trillion last year while business-to-business transactions were over $5 trillion. As such, the e-services industry continues to explode, and we’re seeing some notable shifts in what it takes to win as a service provider in this vast and cut-throat market.
Last month we examined the evolution of connected applications to integrated applications, specifically within the Human Capital Management software sector. In this article we take a closer look at the underlying technologies that are enabling an integrated approach, and what types of applications might benefit from such approaches in the immediate future.
In the world of Enterprise Software, on-premises solutions are becoming rare.
The economies of scale that comes with the cloud combined with the innovation
and agility of fully SaaS ISVs has led to a world of primarily SaaS-based enterprise
applications. However, there are vestiges, particularly with large conglomerate ISVs
(Oracle, IBM, Microsoft, SAP), of classic on-premises solutions and deployments.
And why all Applications Software Companies will soon be SaaS
Our Thesis: We spend a lot of time helping both companies and investors think through SaaS Transformations. Our general thesis is that SaaS transformations represent a significant opportunity for investors and operators alike to capitalize on the growth opportunities, efficiencies, and valuation differential experienced by SaaS companies. This thesis is comprised of the following supporting arguments:
Why Multi-tenancy is more than just a technology strategy
Recently we have run across a slew of inquiries regarding multi-tenancy strategies. A little research indicates that the definition of multi-tenancy has evolved quite a bit since it was first applied to SaaS models over 10 years ago. Pure SaaS players often use their adherence to multi-tenancy fundamentals as a competitive differentiator when competing against non-SaaS or even hybrid SaaS alternatives in the marketplace. A look at the evolving use of terminology and its most recent connotations has yielded somewhat surprising results.
PaaS (Platform as a Service) is a new name for an old product category. PaaS vendors are springing up everywhere, providing application stacks, middleware, application development tools, and provisioning and scaling capabilities for cloud-based applications. The traditional players come from a place where they are trying to adapt their traditional on-premises bases to the cloud without losing significant market share, while newer players are trying to promote new application development and deployment paradigms for both enterprises and ISVs. Traditional players include the likes of Oracle, Microsoft, SAP, IBM, and even Progress Software, while the newer native breed includes startups such as Engine Yard, Zoho, and CloudBees as well as internet giants such as Salesforce.com and Google.