InfoWorld TechWatch | InfoWorld | SaaS is still unable to deliver what the enterprise really needs - business processes that are competitive differentiators | November 9, 2005 03:09 PM | By E. Schwartz
Kagerman appears to reinforce a point I've been trying to make in my coverage of companies like Salesforce.com that offer software as a service [SaaS] solutions.
Salesforce and other SaaS-based companies offer meat and potatoes solutions for standard business operations. However, by using multi-tenant architecture which requires volumes of customers on a single instance of the database, it cannot give companies the kinds of differentiators they need to increase sales or gain market share.
Andy Mulholland, CTO at Capgemini calls it the 80-20 rule. SaaS does 80 percent of what every company needs. But that final 20 percent that sets a company apart from its competitors cannot be provided by SaaS technology.
I hear this (and even think it) from time to time. But it remains true that a huge chunk of what many businesses do is undifferentiated (and non-differentiating) from business to business and even industry to industry. Abusing the 80/20 rule even further, I'd guess that 80% of the processes inside most businesses could be served by an unmodified, one-size-fits-all solution, assuming the business could let go of their old ways of doing things (ie, change the people element of the process to match the technology).
No doubt Kagermann's right, but it's probably dangerously easy to overstate the number of business processes (broadly defined) that require the kind of customization (even if only to the "20%" level) he's talking about.