This is a reference guide to what each of the major software vendors are doing in the SaaS space. I won't be sensational and predict the demise of any of these vendors. I think it's far too early to tell how the future will pan out. I can say subjectively that I am impressed with Larry Ellison's pioneering efforts in the space. I can also say that SAP is currently the media whipping boy in the space, with delays in their Business ByDesign program costing them credibility. But this revolution is far from done, so let's not waste time trying to speculate the distant future.

Note: I am now an employee of Oracle, via the BEA acquisition

Oracle

Strategy

Larry Ellison, Oracle's CEO, has be talking about on demand software for a long time (10 years I believe), so it is clearly on his radar. In fact, he was an investor in both SalesForce and Netsuite, showing his belief in the business. Charles Phillips, Oracle President, has also spoken to the topic.

Larry and Charles Phillips have articulated a strategy on how Oracle can deliver SaaS and retain its focus on its core market (large enterprise). Larry does not intend to make a major push into the lower end of the SMB market.

• Larry Dignan interviews Larry Ellison: he discusses why SAP's move downmarket is a big mistake, explains Oracle's strategy
• Larry Dignan: Does Larry Ellison have the best SaaS strategy?
• Dan Farber: Charles Phillips talks about Oracle's On Demand business

Current SaaS Initiatives:

Oracle supports the following SaaS initiatives:

• On Demand Managed Applications
  • A SaaS offering, with Oracle hosting its applications on behalf of customers
  • It is a successful program, on track to gross $700 million this year, growing quickly
• Oracle SaaS Program
  • Technology and business support for SaaS ISVs
  • Partner program with many ISVs already signed up
• Oracle SaaS Platform
  • A product offering to help ISVs build and host their own SaaS applications

Weaknesses

Critics have primarily focused on the lack of end-to-end multitenancy in the On Demand business. The argument is that Oracle will not be able to provide a cost efficient solution unless the entire stack is multi-tenant.

• Phil Wainewright: Oracle’s misconceived SaaS strategy

Further reading:

• InfoWeek: Oracle Plans Utah Data Center To Support SaaS Business
• Oracle's SaaS Blog
• Aberdeen Group positions Oracle as the leading software giant in the SaaS space
• Phil Wainewright is excited about Oracle CRM On Demand
• Oracle CRM On Demand summary

Microsoft

Strategy

At an architectural level, Microsoft is promoting an S+S model, instead of a pure SaaS model. S+S stands for Software+Services. The idea with this is that Software as a Service is most useful when pared with local software (like Office). Microsoft obviously has a major incentive to make sure desktop software is not left behind in the SaaS world, so this makes for good strategy. Whether consumers will buy into it is another matter. See the weaknesses section below for more on this topic.

• Mary Hayes Weier:  Steve Ballmer explains the S+S strategy
• Springboard Research: Microsoft updates its SaaS strategy

Current SaaS Initiatives

The following is a selection of  the SaaS offerings from MSFT:

• SaaS On-Ramp Program - aids ISVs in building out SaaS solutions
• Microsoft Online Services - its businesss applications ondemand offering
  • Hosted versions of Exchange, Sharepoint, and LiveMeeting
  • Dynamics CRM Live - hosted version of the Dynamics CRM offering
• Windows Live - a family of hosted offerings for the small business/consumer
  • Live Mesh - touted as a SaaS solution, it currently is just a file synchronization service
  • Messenger (IM), Windows Live ID, Virtual Earth, Search, Spaces (blogs), and Gadgets
• Architect Center - provides architectural guidance for ISVs
  • Lead by Gianpaolo Carraro and Fred Chong
  • Have produced a SaaS reference application, LitwareHR
  • While some of what they write is MSFT centric, most of the articles are generally applicable
  • As an architect myself, I admire the work that they do

There are more services listed here, but not all are really SaaS.

Weaknesses

Critics contend that Microsoft will struggle to succeed in the SaaS market while preserving its existing franchises. It already stumbled with its business model when a European partner began offering Office as a service:

• Phil Wainewright: Microsoft in a twist over SaaSy Office deal
• Phil Wainewright: Microsoft disappoints on SaaS. Didn’t you see it coming?
• Larry Dignan: Microsoft to SaaS: We (are going to someday) have you surrounded
• Barb Mosher: Will Microsoft Office Have Go To SaaS to Survive?

Its Office franchise is already being eroded by service based offerings (Google Apps, Zoho, Adobe, etc). Somehow it has to prevent Office revenue from being decimated by pure SaaS players.

See next page for IBM, SAP & Intuit 

• EMC Forms Business Unit for New SaaS Offerings
• Symantec Launches Two SaaS Offerings
• Beyond SaaS: Bungee Labs Introduces Platform-as-a-Service (PaaS)
• The SaaS Superhighway: Telecoms and Software Are Converging
• Microsoft Broadens its SaaS Push
• SaaS - The Right Business Model for Open Source?
• SaaS Single Sign-On: It's Time for a Lighter Approach
• SaaS Platforms For ISVs and Who Wins?
• Why Open Source Java will Win SaaS Platform Wars
• Cloud Computing Secret Development Effort Going On at Your Company Right Now