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Viewpoint -- There's a Gathering Storm on the Horizon and SaaS is at its Center

Watch the financial results and growth numbers of SaaS companies vs. those with only traditional, on-premise solutions.

By Mark Symonds, CEO, Plexus Systems, Inc.

Aug. 6, 2008

Wang, Data General, Digital Equipment Corp., Prime, Burroughs, Perkin Elmer.

Think about it. When was the last time you heard any of those names? The late 90's -- maybe?

The point is, today they're GONE. "Gone, like Frank Sinatra. Gone, like Elvis and his Mom," to quote the band Switchfoot.

And they're gone because they didn't change with the times. They all had winning formulas in the eighties. They didn't adapt their technologies or their business models or, most importantly, their vision of computing's future. They didn't see the writing on the wall, and now they're gone.

A Storm is Coming...

As I look at the software industry today, particularly in the ERP market space, I am convinced we are in the same position that the entire computer industry was during the 1980s. We are headed for that same kind of a shakeout again.

I am seeing many companies who have not invested in their technologies beyond first or second generation. They were the big names of the '80s and '90s. They have been coasting along just by putting a new .Net front end on a very old data structure and outdated, cumbersome business logic.

That's just lipstick on a pig. They have not moved ahead, and now the ground is shifting under their feet. The landscape is changing dramatically. Totally new names are appearing -- like Plexus, Salesforce.com, Netsuite, RightNow, Ultimate and a host of others.

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