Service matters for supply chain software

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SAP users are a feisty bunch – last week castigating the giant software house for tardiness in bringing to market a software-as-a-service offering.

A study by the UK & Ireland SAP User Group found that 73 per cent of users thought it has been slow – surely a reflection of the impact that SaaS is having on the software market.

Although, only 17 per cent of those surveyed are currently using SaaS, some 61 per cent believed that their organisation would use it in the future.

The growing importance of SaaS was further highlighted last week by a study from International Data Corporation (IDC) which found that that the SaaS market had worldwide revenues of $13.1bn in 2009 and would reach $40.5bn by 2014 – a growth rate of over 25 per cent.
Robert Mahowald, vice president, SaaS and cloud services research, said: “Enterprise IT plans are rapidly shifting to accommodate the growing choices for sourcing most or all IT software functions.”

In the face of this, it is no surprise that SAP is under pressure to bring an offering to market – as are other suppliers of supply chain software. But these are mission-critical systems and there is an argument for saying that it is better to get it right than simply be first.

After all, John Logie Baird is recognised worldwide for developing the first working television system. But no-one uses his system now – in fact his mechanical system was very rapidly superseded by the electronic system that we recognise today.

It’s an argument recognised by the SAP User Group. Chief executive Craig Dale said: “Hopefully the result is a more robust and compelling offering.”

Nevertheless, the rapid rise in the importance of this market to software vendors is underlined by the IDC report which forecasts that SaaS-derived revenue will account for nearly 26 per cent of net new growth in the software market in 2014.

SaaS might have been growing on the margins until now, but it seems destined to become a core element of supply chain technology – and in a surprisingly short timescale.

SAP slow to embrace cloud computing, say users

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