• September 1, 2007
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Software, On and Off

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Software-as-a-service (SaaS) has been the bandwagon onto which the business-software industry has been jumping for several years now, and it's become increasingly harder for new vendors to get a taste unless they have an on-demand component. But a new trend--or possibly a new spin on an old one--is on the rise: SaaS vendors making more of a point to tout their offline work functions. BackWeb's recent release of offline capabilities for both Salesforce.com and Oracle's PeopleSoft is just one instance of the old offline standard being reapplied to today's online hype. Add to that Google's June announcement of its "work offline" Gears initiative, and the July news that social networking powerhouse Facebook had acquired Parakey, a start-up that had been developing, according to Parakey's home page, a hush-hush "platform for building applications that merge the best of the desktop and the Web." Where once it was critical to include "working offline" as part of a business continuity plan, mainly because of slow or unreliable Internet connectivity, offline is now reentering the mix as a valuable added function. So, is everything old new again? "Ubiquitous connectivity isn't as ubiquitous as we might think," says Jeffrey Kaplan, managing director of THINKstrategies. "One of the knocks versus SaaS is that it requires the user to be online. But even old ERP systems needed online presence as well, at least in the sense of being connected to the internal corporate network." Kaplan says that major players like Salesforce.com have been accommodating customers in offering offline augmentations to online service. "But it's not their core message, and [they] don't advertise it strongly," he says. "As time goes on, companies will acknowledge it more publicly." There's another view of why offline functionality is getting such strong play lately, of course. "Those in power want to stay in power," says Jay Noble, president of saaspoint North America, a global consultancy with a self-described "100 percent focus" on Salesforce.com implementations. "Companies like Oracle and SAP are heavily invested in on-premise systems, and are pushing them; their SaaS efforts have been clumsy at best. Microsoft's efforts have been Outlook-centric. All of these companies have purchased the bulk of their SaaS component rather than developing it in-house." Noble says that adding SaaS functionality through acquisition isn't the best way to go. "Game-changers come from outside the established powers. A few years ago, Salesforce.com was such an outsider, and so was NetSuite," he says. Changing the game to full-time connectivity might not be something the industry is ready for just yet, despite the proliferation of on-demand hosted apps. "I'm noticing a number of SaaS vendors who, six to nine months ago, were positioning themselves as revolutionaries--an alternative to Microsoft Outlook and other products--who now are softening that message, and acting as a complement to Microsoft," Kaplan says. Meanwhile, Steve Ballmer, Microsoft Corp.'s chief executive officer, confirmed at a recent conference (see previous page) that the software giant has now opted for a middle-of-the-road approach called "software plus services" that differs from SaaS--an approach Kaplan calls "additional functionality online." Mobility, he adds, "is a big part of this--not just the actual mobile or wireless component, but the need to stay in touch without being connected." But the day is coming when there will be no noticeable difference between online and offline--or when there is no such thing as "offline" at all. "In the short term, yes, there's a definite place for offline utility for online applications," Noble says. "In the long term, not really. The main issue is connectivity, and that issue is evaporating at an increasing rate."
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