Business Strategy for Software Executives
May 12, 2008
Winning the Emerging Platform Wars
A new generation of SaaS-driven platforms is redrawing the enterprise software battleground. Here’s what vendors must do to emerge victorious.
By Abhijit Dubey, McKinsey & Co.
The Software-as-a-Service (SaaS) industry continues to grow rapidly. Over the past three years, revenues of the top 20 SaaS companies grew at close to 50 percent and 2007 saw several new IPOs in the space. The industry has also matured significantly in recent years. Both vendor offerings and business models have become more robust, while SaaS adoption has spread from small and medium businesses (SMBs) to large enterprises. Estimates indicate that the SaaS market could grow to more than $35 billion over the next fi ve years, with signifi cant penetration of SaaS in all major software categories.
The success of SaaS is driving broad change across the software industry. One of the most signifi cant implications of this broad-based change is the emergence of a new kind of software platform. The increase in SaaS application consumption and development is driving the need for a new set of platform technologies built specifically to support SaaS.
As with the evolution of technology platforms in the past, we are beginning an exciting time for the industry, as a host of megavendors and startups engage in the emerging SaaS platform wars. Industry analysis shows several factors will drive platform success and enterprise software vendors incorporate these into their offerings in order to win this next-generation battle.
Now that the current deal is dead, Tony Baer of On Strategies looks closer at why it died and what might happen next. Get the scoop in this post to the SandHill.com Blog on M&A.
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Innovation Lessons from Pixar
An interview with Oscar-winning director Brad Bird finds that stimulating the creativity of animators has a lot in common with developing new product ideas or technology breakthroughs. Get a new perspective on the innovation process in this article from The McKinsey Quarterly.
News Update: Open Anxiety
Sun relents, oCERT appears, India provides incentive, and more software news of the week. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.
Poll: Who Wins the Platform War?
In the battle for SaaS platform leaders, who will take the lead?
Last week, readers speculated on what kind of revenue lift software companies can expect from improved management strategies.
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“I have always found that plans are useless, but planning is indispensable.”
Courtesy of Malcolm Kusher, The Kushner Group
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