People are stupid. History has shown it repeats itself, and people make the same mistakes. ~Harry Debes, CEO of Lawson
That was a pullquote from an interview with ERP software company Lawson’s CEO Harry Debes. He was answering the reporter’s question on whether software companies had learned anything from previous attempts at making Software as a Service models work. Clearly, he is not a fan of Salesforce.com, a competitor and SaaS poster child.
Debes makes an enthusiastic case for the merits of traditional software sales over the distributed revenue model of SaaS, which he claims prevents companies from making big returns quickly. He may be right.
My contention with his argument focuses on his well worn and rehearsed counter claim that customers of traditional software vendors are free to use a software package indefinitely once the upfront investment is paid off, saving them money over time. Does anyone still believe this fable? Are we no smarter than we were in the 90’s, or are CEOs simply that far out of touch.
When financial institutions start falling, the press tends to shed light on their spending habits. If what Mr. Debes is putting forth were true, then surely the 138 year old Lehman Brothers investment bank would be one of the big benefactors to those savings over times. And yet, they spent over a billion dollars last year in new software. Surely you would expect a financial institution to exemplify the ideals of conservative spending, find any way possible to save money while delivering on their customers needs. Yet I know that most financial companies spend large percentages of their revenue keeping up technology. For companies of lesser means, there are still forced upgrades, maintenance agreements, obsolescence, migratory requirements that all lends force to the gale that blows up the costs of keeping companies running. Has any publically traded company reported in their SEC fillings a year after year decrease in the spending of technology? Should we be so blind as to assume that hardware, network connectivity, desktops, communication equipment all required new, expensive versions but that the software remained untouched, free from budgetary expenditure?
We now all know the truth masking the lie. Traditional software would all be free, if we never needed to upgrade. Software as a Service may not reap those immediate returns that you are so eagerly seeking, sir, but do not attempt to misdirect the truth that as long as innovation is a competitive advantage and progress proceeds in a forwardly direction, we will have to pay someone to keep us in the game.
It is unfortunate for the Harry Debes of the world that corporations are slowly but inevitably being inflitrated by open minded technologiest who are apt to question the status quo. You see, Mr Debes, I believe that people are not stupid. We do and will learn from our mistakes. We have already learned some lessons the hard way. Should you be sitting across from me in your next ERP sales call, I will be more than happy to fill you in on our progress so far.
(photo by tanakawho)