Corporates Insight suggest customer (CRM) and employee-facing apps (esp HCM / talent management) remain at the forefront of application spend and we see broad based evidence of better demand. Inputs suggest financials, manufacturing and supply chain are not moving to cloud. The three largest traditional apps vendors (Oracle, SAP and Informatica) are now all paying reps neutrally for SaaS vs. perpetual license. We expect this will have the inevitable impact of driving more core apps business to SaaS.
System Integrators (SIs) and customers suggest that with customer and employee-facing apps being the focus, UI and mobility are increasing priorities, driving decisions in deals. For example, Informatica continues to aggressively invest in its front-end design and is seeing correlation to success in areas with modern UI. Salesforce1 was highlighted as a driver of demand for mobile apps on CRM’s platform, in some cases expanding user counts.
Inputs around FullForce [Sales Force Product] vertical partner program suggests an acceleration
of activity in existing strong verticals (wealth management a key example) and some new traction in recent focus areas (manufacturing an example). We expect to see some of this large deal activity show in the July report. Partners suggest that while there is some increase in sales role changes associated with this vertical positioning, the company seems to be managing through it.
Oracle is leading with SaaS in some areas, such as CRM and HCM. There is the dual effect of
introducing Oracle’s SaaS products, but also requiring a migration to adopt, leaving the customer to look at alternatives. If this accelerates, we could see more headwind in the core Peoplesoft and Siebel installed bases. Lastly, with there being significant overlap between the prior Eloqua and BigMachines partner base and Salesforce.com, we see these franchises struggling to grow in instances where partner involvement is important.
Inputs suggests SAP remains more sheltered from exposure to SaaS demand in the core, given smaller CRM franchise and HCM app that is tied up in monolithic applications suite. Early inputs on simplified financials suggests first pocket of demand is among subsidiaries of larger companies that are still running legacy ERP systems that are different than the parent. SAP has a significant opportunity to convert these customers, although history suggests this will take some time.