Kagermann On SaaS, Opensource & Business

Close to Shai Agassi dismissing possibilities of innovation powered by opensource we see Kagermann commenting on the topic – In an interview with Infoworld, he states his belief that business applications are not a field for open source. He sees that the Linux operating system is well defined and developed by a community used to programming. Applications are another story, particularly business applications. Designing applications to run business processes requires very strong governance and rightly expresses doubts if a community can achieve this. Strong guidance and expertise are needed to convince customers that the way you design business applications is the right way for the future. Read my recent note titled – dim view of opensource here.

Some other good points made by Kagermann -

“Value-based pricing is not about going to customers and asking them to measure the benefits they get from using our software and then having them give us a certain percentage of these benefits. This won't work. No customer will accept this method of pricing because we would be essentially asking them to share internal information about their business success. What we plan to offer are different price tags on different modules depending on their impact on business success”.

“Companies will compete more on business model innovation, which is empowered by IT. The question many of them ask is how they can differentiate themselves from their competitors? I tell them that such differentiation can't be achieved with today's architectures without considerable investment and sometimes modification to applications”. Also read his views on SaaS which more or less ties up with what I wrote not a very easy path lay to embrace Software-as-a-Service model as overwhelming issues impact adoption. Also read this this as well.