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Sunday, June 11, 2006

Shai Talk

Shai Agassi is the master spokesman for SAP – very articulate and full of insights. In the recent Software 2006 meet, MR introduced him by saying SAP paid 399 million $ for getting Shai on board out of the 400 million $ that it paid to acquire TopTier . Courtesy of Vinnie came across this interview of his, where he talks on a few important things. Some excerpts with comments and my related views at the bottom:.
Anwering a question if ondemand is a trendy and a threat to SAP – he outlines three consumption models at the end.

- The first model is where I buy, I install, I modify, I maintain it. It's my system. So I'm independent.
- The second model is the on-demand model. I sign on to the program and I trust you to take me in the right direction. And I trust that the software is not going to die at the end of every quarter.
- The third model is somewhere in between that I'm calling the managed appliance model. I want my box, but I want you to manage it for me and so you give me the software. You tell me when there's a wave of upgrades. If I decide to turn it on or off, it's my decision. But I don't need to manage it. You manage it for me.
It's not going to be a binary decision for a company - do I go to Model A, B or C. It'll be a hybrid across all these models.
However he thinks that make on-demand can bemade secure and reliable. The real issue is again that transportability. Can the on-demand system be taken after two years where one paid for it monthly, move it on premise, make changes and swith to a different model of ownership. Or is that code designed to be shared with lots of other people and can't that really be taken to on premise model? Claiming that the hybrid approach is still not solved by the pure play on-demand sellers, he adds that SAP has cracked this part already. He thinks that on-demand is trendy, may not disappear but does not think it takes over the world and as such should be seen as one more consumption wave. Shai also believes that smarts are equally distributed around the whole world. Saying one can't find geniuses only in one geographic location - Innovation is equally distributed around the world. Passion and drive are equally distributed around the world. He also believes that the silicon valley is secured for a very, very, very long time, because it's got this confluence of early adopters and early access to technology. It also has a rich network of headquarters and smart people.

Talking of SaaS, I wrote more than a year back that overwhelming issues impede adoption & the broken model of the enterprise software industry is complicating things towards adopting newer things (Part of the reason for SAP to keep gaining marketshare). As I wrote earlier, a careful examination shows that well evolved industries move towards a decentralized/tiered model – currently the enterprise software industry is highly integrated vertically and its ecosystem is not well set today. Shai's talk is indeed interesting. Must read for all interested in enterprise software industry

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"