Check out the below analysis where Appirio describes the impact of On-Demand on the Services industry. It compares how application providers like salesforce.com are disrupting on-premise applications (like those from SAP and Oracle), and the similar impact on Services firms ‘hooked’ on on-premise application services multiples.
Excerpt from: “Services 2.0” – A New World for System Integrators. Specialty Solution Providers & Social Networks Will Dramatically Alter the SI Landscape, Gearing Up the Enterprise for Web 2.0 and SaaS 2.0 [Read Full Analysis]
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Services 1.0 |
Services 2.0 |
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Dominated by Accenture, IBM, Deliotte, Bearing Point and Cap Gemini
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Led by newly emerging specialty solution providers such as Astadia,Appirio, Bluewolf, Okere and Theikos
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Overly broad focus, with partnerships with hundreds of competing on-premise vendors
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Sharp focus on accelerating on-demand in the enterprise – taking a strong position that advocates for market-changing solutions
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Multi-year waterfall-style mega projects
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3-9 month iterative micro projects
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$1 in software licenses = $10- $15 in services
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$1 of subscription fees = $2-$4 in services
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“Tell me” approach. Project teams that fill binders with screen shots, process diagrams, etc. which are read once, then collect dust
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“Show me solutions”. Productized SaaS prototypes and working applications launched in weeks
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Overall opportunity shrinking as companies rely less on SAP, Oracle, and other on-premise vendors
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Opportunities growing rapidly, derived from specialty business, technology and process services to extend and integrate SaaS solutions
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Complex and costly hardware, infrastructure and integration software
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No hardware or infrastructure required, integration via open APIs and real-time mashups
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