feature lists are futile, SaaS is a game changer

None of these vendors bring anything new to the systems management market other than acquired virtualization technology. For the most part, its still the same old legacy client / server technology. Given this list, the big four have nothing to fear if the best the challengers can do is deliver another check box feature. Meanwhile, Microsoft is still dealing in slideware futures. Its 2008. Seriously, are they still only managing Windows environments?

There will need to be a tectonic shift in market forces for the big four to feel any real threat to their business. There must be a market change in the technology, the economy, or IT purchasing and consumption habits.

The current combination of SaaS, cloud computing and the global financial crisis just might be the catalyst. SaaS eliminates issues customers have with licensing, installing, customizing and upgrading client/server technology. Not to mention, SaaS simplifies the way customers buy and consume software, which is becoming more of a requirement as budgets are further restrained. SaaS licensing means the customer only pays for what is used with no vendor lock in. SaaS vendors have a vested interest in keeping the customer happy so that they renew their subscription.

So why don’t the big four just roll out a SaaS offering? They are trying but it is extremely difficult for incumbents to re-architect decades-old code. Partial efforts have been made with warmed-over ASP models and Web-front ends to old technology, but this is not SaaS. Changing a legacy business model can be just as difficult if not more difficult than trashing legacy code and starting over. Public companies have a lot to consider – how will subscription pricing effect revenues, what happens to maintenance streams, how do you effectively change sales compensation plans, how do you avoid cannibalization?

Disclaimer – I work for Service-now.com, the pioneer of on demand IT service management. We are gaining first-hand experience in replacing the big four on a regular basis.

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