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4/17/2007
10:09 AM
David Linthicum
David Linthicum
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Are Consultants Pushing Back on SaaS…Quietly?

Blogger Ann All recently questioned the commitment to SaaS by the larger consulting firms saying, "software-as-a-service could be a good thing for folks like consultants and systems integrators - unless it ends up putting them out of business." Indeed, SaaS could lead to fewer consulting dollars, so larger consulting firms may be pushing back on SaaS to serve their own interests.

I came across this post by Ann All, questioning the true commitment to SaaS by the larger consulting players. I think it's a good point to consider.

"So, software-as-a-service could be a good thing for folks like consultants and systems integrators - unless it ends up putting them out of business."

In essence the use of SaaS could lead to fewer consulting dollars, and thus the larger consulting firms could be pushing back on SaaS to serve their own interests. Clearly, for SAP, Oracle, and PeopleSoft (now a part of Oracle), planning, installation, and customization projects of days gone by were big bucks and took years to implement in some cases. Now these firms are finding that their clients can get up and running in days using subscription-based services such as Salesforce.com, RightNow, or NetSuite.Indeed, none of the larger consulting organizations lack the political correctness to outright put down the SaaS movement. However, you can't help but think that this is not a good thing for them, and perhaps a topic at the latest partner meeting.

"Still, some observers question their commitment. 'It will be extremely difficult for the major consulting firms to back SaaS in a big way as they are so dependent on large software implementations,' says the chairman of a consulting firm that specializes in SaaS in the Computer Business Review article."

This is very much like the EAI movement from the late 90s, which I was personally involved with. When software was created that could integrate computer systems without a lot of programming code, the large consulting organizations questioned their own interests when promoting that technology. Indeed, it was not until their clients demanded it that many of them created practice areas. I remember a partner of a larger consulting player telling me at a 1999 conference, "Your book cost us 10 million dollars this year." (Referring to my EAI book, published in 1997.)

The larger message here is that you can't stop progress, and it may cost you business unless you're able to adapt.

"After all, according to a recent McKinsey survey, the number of CIOs considering adopting SaaS solutions rose from 38 percent in 2005 to 61 percent last year."

Moreover, when you consider reusable services, service virtualization, and applications acquired as needed as the wave of the future, it could be a lean few years for the large consulting players out there, if they continue as usual. Instead I would suggest that they consider other areas that are complimentary to SaaS, and perhaps promote the use of this technology. If you don't, you'll find that your clients will.

Application integration and service oriented architecture expert David Linthicum heads the product development, implementation and strategy consulting firm The Linthicum Group. Write him at david@linthicumgroup.com.Blogger Ann All recently questioned the commitment to SaaS by the larger consulting firms saying, "software-as-a-service could be a good thing for folks like consultants and systems integrators - unless it ends up putting them out of business." Indeed, SaaS could lead to fewer consulting dollars, so larger consulting firms may be pushing back on SaaS to serve their own interests.

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