SaaS Versus SaaS

How to tell when you've arrived, SOX pros and cons, and more service with your software.
Posted September 12, 2006

Michael Hickins

I attended a technology industry conference not too long ago and watched a group of executives from software-as-a-service (SaaS) vendors patting each other on the back and taking pot shots at their on-premise rivals.

It was eerily reminiscent of the early dot-com days.

That was when e-commerce upstarts, conspicuous in their casual business attire, banded together at podiums at retail industry conferences to tweak buttoned-down executives of staid brick-and-mortar retailers with talk of bringing fun, convenience and 24/7 service to the shopping experience.

I still remember the silence when Peter Neupert, then CEO of, told Longs Drugs CTO Brian Kilcourse point blank, "People hate your stores."

But then the distinction between virtual and physical stores blurred, the Internet bubble burst and the surviving e-commerce players established themselves for the long haul.

As a result, old-fashioned competition disrupted the mutual admiration society among e-commerce upstarts.

Today, the same easy camaraderie that existed among SaaS vendors seems just as distant.

Rather than attacking the business model of on-premise ERP vendor SAP, for instance, NetSuite is now reserving some of its choice words for fellow SaaS vendor

The on-demand ERP vendor, which is incidentally laying the groundwork for an initial public offering later this year, called out for not having an on-demand ERP solution of its own.

"A CRM application without ERP integration is basically useless. CRM without ERP is like ham without eggs, Sonny without Cher," chirped Mei Li, a NetSuite spokesperson.

Meanwhile, Robert Jurkowski, CEO of on-demand financial applications vendor Intacct, took a swipe at NetSuite.

"NetSuite is becoming the SAP of the mid-market," he told me.

Ouch. In their world, that is the worst kind of insult.

Jeff Kaplan, managing director at THINKstrategies, thinks the infighting among on-demand vendors shows how far SaaS has come.

"Before, they were training their guns at traditional players, and now they're also trying to differentiate themselves from their peers," he said.

Ready or not for SOX

If and when NetSuite becomes a public company, it will have to deal with what seems to be the bane of every public company these days: proving that its internal controls are up to Sarbanes-Oxley spec.

According to Employease co-founder Mike Seckler, that daunting prospect is one reason the leading HR solutions SaaS vendor is eschewing the public markets.

Ironic since the rigors of regulatory compliance has done quite a bit to bolster revenue growth at software companies like NetSuite and Employease.

Ironic also because, according to more than one observer, SOX has actually helped a lot of companies get their management acts together, generating greater efficiencies and improved productivity.

But after all their stock-option shenanigans, tech companies in particular have no kick coming. And the SEC is easing up on smaller companies, too.

Software as a service, as a service is a New York-based on-demand document printing company.

Their pitch: if you send them a document by 9 p.m., they guarantee delivery of any number of copies anywhere in the continental United States by 8 a.m. the next day.

Customers upload their documents to Mimeo's Web site, which composes the job in seconds.

A DHTML-driven wizard then lets them pick the binding, orientation and other options.

The job is processed at Mimeo's plant in Memphis, Tenn., and loaded on airplanes at the nearby FedEx airport.

The print facility has seven color printers capable of cranking out 150 pages per minute (PPM), and 20 black and whites printers with speeds of up to 180 PPM.

With that kind of capacity, finishing the jobs in time for the last FedEx flight of the night -- 1 a.m. -- is usually not an issue.

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