Enterprise software vendors face deflation: Advantage SaaS

Grazed from ZDNet. Author: Larry Dignan.

Legacy enterprise software vendors are caught in a deflationary pricing cycle, but there are multiple nuances worth noting. In a research report on pricing model disparities, Cowen & Co. analyst Peter Goldmacher found:

• Data management tools such as Hadoop and NoSQL can save customers 70 percent to 80 percent relative to data warehousing tools from Teradata and Oracle.
• SaaS apps such as Salesforce and Workday can save you money in the early years relative to an on-premise deployment from Oracle or SAP, but you could wind up paying more out over the duration of a deal. The outcomes range from 50 percent savings to spending more on SaaS vs. on premise.
• Box is more expensive than on premise options in many cases, but collaboration customers are willing to pay up to access files remotely from mobile devices…

Goldmacher’s report is long and we’re not going to outline every detail in this post. But the key word to note throughout is "disruption." In many cases, there’s just no way a legacy software provider can compete on pricing with a up-and-comer looking to grow at any costs. Goldmacher said:…

Read more from the source @ http://www.zdnet.com/enterprise-software-vendors-face-deflation-advantage-saas-7000021862/