SaaS Wins Big with Siemens Deployment

There’s no doubt that SuccessFactors hit the jackpot with its newly announced mega-deal with Siemens, to deploy its on-demand talent management solution to more than 420,000 users in 80 countries. But not only is this a big win for SuccessFactors...it’s a BIG win for SaaS.

The inability of SaaS to support large enterprise deployments has long been the rallying cry of SaaS naysayers. As THINKStrategies’ Jeff Kaplan notes in his blog today, this deal closes the book on that myth.

The deal “clearly illustrates that SaaS is well-suited for global enterprises, and further dispels the myth that it is just for small- and mid-size businesses (SMBs) that can’t afford the luxury of traditional, on-premise enterprise applications.”

Of equal note, this deal was won over traditional on-premise players. As Forrester analyst Ray Wang noted to IDG’s Chris Kanaracus, “Siemens is a traditional SAP house. For their team to make a big bet on SuccessFactors represents the new type of thinking present among many CIOs and enterprises today. Their software vendors may not be innovating fast enough to keep up with the enterprise’s requirements.”

Clearly Siemens, which conducted “an in-depth market evaluation of 30 leading vendors and seven system providers,” has no lingering qualms about the advantages of SaaS. According to Siemens’ head of CIT: "The enterprise cloud computing business model is a strategic direction for us. It not only lowers IT costs, and creates faster end-to-end processes, but can also grow with our requirements both globally and locally."

But there is more to this deal than the dueling delivery models of SaaS versus on-premise. The current global recession will end at some point, with signs that it is already beginning to relax its grip. "CEOs and CFOs are looking to come out of the economic downturn much faster, with more focus and vigor,” says SuccessFactors’ chief marketing officer. Those companies with the most well-motivated and strategically directed employees will be strongest out of the gate when the economy bounces back.

Global giant Siemens understands this. And like the growing number of companies choosing SaaS over on-premise applications, it will now begin to reap the benefits.