The word is that SAP now has 700 customers for its SaaSBusiness ByDesign product as it continues its ultra-conservative rollout of this offering, but it is still only available in 10 countries due to local regulation and legislation complexities (see Computer Business Review). This highlights one of the ongoing questions about the suitability of certain applications - like financials – for the multitenant SaaS model. If resource-rich SAP has challenges delivering widespread localised versions, the cost and effort may be beyond smaller specialist cloud pure-plays.
NetSuite, whose SaaS offering includes financials, has struggled with the cost/revenue balance over the years. Last week it reported its Q3 2011 results, delivering a record-breaking quarter that included a 23% YoY increase in revenue to $61m and non-GAAP net income up 50% over the previous year. But it still reported a net loss of $6.9m, although the loss is declining.
SaaS works for many applications but maybe not for all – while there is little question about the suitability of the technology, it is the economic model that is proving testing and will determine what is offered and where.