What is SaaS for the Big 4 of IT Operations ?

For all of the last 20 years, the Big 4 have dominated the Enterprise IT Management market. They have contributed a lot to the innovation with the level of engagement they had with customers and end users. However a lot of these learnings have become best practices and common knowledge and the barrier to entry of new players have reduced.

However these organisations itself have not evolved with the times and stick to the high cost business model where consultants and marketing teams still play a major role in winning and maintaing customers.

Now with the slow but sure evolution of Software to move as a Service (SaaS), these IT Management vendors are finding it hard to adopt and move towards a SaaS model for delivering IT Management. The biggest challenge for these vendors seem to be :

1) Technology
2) Business Model

Technology Challenge:
The biggest challenge from the technology point of view is their agent based approach to monitoring and the product Client (GUI). Most of the software they use is an agentbased model, which had its benefits in the early days when packaged applications did not have a management instrumentation of its own. Another technology challenge is their outdated Client Interface. They also have to work on a web client to make it work for a SaaS model.

The technology part is probably something they can overcome over a period of time, but ofcourse they have the risks associated with rewriting software code.


The biggest challenge for them is changing the Business Model.


Having being addicated to getting 6 and 7 digit software license revenue , they will find it hard to move to the norm that is come to be seen in the SaaS model - Subscription based pricing. Subscription based pricing involves getting license cost per year and more predominantly on a monthly basis.

The bigger problem is for those who are Public Companies. They can't afford to show a lower revenue for a quarter, let alone for a whole year due to shareholder pressure. This is the case even though it is clear that Subscription model prices even out on the long run.

The movement of applications to the cloud is sure. The dominance of the Big 4 in the past is an established fact. However the emergence of a Smart Fifth is also a possibility;

..... unless the Big 4 and other vendors are willing to be more agile.