SAP chief: Big software isn't going away

While Marc Benioff may rail against the status quo in the enterprise software business, not all software buyers will join in the chorus, according to one of Benioff's chief competitors.

Web-based business software sold by companies such as Benioff's Salesforce.com will likely augment, not replace, large, complex enterprise systems, SAP Chief Executive Henning Kagermann told The Wall Street Journal on Tuesday.

Kagermann said that while some of the main selling points for Salesforce and other Web-based services make sense--namely, better usability and productivity--corporate buyers are a notoriously conservative bunch.

A slicker user interface and easier access to corporate applications answer only some of the needs of big business. Security, a uniform data model and corporate-wide compliance with regulatory rules are more pressing for C-level executives, he argues.

Clearly, Henning's argument is biased toward his company's product line. But he may have a point: it's more difficult to manage Web-based systems implemented piecemeal at the departmental level. Regulatory compliance is becoming a corporate nightmare, and companies need all of the help they can get.

Still, much of the real innovation is taking place at companies like Salesforce and Google, as well as at many smaller firms hard at work defining the next wave of cloud-based business software. (Microsoft is making strides here, too).

SAP, for its part, is still struggling with its on-demand strategy.

As Rishi Chandra, product manager for Google Enterprise, said earlier this month, technology innovation is being spurred by the consumer market, which will, in turn, drive demand for better business systems.

Some things never change. For decades, CIOs have been a conservative lot. And for decades, end users have demanded more.