SAP says big on-premise software deals are seeing a resurgence

Is it back to the good old days, or is SaaS where SAP's future prosperity really lies?

Despite SAP's push in recent months to promote its Business ByDesign SaaS solution to small and medium enterprises, it said late last week that huge enterprise-level deals that have long been its cash cow are seeing a resurgence.

In an interview with the Wall Street Journal, chief financial officer Werner Brandt said: "Very large transactions have come back. That happened towards the end of 2010 and we see it continuing."

He singled out the market in Brazil as being particularly buoyant.

While SAP no doubt welcomes an upsurge in big enterprise deals, the company expects most of its future growth to come from the mid market. At the CeBIT conference earlier this month, SAP co-chairman Jim Hagemann Snabe said that he wanted to increase the company's annual revenue from €12.5bn (£10.7bn) to €20bn.

by 2015, and anticipated that most of this would come from sales of Business ByDesign, its commoditised SaaS solution.

And arguably if the company were to turn its focus back onto hulking enterprise-level deals, it would be swimming against the tide.

A report released yesterday by technology analysts Techmarketview argued that take-up of SaaS and platform-as-a-service was changing the shape of the software industry for good, and that traditional large on-premise contracts were in terminal decline.

It predicted by the end of the decade, cloud-based package software would represent nearly 30 per cent of all software spend.