Archive for June, 2013

Will You End Up Shouting “Why SaaS”?

Wednesday, June 19th, 2013

10 challenges I’m afraid will not be addressed by vendors that may create problems for the cloud

First, I am a big believer in all of the predictions that cloud technology will take off for businesses.  If done well, it should change the face of IT and businesses for many years to come.  If not done well, it could end up another technology approach to not reach its potential.

I fear that many of the software companies out there offering SaaS can ruin it for the rest of us.  Here are 10 fears I have on what software vendors are doing that could have a negative impact on their customers and “cloud” the benefits.

1. Proliferating redundancy – too many companies are putting their big applications out on the cloud and calling it “cloud technology”.   Many of these applications require all of the data for its services and functionality to reside locally in their specific format/database.  Many of the built-in functions to those software packages also reside in many places within the four walls of the customer.

2. Forcing commoditization of functionality in places that should be differentiated – customers still need to differentiate themselves with the uniqueness of their products, distribution, and services.

3. Technical architecture isn’t as much a focus – A false sense of security and not enough scrutiny on the technical architecture of the software – as you would if you were taking it in house.  It’s just as important.

4. Fear of losing control of schedules and timing – who wants to have to do a bunch of regression testing because their provider decided to upgrade or make changes?  At the same time, you have to wait for their schedule to introduce the new functionality you want.

5. Can be seen too much of an Easy Button for business and they sometimes want to do it without real buy-in from IT.  Should still follow best practices that IT has adopted over the years.

6. Taking a step back in “big data” and business intelligence initiatives – redundant data that’s not linked together slows down the ability to take on these initiatives.   Redundancy and varying formats also impact the effectiveness of this.

7. Giving up complete control with no contingency may be scary to some – 100% dependency on the Internet might be a problem.  I read an article recently about unforeseen dangers (i.e. war, virus, security, etc.) that could force a shutdown of internet communication in the U.S. or other countries for extended periods of time.

8. While I would argue that most cloud providers offer better security than the average insurance company (inside their four walls), the motivation of hackers is far greater to get at databases that have data for MANY companies inside it.

9. Questionable reliability of data center – many software providers think they can just host an application.  It’s easy, right?  Many others think they can find a cheap broker to host it for them. Software providers should provide the software and its management and support and leave the physical hosting to Amazon, Microsoft, Rackspace or others who really do this for a living.

10. Forces you to be more locked into a software providers – the switching costs and risks will be too high.  Companies should be able to seamlessly take their licensed application in-house and/or move to another service provider.

None of these challenges are insurmountable.  It’s still important for IT to pick the right partners and do the appropriate level of due diligence on the architecture and technology.  If not, these challenges can have negative impacts on the earlier adopters and early majority…leaving the rest of the companies hesitant to embrace the trend.   That would be unfortunate for the industry because getting this right can help all of us transition our businesses to the next level of efficiency.