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Mid-market still wary of the cloud

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14th Apr 2016
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As Greentree launches its software as a service (SaaS) offering, Tom Herbert speaks to its UK MD about the reluctance of many mid-market companies to move to the cloud.

“Everything is going to move to the cloud," Unit4’s CMO Ivo Totev told AccountingWEB last week. “Even the most conservative German administration in 20 years will move to the cloud. Customers, no matter who, will move to the cloud.”

According to a recent Deloitte study 56% of mid-market executives are using some form of cloud-based service, but while this may offer mid-market and enterprise software vendors an appealing vision of the future, many are still finding it difficult to tempt their customers away from the trusty server in the corner of the office.

Harry Mowat, managing director of Greentree Software UK, admitted that most of their customers are still on premise. Speaking at the launch of Greentree’s SaaS offering, Mowat said that for most mid-market enterprises, their business management systems are “absolutely mission-critical”.

“Most companies have made a significant investment in legacy systems and data and are, quite rightly, cautious when engaging with new technology platforms.”

However, Mowat added that in this age of economic uncertainty where companies are constantly scrutinising their operations for efficiencies, the higher up-front costs of the traditional on premise management system, where companies purchase a set number of users may help to tip the balance in the battle between cloud and on-premise.

“With SaaS there’s a monthly fee – no upfront cost, no server costs. For company finance directors this is attractive because it means no big capital outlays and drastically reduced up-front costs, leaving just a monthly rolling fee.”

Cost control and flexibility

Flexibility may also prove a factor in winning this particular software battle. With the majority of SaaS offerings you can increase or decrease user count based on need. According to Mowat, financial decision makers they speak with like the idea that they can switch things on and off, and therefore control costs.

As Mowat points out, fast-growing new businesses are more likely to be interested in ‘as a service’ offerings. “It’s a natural way to go for them”, said Mowat, “SaaS is much more scalable. It’s quick and easy to increase your user counts.

“We are now seeing the balance swing in favour of the convenience, flexibility and minimal upfront capital requirements of as-a-service approaches”.

“Our SaaS offering is exactly the same as our on-premise – there’s no cut down in functionality, it’s just the way it’s presented. As it’s on the cloud it is accessed through a browser so it’s also portable and can be run across multiple devices.

Customer choice

Despite this relatively rosy picture for cloud adoption, for Greentree it’s still all about customer choice. “We’re not suggesting that everyone should be pushed people onto SaaS," said Mowat, “if customers want to buy our on-premise service they’re welcome to.

“However, every sales cycle I’m asked if we have a cloud offering, to which the answer is yes. With time more and more customers will go to the cloud. Historical scepticism that a server ticking away in the corner of the room they can touch is safer is ebbing away”.

Has your business moved its management system to a SaaS offering? What pain point(s) did this solve, and were there any disadvantages?

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By Simon.stronach
14th Apr 2016 12:30

Mid market cloud take up
I find the comments around a low take up of cloud in the mid market a little confusing , NetSuite have been providing cloud software into the mid market sector for a few years and there has been a definite increase in the last two years, but then again we are more exposed to the cloud sector as it's the only sector we have ever worked in, being native cloud.

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