Cloud concerns. What would you say?

Those of you who were at the ICAEW IT Faculty’s Cloud Computing event yesterday, Friday would have found it interesting.

One great idea was an audience vote on a number of questions at the start and then at the end. The results included:

  • 61% of attendees at the end thought they were more likely to move to the cloud (including I imagine the vendor votes). That left 39% who wouldn’t move or weren’t sure (possibly nearer 50% of the buy-side audience).
  • Main concern shifted from “security” at the start of the day to “loss of control” at the end
  • In addition to “supplier lockin” “and “availability”, there was an 18% score for “other” concerns

Then over lunch I talked to a senior member of the cloud vendor community. We agreed in principle:

  1. SaaS Cloud is the future for all computerised applications
  2. “Best practice” in the SaaS cloud industry is not in general good enough for business-critical apps such as accounting. With some notable better exceptions, the industry as a whole has some way to go. (We are talking here from micro to corporate business users)
  3. Given the substantial benefits of SaaS cloud, such as remote access and typically better backup/recovery, we would both like to see the industry move to a position where buyers found it a no-brainer to go to SaaS for each type of application. That is, of course, subject to assessment of the specific vendor and their ability to integrate to other apps where needed.

There wasn’t chance to find out what the 39% thought, and what the 18% of other concerns could be. Some of these concerns may be misunderstandings that are not real issues. Some may be real concerns that the industry and/or users need to address.

What would you suggest are the barriers to using cloud apps? How can these barriers be addressed?
 

Comments
chanpangchi's picture

Integration

chanpangchi | | Permalink

Hi,

One of my concern is integration.  I can use my CRM to look for my best clients because my CRM is integrated with my finance software.  But if I decide to move either CRM or finance or even both to cloud, then I am not sure how the integration would work.

I assume I can download all the data from cloud and then build my own reports on my PC.  But if this is the case, then my system is fragmented.

Any suggestion?

 

-- Regards, chan_a@algconsultings.com http://ca.linkedin.com/in/alginc http://algconsultings.wordpress.com/

guyletts's picture

More barriers

guyletts | | Permalink

1.  Integration is definitely one of the barriers.  And as the previous commenter notes it's a key requirement for modern, lean businesses to be able to integrate  ERP/Finance, CRM and HR systems as a minimum.  Integration between these systems and a company's web presence is even more rare, even though the Internet is becoming a primary medium for the customer relationship.

In fact the on-premise vendors have only reached a level of maturity on integration in the last few years within their individual product ranges, let alone between competing vendors.   It's a non-trivial exercise - firstly because testing becomes exponentially more complicated the more systems you couple together, and secondly because the on-premise vendors typically have a stable of acquired products built on different underlying technologies.  So even using the lessons learnt so far and using better technology it will be quite a number of years before you can pick and choose the right combination of SaaS apps for your business and industry and expect them to work together.

2.  Telecomms reliability.  People will comment that your internal network can also suffer failures - but by and large that's something you can influence - you can invest in resilience and you have options and control when it breaks.  If you're dependent on Internet access you're wholly at the mercy of your telecomms provider, and when it goes wrong that's not a comfortable place to be.  And I make this point as a SaaS vendor, using SaaS development tools, half way to market...but who yesterday suffered an Internet outage over which we had no control, and where the Telecomms provider initially denied the problem existed.

3.  Data privacy and security.  There are so many issues here - all well rehearsed within these forums but, notwithstanding a few promising drafts, there's no clear, universal standard to adhere to yet, nor has an organisation with the gravitas and credibility to establish one yet broken cover.  For iTunes I'm happy to 'Accept these terms' and have no choice about the fine print, but for my customer data, my employee data and my business finances - I'd like a bit more certainty about security, privacy, service levels and ownership.

 

 

Castroggi's picture

Barriers

Castroggi | | Permalink

For what it's worth from a cloud based application provider of fully integrated ERP/ CRM/ Accounting and Payroll software, we have not experienced any resistance on security issues, and only once has the reliability of communications been an issue (we suggested to a potential rural based customer that he should think about an in-house hosted solution rather than ours). Data migration is a concern raised from time-to-time but we have not found it a particular barrier. Based on personal experience to date the biggest concern raised by potential customers has been the "... you've not been around very long and we're more comfortable with Sage because they are a plc, and plc's won't go bust ...". Mmmmm......

mkcdavies's picture

Speaking as a cloud vendor....

mkcdavies | | Permalink

...I didn't do as you suspect, my vote was that I was no more likely to move to the cloud as a result of the conference.  Maybe I'm just too honest! :-)

guyletts's picture

Does one size ever fit all?

guyletts | | Permalink

@challisc: I agree with your principles 2 & 3, but I think principle 1 (Cloud is the future for all computerised apps) is highly questionable because it focuses on technology rather than benefits.  What if something better comes along?  We're all old enough to remember the (vendor-driven) bid to replace desktop PCs with 'Network Computers'..."the Network is the computer" didn't have a happy ending for Sun.  And do you really mean _all_ apps?  What about automatic pilot...do you want your fog-bound landing in a 747 to depend on a Wi-Fi link?  Surely not, but the extreme example illustrates the point that you should use the appropriate tool for the appropriate job and for the foreseeable future there will be strong business benefits to retaining local computing power in many circumstances.

Where I think we're missing a trick with the increasingly polarised debate about Cloud computing is the potential benefits of a hybrid model.  Granted SaaS/Cloud is compelling for small organisations with vanilla requirements and no need or desire for internal IT.  However if you consider accounting & ERP systems for the mid-market and above the points of differentiation are rarely on their underlying technology or their ability to maintain a set of ledgers.  Until a couple of years ago the battle was being fought primarily on customisation and integration.  Look at the websites of the channel partners - they major on their abilities to tailor solutions and their skills in linking complementary products.  Presumably there's a clue there about what businesses of that size really need and value.

To those differentiators you can nowadays add web integration (including mobile) and possibly customer service.  It strikes me if you go for pure SaaS you just trade one set of benefits & weaknesses for a different set.  Why not try for the best of both worlds?

challisc's picture

Benefits of a Hybrid SaaS/OnPremise Model

challisc | | Permalink

Thanks for some very good points, Guy.

My point one should have had "potential" and "business" in it to read "SaaS Cloud has the potential for all computerised business applications". In practice unless something better comes along (and I'm not aware iof anything in the pipeline), then SaaS cloud is the future for purchases decisions being  made in  the next year or two at least.  I would include larger businesses in that, but for them there are a host of extra issues such as staffing to consider.

Certainly I share your view that each business application should be considered on its merits, given the business needs and available systems/providers of both SaaS and on-premise solutions for a busines of its size. That will often produce a hybrid situation, even for a green-field site. Interesting you made your posting just before the K2/Aweb webcast in which someone implementing a cloud solution talked of the possibility of moving in the future to a sister product that is currently only available as an on-premise solution.

It's also worth highlighting the difference between

  • "Configuring" software, which is a standard part of all packaged sofware I've ever seen, be it on-premise or a SaaS system, and
  • "Customising" software, which is adding functionailty by bolting extra software on, or changing existing software. The former is still possible with SaaS using APIs. The latter was never very common with on-premise packages due to problems for upgradability (though I have seen it done with great effect - doubling annual propfits), and may still be possible with SaaS in larger situations when essential

That then leads on to the role of resellers in an increasingly cloud-dominated market ....

 

 

 

 

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