9 Questions every SaaS vendor needs to be able to answer

9 Questions every SaaS vendor needs to be able to answer

Summary: Skeptical CIOs need re-assuring from Cloud SaaS vendors - What are some of the questions they're needing more guidance with?

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I've interviewed a number of large enterprise CIOs lately. I've also spoken with some CIOs who are either clients our firm or consulting clients of our partners. In those latter conversations, the CIOs were questioning me and I was doing the answering.

Their questions were actually quite enlightening particular for those vendors who sell software as a service (SaaS) solutions to large enterprise CIOs. In brief, the questions they asked showed me that these companies will be taking on more cloud-based applications but that cloud vendors still have additional education in risk mitigation ahead of them if they wish to finish winning over the hearts of large enterprise CIOs.

So what did they ask me?

- Cloud to on premise integration of applications must be better than what many CIOs must live with the current integration services tools sold to CIOs and their on premise applications today. These CIOs are not happy with the current on-premise to on-premise integration options available to them and want assurances that newer cloud apps will behave better, integrate better and stay integrated

- How am I expected to roll out a cloud-based application suite globally when cloud adoption rates are greatest in North America, less so in Western Europe and even less are still in some other parts of the world? CIOs want help selling the concept of the cloud and SaaS to others in their far-flung empires.

- Do cloud vendors and the software application vendors building cloud applications understand and have solutions to deal with local information regulations? Specifically how will a cloud vendor assure CIOs that personal employee data in Germany stays on cloud servers in Germany and is not virtually moved around to other cloud computing centers?

- Why are older on premise vendors still fixated on their SOA technology stack ease and so late in developing full blown cloud applications?

- When will larger application suites appear on the cloud?

- Are the product extensibility and platform developmental capabilities that cloud-based application vendors speak of really as powerful as the vendors claim them to be?

- What do I tell my IT staff, particularly those that maintain older on premise applications, that the days of them needing to upgrade old applications to newer releases may be coming to an end? Who is going to help us with this change management, skills and training problem?

- Will user and business analysts now be able to not just extend cloud applications but maybe even build additional applications without IT involvement? How can IT control that?

- How does IT ensure that business analysts don't unnecessarily expose corporate data to authorized cloud application users?

And those were just the questions from the first half hour of one of these briefings. While I dealt with these questions reasonably well, I do believe cloud-based application software vendors may need to create more thought leadership and educational pieces for the senior IT technology buyers in the market today. These executives are hungry for answers and will need to have risk mitigated for many projects before any SaaS projects can be green-lighted.

On-premise vendors will see the sorts of questions above as an opportunity to sow fear, uncertainty and doubt (FUD) into the mindset of IT executives. Unfortunately for them, CIOs see through many of these tactics as a poor salesmanship tactic. In fact, that sort of fear mongering has been going on for some time. It's not working well.

On-demand software vendors have a duty to their own firms as well as to the space in general to dispel or rebut these concerns.

Topics: CXO, Cloud, Data Centers, Emerging Tech

About

Brian is currently CEO of TechVentive, a strategy consultancy serving technology providers and other firms. He is also a research analyst with Vital Analysis.

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4 comments
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  • Moving to public clouds ...

    ... seems to me like giving up your car for public transportation. Beyond cost savings, I don't see the compelling advantages of attempting a wholesale shift to public clouds. It is one thing to augment your data center with public services, it is however something very different to hand over the care of your company's nervous system, to another company (which ultimately you know little about) that could be hundreds or thousands of miles away, when you really don't have to. All on-premise companies have to do to combat public clouds, is package their solutions better - like providing turnkey systems which customers can enhance and extend via services they can easily turn on. Also on-premise companies should have unified billing, simplified management, and more payment options such as leasing and financing. Also on-premise companies should have building block / module solutions, that can easily snap into and out of customers' data centers, to accommodate scenarios such as customers wanting to rent modules for peak business seasons, and be charged metered rates.
    P. Douglas
    • RE: 9 Questions every SaaS vendor needs to be able to answer

      @P. Douglas
      Remember that it doesn't need to be an 'all-or-nothing' approach; Essentially you outsource (to various degrees) the commodity parts of doing your business, eg
      * the HR & PY Business Processing and IT processing,
      * Order Entry / Data Entry
      * etc

      But retain inhouse control over everything associated with your competitive difference / competitive advantage, such as
      * CAD Tools,
      * bespoke scheduling / recipe systems
      and so on
      martin.english
  • RE: 9 Questions every SaaS vendor needs to be able to answer

    The first FEW massive security breaches of some major internal system will put an end to the "cloud" computing model for several years. This is simply the ASP (Application Service Provider) model by another name. Cool marketing gimmick.

    If banks can't guarantee the protection of their customer data, and major corporations with ON PREMISE solutions are periodically hacked, I'd sure like to see the "cloud" do a better job with sensitive corporate data.

    Like I said, just wait and see, the first MAJOR "Data Spill" (to coin a term from the current U.S. Gulf Coast BP Oil Spill) will have far reaching consequences for all of the "cloud" applications.
    wjwood64
  • RE: 9 Questions every SaaS vendor needs to be able to answer

    <Disclaimer: I work at MSFT, but comments are my own.>

    @P.Douglas --

    I think that martin.english hit on a few keys points about all-or-nothing vs. right-tool-for-the-job. No one's arguing (or at least, I'm not) that everything should move off-premise. Beyond what martin mentioned, there are other advantages such as elastic capacity during spikes and low- or no-commitment (or CapEx) usage for all sorts of applications. Those are your "augment" scenarios as you mentioned.

    Beyond that, there are definite reasons that "cloud" might be better than DIY -- you don't have to focus on ops details like patching as much, you don't have to wait for hardware deployment or manage upgrades, etc -- regardless of the app type.

    Again while I completely agree that not everything is appropriate to move off-premise, the redundancy, security, and backup capabilities provided by cloud computing *can* in many cases make it more stable and secure than many on-premise IT infrastructures that don't have huge scale and massively-automated management.

    I don't assert that "cloud" will necessarily "save" you tons of money -- it is converting CapEx to OpEx and it's up to your business to strike the right balance financially and security-wise.

    Finally, more and more you're seeing a split between "public" and "private" clouds. I personally think it's not as integrated as it needs to be yet, but certainly Microsoft is working in that direction, and companies like Amazon and Canonical have blazed a lot of ground there.

    Jason Sherron
    jason.sherron