How the cloud helps build agile companies and encourage experimentation

How the cloud helps build agile companies and encourage experimentation

Summary: With subscription-based pricing and low cost of entry, SaaS gives companies the freedom to innovate with their software choices and run with what works

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Commentary - Last year your company deployed an enterprise software application touting an impressive list of benefits from “providing a low total cost of ownership” to “streamlining operational processes.”

Fast-forward nine months and the reality hasn’t quite lived up to the jargon on the brochure. The sales team cringes at the idea of having to use this program. Customer service enters their data into the system as an after-thought, often backfilling a week of data at a time. Across the board, the software appears to hamper, rather than help, workflows.

Even after admitting the software isn’t doing its job, your company isn’t quite ready to cut its losses and move on to something better. Why? Simply put, the cost would be too high. You’ve already purchased the software licenses upfront, then spent five months deploying the application on servers, laptops, and client devices. The sunk financial and time investment is simply too large to walk away from.

Sound familiar? This story is hardly an anomaly. All too often companies have become conditioned to operate within the framework of their software as opposed to having their software bend to meet the framework of their business needs. By the time a company realizes their traditional software isn’t working for them, they’ve already sunk thousands of dollars and vast amounts of time into the application. As a result, a company’s software expectations quickly shift from ‘the perfect fit’ to ‘make it fit.’

Fortunately today, Software-as-a-Service (SaaS) is changing this dynamic and turning the traditional enterprise software sales model on its head. Subscription- or consumption-based billing, as opposed to traditional licensing, means companies pay only if they like the product and discover it works for them.

Without costly pay upfront software licenses, there’s minimal risk to evaluating a cloud-based product. Companies are able pilot an app for several months. If there’s no user buy-in, businesses can move on with few regrets. The low cost of entry gives companies an unprecedented luxury to run with what works and drop what doesn’t.

Furthermore, with a cloud-based app, there’s no complex integration or need to install software (and handle upgrades) on everyone’s computer. A web-based app can be up and running in a matter of hours. By shattering deployment times, cloud apps eliminate the high cost of sunken IT resources when a traditional enterprise app fails to live up to expectations.

Perhaps more importantly, cloud apps let companies innovate quickly and respond to changing needs on the fly. If a group of workers suddenly needs new capabilities, cloud apps put those new tools in the hands of workers without delay. The result is a more agile company. In addition, because cloud-based apps tend to be more open and play well with others, businesses can actually build a multi-vendor solution of preferred apps, instead of being locked into a single source platform.

Ultimately the success of any technology initiative hinges on the ability to convince employees to actually use the new application or device. At the end of the day, employees are consumers and are drawn to easy-to-use, well-designed tools. What most users really want is software that flexes to the way they work. That’s the driving force behind today’s “consumerization of IT” trend, where end users rebel against traditional top-down IT.

Here’s where the cloud’s subscription-based billing model comes in again. Similar to consumer-oriented products, cloud-based software is often developed with one goal in mind: usability. After all, if end users don’t end up using a SaaS application, the vendor doesn’t get paid. As a result, a SaaS vendor’s core focus is going to be making great products that their customers actually need and use. This pressure naturally propels the market forward, with a diverse collection of genuinely useful tools. The days of “shelfware” – traditional software purchased with the best of intentions, but left collecting dust on the IT manager’s bookshelf – are over.

The cloud is becoming a hotbed of experimentation, where all experiments are geared toward finding quick, easy ways to solve the most pressing business problems. There’s no forced process here. When apps prove useful, they’re incorporated; if not, they’re abandoned just as fast as they were adopted. The result is a more flexible, agile business.

biography
Jack Newton is CEO and co-founder of Clio, a Vancouver-based company that offers web-based practice management software for solo practitioners and small-to-medium sized law firms.

Topics: CXO, Apps, Cloud, Emerging Tech, Software, IT Employment

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  • Did I mention I'm sick of ZDNet's obsession with panaceas?

    Did I mention I'm sick of ZDNet's obsession with panaceas?

    Okay, the cloud is great blah blah blah. How are those rose colored glasses?

    It's so great, there couldn't possibly be any drawbacks. We're going to totally ignore that any of them exist and only talk about flowers and unicorns.

    Did I mention I'm sick of ZDNet's obsession with panaceas?
    CobraA1
  • Don't Ignore the Customer Relationship Benefits

    Your article raises many good points. Additionally, I wanted to highlight how cloud-based subscription billing models help companies build long-term relationships with their customers by connecting with them at different touch points in the subscriber lifecycle. This opportunity to build strong, longer-term and profitable relationships is yet another example of why we're seeing companies across various industries turn to this model.
    jennyvictor