SaaS could be the silver lining in the Cloud

Over the last calendar quarter we have focused several posts on this blog on the market concept of “cloud” computing. To summarize a common thread, we have repeatedly expressed a skepticism throughout most of these posts about the idea of “cloud” computing as something new. Further, we have expressed our opinion that the security issues that have naturally arisen as the result of building software as a service (SaaS) “cloud” offers on top of Internet Protocol (IP) networks (which are public and offer limited hand shaking, error checking, etc. beyond packet transmission latency) to be of the type of risk that enterprise CIOs will be slow to embrace. Nevertheless, the widely publicized enthusiasm of very large ISVs like HP, Oracle, IBM and Microsoft for this business model has continued to grow over the same time period. So where is the disconnect?

With the publication of a post by David Terrar on the Enterprise Irregulars web site, The Cloud’s 5 Challenges for the ISV CTO we are able to bridge some of the disconnect that we experienced between our position on cloud computing versus the position of the above mentioned very large ISVs.

In fact, the disconnect arose for us as the result of a now familiar jumbled marketing communications cloud computing message. We know better than to confuse managed services originating from someone’s on premise servers that are dedicated to a corporate Intranet with a subscription account at Salesforce dot com. In our opinion the market has not respected that difference. Therefore, we agree with David Terrar when he aptly points out that there are several sub categories within the cloud computing market message that need to be discretely understood, including:

  • Infrastructure as a Service
  • Software as a Service
  • Business Process as a Service
  • Platform as a Service

Once the boundaries, limitations and characteristics of these 4 products/services/integrated solutions are properly understood, then we all can intelligently render our own opinions as to their respective vitality as a business notion.

With that said, the success that we noted recently for the Workday SaaS offer within the very same complex Enterprise organizations to which we have devoted almost all of this blog, now makes sense. SaaS certainly has very strong marketing legs. Further, we fully agree with David Terrar that compensation models for sales teams will need to be changed to better align sales with the overall SaaS revenue strategy. Looking even further, the evolution of sales activity along the lines of a complex selling methodology cloaked in the type of lead generation “skin” offered by a company like Alinean® will likely be inevitable.

If you share our enthusiasm for truly understanding enterprise IT markets and their direction before you take a leap, then we should talk. Please telephone Ira Michael “Mike” Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

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