Author: Sam Kurien
•8:59 AM
Recently Information Week came out with an article that SAAS models were not always the best mode to go for enterprises to switch to cloud computing and the arguments that they gave basically were the following. I have marked them in italics and counter argued my point.

Not always cheaper. My colleague John Foley writes how San Jose CIO Steve Ferguson ran the numbers and found his creaky Outlook/Office 2003 costs $1.88 per user per month, compared with about $3 he'd expect to pay for Google Apps. Our recent outsourcing survey finds most people like SaaS and cloud computing: 37% say they perform better at lower cost. But 18% say they perform better at a higher cost. That may be fine, but has any SaaS vendor given you that Cadillac sales pitch lately--that it's not cheaper but better? Even slightly cheaper might not be enough, given the potential compliance and vendor viability risks.

Agreed they are not always cheap and in many scenarios and can become costly if based on per user model but the author ignores the long term return on investments by adopting cloud computing and SAAS models .Upfront implementation costs may be on the higher side but the internet and web give unlimited opportunity to increase your user base, increased user base means more exposure, more revenue, and the ratios normally leaning more favorably to the client side that implements cloud services. One shouldn’t forget the need for business’s today is accessibility of information on both sides of the quadrant be it internally within the organization or externally satisfying customer requirements. Desktop computing and desktop applications provide a bottleneck in the speed of operations.

Every app doesn't fit the SaaS model. There's a bunch of applications that CIOs just aren't thinking about converting to services, such as graphics-intensive apps like computer-aided design and many financial and transactional apps, which tend to be latency-sensitive and hold data that companies prefer to keep on premises. It might seem like every up-and-coming software category is a shoo-in for SaaS, but consider iRise, a growth company that provides application development visualization software--and has no plans for SaaS. Oracle sold $1.7 billion worth of good ol' software licenses last quarter. Microsoft's new Office 2010 includes a substantial Web element, but the core pitch for this multibillion-dollar franchise is still around the client software. In our survey, 39% of companies not using SaaS say there's no business requirement for it. On-premises software is far from a legacy concept.

Again the argument is weak not all business organizations out there are graphic or design focused as these companies fall under specialized service oriented firms whose needs are different.  The business’s that do not recognize the need will fall behind just as Microsoft was slow in catching up on the internet race. Survey respondents saying there is no need haven’t really assessed the environment needs correctly or asked how better serve the customer and more importantly have not asked the question how fast are their latency times reduced in serving those customers.

Security. SaaS vendors get that their existence hinges on rock-solid security. But they're also a bigger target--banks need guards cuz da crooks know da money's there. Our survey finds 39% of companies not using SaaS cite security as the biggest reason (tied with no business requirement as the most-often cited). This one will never entirely go away.

Vulnerability levels are a concern but the same has always been true for desktop applications since the last three decades, a worm can be released to crash any desktop application. A good SAAS model will not only have an advantage of better encryption and security features but it will also be the right venue to offer distributed computing which will synch data back and forth with client and Server applications.

Governance. It's different from security. Even people who trust a SaaS vendor's security might pass for compliance reasons. For example, Global Crossing, a user of Microsoft SharePoint and Exchange for collaboration, doesn't consider SaaS versions because, as a foreign-owned company that has contracts with the U.S. government, it faces a maze of data-handling rules best met on premises. Recruiting firm Manpower, a big customer of with strong faith in its security, keeps some of its most sensitive client data in-house because of internal governance rules, says CIO Denis Edwards. It will get interesting when companies try to keep the sensitive data on premises while tapping online services to interact with that data to create the end-user experience they want.

One of my favorite topics to address and my comment here is good Governance and Governance practices are as good as their implementers are. Regulations can be followed but the idea is to be flexible enough that you can react to market needs and market conditions and comply with those frameworks and regulations be it for a full fledged SAAS enterprise application or a traditional organization with no big computing needs.

SaaS is winning a lot these days. But it won't win 'em all.

The only point I completely agree with which the authors finally state the obvious making their whole argument weak. The age of true networking has arrived, and its going to stay. The World is Flat and a little bit closer.

My counter arguing rants for the day.

Sam Kurien
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