This is the first post in a 3-part blog series entitled, “The Cloud and the End of Enterprise Software.”
SaaS Brings Agility to Those Who Think Portability
The Software as a Service (SaaS) debate is over as companies have been achieving great success with the benefits of pay-as-you-go solutions. In the Cloud Advisory Services practice here at NTT DATA, our consultants have spent years with many clients helping to rationalize their application portfolios as they elect to reduce or eliminate on-premise data centers in favor of more agile solutions on the cloud. We’ve seen opportunities to outright replace commoditized applications with SaaS solutions to be one of the most desired options.
The figure below is from IDC’s paper titled, “Worldwide SaaS Enterprise Applications 2014–2018 Forecast and 2013 Vendor Shares.” As it illustrates, CRM applications on-premise held nearly 65% of the market in 2013 and is expected to drop beneath 40% by 2018. The SaaS CRM will be overtaking its majority market share next year.
As more SaaS solutions emerge for Financial, CRM, HR, Insurance, and other key business functions, companies are flocking over to achieve further abstraction allowing the vendor to handle development, patching, release management, disaster recovery, backups, infrastructure refresh cycles, etc. See more on this in our PULSE newsletter article, “ Cloud Applications: The Move Toward Industry-Centric SaaS.”
Keep Your Eye on Agility!
One of the most costly, lengthy, and painful challenges for both IT and the Business involves major application migrations. For many medium to large companies, implementations of ERPs such as SAP or PeopleSoft can take nearly 2 years and cost millions of dollars. While SaaS eliminates the need for some of these costs in terms of procuring infrastructure and the installation, one of the most difficult components of any major ERP or Business application roll out involves your historical data. Sometimes the data migration itself can pose such a challenge that the new system proves unreliable and is never fully accepted by the end users.
The beauty of cloud is that it offers us all agility. It allows us to focus on core competencies and “let the experts handle the rest.” However, as any IT executive will agree, vendor lock-in is a real fear. The reality of using an outdated system for several years simply because of the cost and effort associated with migrating to an alternative solution does not perceive IT as a business enabler, but an obstacle.
It is vitally important to ensure that your data in any SaaS based site can be easily retrieved and, more importantly, be migrated to another. Gone are the days of expensive licensing that required long contracts, so don’t let yourself fall into the same pattern when you’re on a monthly subscription.
Consider iPaaS solutions to help ease the process. Many of the platforms contain out-of-box integrations with leading SaaS providers. In addition to keeping all of your information synchronized and available for analytics or with other applications in this world of many clouds, it can also provide you a good option to retrieve all of your data as you consider moving to an alternative solution. It’s your data, make sure you can get all of it at the flip of a switch.
Agility and Abstraction: these are core principles in the current world of IT as they will shift focus on innovating the business rather than having budgets caught up on the mundane. Contact NTT DATA Cloud Services for any additional information or to work together on your portability strategy.
In my next blog post in this 3-part series, I will discuss “A New Era of Business Applications” where I explore “Buy or Build” and the benefits of thinking functionally.
-CJ Kadakia, Director, Cloud Advisory Services – Senior Applications Strategist