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Renting KM applications in the CLOUD

This article appears in the issue May 2016, [Volume 25, Issue 5]
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The rush to cloud-based software-as-a-service (SaaS) business models by traditional enterprise software companies and startups alike has been revolutionary in both the speed of the shift and the impact it is having on technology buyers. KM vendors and what would have once been labeled knowledge management software, which today comes under a variety of guises from collaboration to enterprise social, are no exception to this lightning-fast trend.

The initial promise of SaaS to buyers has been a move toward simple monthly subscription pricing and away from complex server/seat/processor pricing with associated costly maintenance fees. The second promise, even more appealing to some buyers, is the idea of self-provisioning software that removes the need to involve costly and often troublesome systems integrators, consultants and even in-house IT. On the other side of the equation, technology vendors have been sold on the idea of regular monthly and perpetual income while passing on the responsibility for getting the software to do what it should to the buyer. However, both sides of the SaaS equation, buyers and vendors, are likely to be disappointed with what actually transpires.

Over the past several years, the enterprise IT industry has been buzzing about little other than talk of the “cloud”—billions of dollars have been invested in global data centers and the infrastructure required to provide cloud services. Amazon has evolved from being an online bookseller to establishing itself as a major backbone element of the cloud via its infrastructure- and platform-as-a-service (IaaS and PaaS) business, Amazon Web Services. Microsoft has tried hard to move its core products to the cloud (with Office365 and Azure), and even on-premises business application stalwart Oracle moved heavily into the cloud in 2015. Cloud proponents argue that all computing will eventually move to the cloud, and that only Luddites would keep their software running on premises.

Five phases

The fact is that enterprise needs are complex, and running software on somebody else’s infrastructure (aka SaaS) doesn’t take away that complexity. To be sure, the backend computing infrastructure and associated costs are hidden from the customer—that’s the concern of the SaaS vendor. But actually leveraging the software effectively in the business is just as difficult and complex as ever and, let’s be honest, KM was never easy in the first place. Furthermore, no two businesses are alike, nor do they want to be—that’s why it’s called competitive differentiation. In other words, every business wants and needs to configure and use technology to meet its specific needs. Traditionally, that has been accomplished by deploying software in five distinct phases: requirements gathering, design, test, deployment and maintenance.

Not that simple

Yet more buyers are accessing SaaS technology and at the same time attempting to skip the initial phases and jumping straight to deployment, often ending up with a sub-standard service and/or multiple micro deployments running virally and unconnected throughout a firm. In turn, more and more buyers are dramatically underestimating the real costs (and necessity) of bringing in expert outside help to get the technology to do what it is supposed to do and, more importantly, deliver value on the investment. Often forgotten is that with the exception of getting the software installed, the service/consulting requirements for SaaS are identical to on-premises deployments of the same software. What’s more, the installation of software was always a small part of the overall effort and cost.

Vendors must start educating buyers about the real need to use consulting partners in the vendor’s channel rather than trying to go it alone … that getting the software running is just a small part of the overall effort. If things go wrong as they regularly do, buyers are unlikely to blame themselves—the technology will take the blame.

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