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Software On-Demand: The Move to the Cloud

Unless you completely shun technology, which you obviously do not considering that you are reading a blog, it’s hard to avoid the concept of “the cloud.” It’s where we keep and share photographic memories, entertain ourselves, and more frequently than ever, it’s where we turn for productivity, creative and business solutions. The cloud has become ubiquitous in our lives.

Cloud Computing is There When We Need It and It Works

Parallels are often drawn between cloud computing and utilities. In practice, a service like electricity, is provided to subscribers, via a public power grid, interfaced through common, commercially-available equipment for on-demand consumption. Similarly, cloud computing services are provided to subscribers, via the public Internet, interfaced through common, commercially-available computer equipment for on-demand consumption.

Services and on-demand are the keys to understanding why cloud computing has become omnipresent. Just as people would rather have electricity delivered as a service to use as they need it rather than have to take on all of the expense and complexity of making it, the idea of having certain computer services delivered over the Internet to use as needed often makes more sense than having to install, maintain, support and continually upgrade them.

While the services that can be delivered via cloud computing can take forms as diverse as infrastructure, development platforms and even communication, software remains one of the most common and well-received forms of cloud computing.

The Growth Software as a Service (SaaS)

Software as a Service, or SaaS, is the cloud model of licensing and delivering centrally-hosted software to multiple users on a subscription basis.

SaaS has recently reached its tipping point. The 2014 North Bridge/Gigaom Research study, Future of Cloud Computing, reveals that the use of SaaS has risen dramatically from 13 percent in 2011 to 74 percent in 2014. Between 65 and 70 percent of businesses are expected to move significantly toward cloud services, including SaaS, by 2016.

With a technical sounding name, SaaS may seem as though it is more suited for large-scale enterprises with thousands of users. While cloud software is certainly a wise move for many large organizations, it is also very well suited to small and medium enterprise (SMEs). Forty-five percent of companies surveyed said that they want to run operations in the cloud. While large enterprises claim more concern with shifting reliance from capital expenditures to operating expenditures than SMEs, organizations of all sizes agree that agility, cost and scalability are the primary drivers behind adoption of cloud software.

IT Benefits of SaaS

The aforementioned study indicates that, on average, 80 percent of IT budget is used for maintaining existing systems. Included in that figure are costs for infrastructure, personnel, software acquisition and licensing. Cloud services, including SaaS, lessen the burden on IT, providing the opportunity to lighten the load of those costly, but critical, cost center functions.

The choice of enterprise-level cloud software services is a choice to get the IT department out of the business of installing, supporting, maintaining and backing up software applications and the infrastructure they require. This not only helps IT budgets, it also provides an efficiency boost, allowing IT to focus efforts on broader-scale areas of growth and development. In addition, the use of SaaS often equates to reduced energy consumption thanks to its efficiencies.

Why Some Organizations are Still Cloud-Shy

Despite the benefits, IT and otherwise, of choosing cloud services like SaaS, some organizations remain hesitant to make the jump to the cloud. Such concerns are often rooted in conceptions of cloud computing’s past. While the cloud has been a hot topic of late, it is actually nearly as old as networked computing itself. If you’ve been around long enough to remember the world of computing prior to the proliferation of the World Wide Web era of the Internet in the 1990s you certainly also recall the complexities, hassles, inconsistencies and incompatibilities of the era. As a product of their times, the forerunners of today’s services were certainly not immune to the same issues. However, just as all aspects of computing have advanced in ease, reliability and versatility, so have cloud services such as SaaS. With that being said, organizations are still wise to be on the lookout for a few points that will make the move forward a smoother one.

Information security is one of the most critical concerns of organizations today. It stands to good reason that it is also a major concern where cloud software is concerned. Just as with any other element – hardware, software or service – in your information chain, a bit of due diligence goes a long way. SaaS providers know that security is crucial. They understand that their reputations depend upon it and they take it seriously. The best providers of cloud software will be honest about security and the measures they take to ensure it.

The ability to integrate and interoperate with other technologies an organization relies on is another concern. Some cloud software is a stand alone product. Some offer forms or integration or APIs that may require effort or cost on the part of the organization. Other providers tailor their SaaS offering to the organization’s needs providing a smooth, easy integration experience. Again, this is an area where simply asking a few questions can make a big difference.

Finally, especially with enterprise-level SaaS, cost and return on investment can be of concern. If you are only familiar with the relatively low costs of consumer or general-purpose cloud software, pricing for specialized, enterprise-grade SaaS could come as a bit of a surprise. Of course the same can be said when comparing general-purpose and specialized user-hosted software. The thing to remember when looking at subscription rates for SaaS is that the return on investment is deeper than just hard dollars. The operational savings that come through gains in efficiency, reduced IT impact and competitive advantage can be as valuable as hard dollar ROI. In fact, according to the North Bridge/Gigaom study, 35% of respondents cited innovation and competitive advantage as key drivers in the choice to employ cloud services.

The Future of SaaS

While the basis for what we call cloud computing is nothing new, it’s greater proliferation in the business world is still relatively young. Migration toward more universal use of SaaS and other cloud services is underway and developers as well as users continue to discover new opportunities in the cloud. As more and more applications, platforms and networks make the move, the cloud is becoming ever more interconnected and finding itself at home in a hybrid situation alongside of traditional computing.

Cloud services have always been the standouts that empowered organizations to do amazing things and go the extra mile. Now, however, with SaaS adoption past its tipping point, the future promises to be one where the cloud and on-demand software will be imperative to success.

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