Friday, September 28, 2007

CIOs face tough on-demand choices

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A recent CIO Jury poll of IT directors found half of businesses are still cool on SaaS, which is either very low priority or not on their radar at all. But it is gaining ground in customer relationship management, where analyst Gartner predicts SaaS will account for 14 per cent of the total market this year.

This would'nt surprise me as SaaS or OnDemand vendors have still not covered much ground on the main pain points that large organizations have around;

Risk management: As a large organization where my exposure to risk is higher what are the options I have available that mitigate these risks. Since the SaaS world often uses the "power grid" analogy I would ask where are their diesel generators. Have you ever been to a large telco or hospital that completely relies on the power grid but also has its own backup generators that can run for really long cycles in the case of an outage? These organizations test these generators on a weekly basis to ensure they can kick in right away. What if a "Melissa" hits SaaS vendors does that mean that I'm hosed because I'm now joined to their infrastructure at the hip. To win over large organizations that want to make SaaS as part of their mainline strategy these kinds of diesel generators are required.

What happens when I terminate my SaaS contract and decide to move on either to an On Premise or another OnDemand vendor? Thats another risk thats not significantly addressed by the SaaS vendors.

Security: This has been a perenial issue for the SaaS world and unfortunately I dont see the same progress being made on that front.

Integration: A sore point for many CIO's who've been there done that or inherited a 250+ system landscape where 50 of their systems need to integrate with their OnDemand system and there are all kinds of replication and federation issues. Again this is an area that needs a lot more investment than what we are currently seeing.

Supressing rather than flushing out these issues is leading CIO's to be hesitant to jump on the SaaS bandwagon.

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