August 9th, 2006
IT shops 'afraid of SaaS'
Two thirds of companies are missing out on the potential advantages of a SaaS solution simply because the IT department are scared of trying SaaS, claims Jim Howard, CEO of website content management vendor Crownpeak.
"There are these persistent myths that are eliminating SaaS companies from projects before we’ve even been spoken to," he says. "Part of the reason is, it’s not the way they’ve done it before."
Last week, Crownpeak launched a program of media and analyst briefings in an attempt to counteract what the company sees as a litany of "myths and misconceptions propagated about software-as-a-service."
I spoke to Howard yesterday. He told me that even when vendors like Crownpeak get an opportunity make a pitch, deals are still lost because IT organizations start coming up with objections on the grounds of security, platform, control or some other alleged shortcoming. "Whatever these objections are, they’re really mythical objections. But the fears are real," he said.
Crownpeak is one of the largest and most successful on-demand vendors in the web content management market. Although the penetration of on-demand solutions in Crownpeak’s sector is running at around a 20% level, it’s not yet recognized as a mainstream option in the way that it is in other sectors like CRM and web analytics. That’s mainly because running an organization’s web servers has traditionally been seen as a core IT role, whereas contact management and online marketing are more peripheral and so IT feels those application decisions can safely be left to departmental managers.
The special irony with websites is that the vast majority are on colocated servers anyway, even when they’re managed by the internal IT team — so most of the arguments the IT people are using to diss the SaaS option apply just as well to their own in-house alternative. Howard despairs at the numbers of prospects who are rejecting his company’s services in favor of an alternative that’s "going to be more costly, more risky, and will take longer," he says.
"I don’t think there are IT organizations out there saying, I want to make bad decisions for my company because I don’t want to lose my job. I think it just seems riskier to do it a different way … The IT guys are going to evaluate the risk of doing something different as high. We’re asking people to have faith."
Crownpeak goes out of its way to be an IT-friendly vendor, says Howard: "We’re here to supplement and work with the internal development groups … The IT organizations that work with us love us."
But somehow that message isn’t getting through, says Howard, and he just can’t figure out why.
"Would you like to take on an expensive, high-risk IT project — or would you like to flick a switch? For less money."
You’d think it would be a no-brainer, surely.
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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| 08/10/06
