September 26th, 2006
Liveblogging SaaScon: CIO skepticism
I was surprised yesterday in conversation with Bob Jurowski, CEO of on-demand accounting provider Intacct, to learn that his company is finding there are some CIOs who are now standardizing on the on-demand or SaaS model for delivery of their IT. "If you look at the world as a portfolio of shared services, it gives the CIO a much more flexible set of options to work with," he explained. "Once you have a taste of the [on-demand] experience and the benefits, I think it’s very difficult to go back to the old way of doing things."
In fact, Tom Berquist, CFO of database vendor Ingres, is writing about the experience of moving to SaaS on his blog:
"In order to get our business up and running in a hurry and enable our global employee base (five offices in Europe and Asia and three in the US) to access the same information without a lot of expense we decided to go On-Demand for our enterprise applications … We hope to be live with the solution in September and I will update you on what we learn."
So today at SaaScon there’s a panel discussion entitledThese CIOs agree that most of the claims vendors make for SaaS are outlandish ‘The Skeptical CIO’. Naturally these CIOs are not total skeptics about SaaS per se, otherwise they wouldn’t have bothered coming to take part in this conference. But as the session moderator Maryfran Johnson mentioned in her introduction, any CIO who wants to do a good job these days has to maintain a healthy degree of skepticism — especially when it comes to what they hear from vendors.
Listening to this session is instructive, because what customers say is always so much more grounded than the marketing spin you hear from vendors. These CIOs agree that most of the claims vendors make for SaaS are outlandish. They judge SaaS propositions exactly as they judge on-premises propositions. Some of the claims they dismiss:
- It’s not any easier to implement and use. Nor should it pretend to be.
- Vendors should stop harping on about how, if you don’t like a SaaS solution, you can just unplug it and go elsewhere. That’s ludicrous.
- The cost model is not necessarily any better. Customers amortize upfront costs anyway.
- On-demand vendors shouldn’t bother to portray themselves as partners in achieiving business results. They’re just software vendors selling products.
The main reason these CIOs choose on-demand or SaaS solutions is simply because the delivery model is a good fit for the specific application needs they use it for. "I’m very focused on the success of the delivery," said Tom Murphy, CIO of pharmaceutical distributor AmerisourceBergen. "It’s a different way of acquiring software tools for a company. It’s not necessarily better. It’s not easy. Nothing is easy."
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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