Cloud Calculus

Information Week published a thorough article on how to evaluate SaaS, written from the perspective of the CIO's decision to present it as an option to her CEO or Board of Directors. 

The core bullets:

1. Manage Expectations

2. Partner Internally

3. Vet Your Vendors Well

4. Be Careful About Cost

5. Confront the Risks

I'd like to address point 4, specifically around the costs of the Cloud and Saas.  I personally believe that the subscription model is the most powerful in business.  Insurance companies and SaaS are more similar to me than are SaaS and traditional software.  Selling one more widget is tough for anyone – recurring monthly payments minimize the sales effort.  This model, be it for MSPs, services firms, or SaaS vendors, will continue to be compelling, and with the right balance and service, there can be a perpetual money machine.

However, on the buy side, I get stuck with the bills.  And, for me, when I start to ask about ROI and TCO, I don't think that many vendors do a good job just yet of helping me get there.

It's difficult to balance the built in capabilities of my staff versus the productivity they will achieve by taking another task off their plates.  Tough as well is a SaaS vendor's data center's redundancy against relatively cheap NAS and virtual servers at on offsite rack.  Even harder choices come when I have server space readily available on our racks and can deploy virtual images at will - except that I could also spin up a server at Amazon or Google for dollars a day.

 The first (and core) theme mentioned throughout the article is still stay focused on providing the right solution for the right business area.  SaaS and Cloud get a ton of hype, and in many cases, rightly so. However, whatever technology you may choose, it should make the business better in the most efficient and productive way.  Ignore the latest fad, hype, or buzz, and make the call the strikes the right balance.