Software Evaluation for Cloud/SaaS – Part 2

Software Selection for Cloud/SaaS – Part 2

The following post is one of contributions for the SupplyChainBrain 2011 Resource Guide (#SCB2011RG)  this post refers to how software selection is rapidly evolving when evaluating cloud and SaaS software.  The TCO and ROI are calculated differently as on-premise software.  Organizations should be cognizant of the different criteria and perspective involved when selecting cloud and SaaS software.

This post highlights analyst outlooks for 2011 when evaluating cloud enterprise software solutions.  Some tips on what to look for and what should be included.

Analyst Insight

Now that cloud/SaaS computing have become a legitimate technology option for organizations there is now even more confusion in selecting this type of software.  A change in buying behaviour has occurred as to what factors need to be examined when purchasing a cloud/SaaS solution. Factors such as security, integration, business agility and total cost of ownership (TCO) require further investigation than before which all impact monthly costs.

The ongoing concern of security for cloud/SaaS solutions is still very much misunderstood. In the cloud environment many factors that influence security are tenancy, delivery models, architecture etc.  These aspects must be understood to properly assess the pros and cons of cloud computing.  Security standards are now in the mid-maturation phase with SaS 70 1&2 leading the way.  There are many other standards that need to be investigated such as federal, industry specific, vertical standards as well as session security by users is also a consideration.  Security standards such as SaS 31, SaS 80, PCI, DSS should be investigated thoroughly when making a SaaS or cloud solution decision.

Integration is still a key issue when integrating a cloud solution into your IT/services mix.  Organizations are using the cloud for adding a new system or service, or using the cloud to integrate existing systems with new services. By using the cloud as a platform to integrate disparate systems this approach provides key infrastructure that you do not have to build which saves time and money and lowers overhead costs.  As with any technology purchase due diligence still must be completed as the same obstacles of implementation, data migration, training, change management and project management must occur for a cloud integration to be successful.

Organizations are placing a greater importance on the ability of a system to adapt to its rapidly changing business needs. Business agility has found its way as an important criteria that is heavily weighted in the decision making process. Selection is just not about features and functions only anymore. There are new complexities such as can your system accommodate changes to any business processes, will the system allow us to facilitate growth, is vendor engagement necessary and the ability to make “on the fly” changes to data structures, fields and workflows need to be considered as part of the new buying process.

Total cost of ownership when selecting a cloud/SaaS solution has become increasingly difficult. There are additional factors that influence the monthly costs and overall TCO and ROI of the system.  A different type of analysis is required when comparing SaaS options and are further required when comparing an on-premise with a cloud solution. Factors such as SLA’s, uptime performance, redundancy planning, storage, archiving, network usage, transaction usage, vendor lock-in and vendor viability are all different aspects that need to evaluated when selecting a cloud solution.

Analyst Outlook

A shift in buying behaviour which includes security, integration, business agility and TCO has come into play when evaluating enterprise cloud/SaaS solutions.  Organizations that are considering cloud solutions need to be more diligent in the selection process as opposed to an on-premise system. Since there are many extraneous factors and various software options available true TCO and ROI have become difficult to calculate.

See part 1 our SaaS/Cloud software evaluation part 1 from last year’s resource guide

Eval-Source is consulting firm that provides enterprise software selection and strategic consulting services for organizations to achieve success in their IT initiatives. Our Tru-Eval selection system allows organizations to avoid IT failure, receive greater ROI and provide accurate decision support for enterprise software. Our strategic consulting practice encompasses cloud computing services, cloud evaluation services, technology planning and business process optimization.  Eval-Source is an industry leader in the analysis of software technology and our thought leadership has placed us in the elite of consulting /analyst firms.

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Jim Love, Chief Content Officer, IT World Canada

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