3 ways to ensure Cloud benefits meet enterprise needs

Enterprises are still trying to get their heads around the benefits and risks of SaaS and which parts of the company need it the most.

For all the cost-saving appeal of cloud applications -- more commonly referred to as SaaS (software as a service) -- enterprises are still trying to get their heads around the benefits and risks of SaaS and which parts of the company need it the most.

There's no question that SaaS is the fastest growing public cloud category. To gather data on SaaS usage, Forrester surveyed 1,000 IT decision-makers from North American and European enterprise companies with 1,000 or more employees.

In a report by Forrester analyst Liz Herbert entitled, "The SaaS Market Hits Mainstream: Adoption Highlights 2011," the research firm culls the survey data to highlight how companies are using SaaS, what benefits they hope to get out of it and which parts of an organization are driving SaaS purchases. Hint: It's not necessarily IT.

Forrester's survey research indicates that SaaS is used in three main areas: business processes (CRM and human resources), collaboration such as messaging, e-mail, web conferencing (Google Apps and Office 365), and industry-specific processes such as claims management for the insurance industry and sales reporting for retail.

The main benefit that firms hope to gain when implementing SaaS is, not surprisingly, lower costs, both upfront and long-term. Other SaaS benefits include faster delivery of application features, improved support for remote users and better overall user satisfaction via familiar Web user interfaces from the likes of Salesforce.com.

Regarding SaaS purchasing decisions, Forrester survey data confirms that partners and business groups, such as sales VPs buying Salesforce.com or HR departments buying SuccessFactors, are the primary drivers of SaaS adoption. On the other hand, IT developers handling purchases are in charge of procuring cloud platforms (PaaS) and cloud services for collaboration, security and storage.

"Much of SaaS purchasing comes from groups outside of the traditional IT sourcing model," writes report author Herbert. "This has significant implications because it means that organizational units are sourcing their own technology in a decentralized way."

This leaves it to "sourcing executives" -- members of the IT group responsible for defining the business' tech purchasing strategy and negotiating with vendors -- to navigate the needs of business units and make SaaS purchases that have long-term benefits and solid TCO.

But as sourcing executives head to the negotiating table, they need to be wary of cloud hype and think long term. Here are three ways to make sure the benefits of SaaS meet your company's business and technology needs.

Formally Assess the ROI of Cloud Applications

There is a perception that SaaS applications will reduce infrastructure costs by 50 per cent, and eliminate support costs. But this is not a guarantee, writes Herbert.

Despite the potential cost savings of SaaS, there are many hidden costs, she says.

"When considering financial ROI, firms should take into account SaaS price increases over time, extra charges for new modules or features, and add-on costs for areas like mobile and storage."

Continually Measure Usage and Value

Sourcing executives should also do their best to avoid paying for SaaS features that the company may not need.

"Despite the hype that SaaS eliminates shelfware, some SaaS buyers find they pay for subscriptions that are minimally, or not at all, used," writes Herbert.

To avoid this, sourcing executives need to work closely with cloud vendors to understand usage metrics, and then adjust contracts or vendor mix accordingly.

Plan an Exit Strategy

Most SaaS relationships will come to an end, according to Forrester, either because the buyer chooses to switch to another service or the vendor gets acquired or goes out of business.

To this end, Forrester encourages generating relationships with numerous vendors and having an alternate deployment strategy in place.

Also, Herbert stresses the "the importance of having contractual terms such as exit clauses and mechanisms to get your data back."

Shane O'Neill covers Microsoft, Windows, Operating Systems, Productivity Apps and Online Services for CIO.com. Follow Shane on Twitter @smoneill. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Shane at soneill@cio.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags cloud computingForrester ResearchinternetSoftware as a service

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Shane O'Neill

Show Comments

Cool Tech

D-Link PowerLine AV2 2000 Gigabit Network Kit

Learn more >

Crucial® BX200 SATA 2.5” 7mm (with 9.5mm adapter) Internal Solid State Drive

Learn more >

D-Link TAIPAN AC3200 Ultra Wi-Fi Modem Router (DSL-4320L)

Learn more >

Xiro Drone Xplorer V -3 Axis Gimbal & 1080p Full HD 14MP Camera

Learn more >

ASUS ROG Swift PG279Q – Reign beyond virtual world

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Gadgets & Things


Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

ASUS VivoPC VM62 - Incredibly Powerful, Unbelievably Small

Learn more >

Stocking Stuffer

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Best Deals on Good Gear Guide


Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.


Latest Jobs


Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?