SaaS: It's All About Trust, Isn't It?

Like you, I subscribe to various news feeds. 

Most of them pass by as the usual info-smog we've all grown to be so accustomed to.

But today, I saw one that made me stop and thing a bit about an important topic in a new way.

And that's SaaS -- generically known as Software as a Service.  For me, the topic is a bit broader, and includes any IT capability that could be delivered as an external service, and not just software.

What I Read

Comments from the head of Google's Enterprise product division that basically was complaining that CIOs should open up to the idea of SaaS in their organizations.

He goes on to list all the benefits categorically -- and many of them make sense.

I have a different perspective.

I think that the CIOs I meet are very receptive to IT as an external service.  Just not from Google. 

And I think it's a trust thing.

CIOs -- Between A Rock and A Hard Place

I must have had the same strategic discussion about external IT service providers with CIOs (or near-CIOs) about two dozen times.

They want to consume IT as an external service.  Really, they do.  They want to get closer to the business, act more as a consultant to the business, and spend less of their time running the plumbing, so to speak.

The business wants to do all sorts of interesting things.  Everyone of them has a compelling business case, and can be done with existing technology. 

And they generally know they can't keep up if they use the same, old tried-and-true approach to managing IT.

Right now, they're telling me they face two hard choices in pursuing these paths.

On one hand, they've got the traditional SI/outsourcer crowd.  The proposal is usually for big projects and high-risk propositions that require major investments and some pretty hairy bets. 

My impression CIOs would like to work with these folks in a more selective way (a-la-carte?) but, frankly, they haven't met too many traditional SI/outsourcers that are interested in a function-specific relationship. 

They can find a way to trust these guys, but the proposition on the table is just too massive to consider all at once.

And, in the other camp, are the newer players -- folks like Salesforce.com, Google and a few others. 

CIOs generally tell me that it's hard for them to trust these folks to continue to meet their needs.  I think Salesforce.com is closer to bridging this "trust" gap than most of the crowd.

But Google -- as an IT brand -- has a long ways to go in closing this gap.

CIOs care about availability.  Security.  Flexibility to adapt to new requirements.  Ability to integrate different things together in useful ways.  You know, the usual world of corporate IT.  It's not always all about cost, folks.

None of these attributes necessarily spring to mind for me when I think about Google.  Maybe it's there, maybe it's not -- but it's definitely not part of the brand.

I think Goggle is a great company doing great things -- just not the things I mentioned.

A Couple of Thoughts on SaaS.

First, I think the term is lacking in terms of its technical accuracy.  I am adamant that the real market here is selective IT capabilities provided by an external service.  I hate calling it SaaS, because it's a bigger concept.

There definitely seems to be a Goldilocks problem here.  Traditional SI/outsourcers are too big.  The newer players may be too small in their capabilities.  Will there be anyone who's "just right"?

And, like any other IT player -- SaaS or otherwise -- there's going to be a long, slow and slogging road for any player in this space to build trust with CIOs that their new partners actually understand corporate IT, and can deliver the goods.

And I think that the most trusted names in IT are probably in the best position to address this market -- if they think about it the right way.

Comments

[Fred San]

Regardless of size of outsourcer, the biggest problem is how are you going to get your data back when the relationship goes sour? And even if you get it back, where are you going to put it? Go with another outsourcer? Well how are they not tarred with the same brush? A CIO's lot is not an easy one! The more our companies rely on the data, the less sense it makes to give the crown jewels to some outsourcer. I have just gone through the excrutiatingly painful exercise of getting the incoming outsourcer migrating the data from the outgoing outsourcer. When I look at the invoices, I feel that I could have built a brand new data centre for less and gained back control of the company's IP.