From the vendor perspective, are they pushing or holding back on delivering Software-as-a-Service in the cloud?
Well, there are certainly many software vendors who have held back because they had great business models in the old delivery paradigm. Almost all are adapting now. I think there are lots of reasons this appeals to vendors, but three primary reasons stick out:
- Revenue smoothing. Software sales — and in particular enterprise sales — are very lumpy. It is feast or famine. What vendors like is there’s a nice predictable revenue stream.
- Piracy prevention. Prior to delivering software in the cloud, hackers were always trying to break into software and license keys were always floating around in some digital form. Delivering via the cloud stops piracy as it is very easy to check credentials each time users log in on the Web.
- Support costs. Supporting multiple versions of software that is deployed on different forms of media can be costly. Version control management was often a multi-staffed function, keeping up with the various versions deployed.
Where do you think we are in the transition process in business?
I still think we are in the early stages — less than 10 percent there. In our business, the vast majority of companies still keep their phone systems in the back closet and pay someone $125 an hour to come out and make a change to them. They don’t think about all the capability of a cloud system or worry about it until there’s a crisis. Most companies are still figuring out how to use the cloud and whether or not they’ll use the public cloud, private clouds, or hybrid clouds. There are still a lot of questions out there, but that’s a great thing!
MARK SWANSON is the CEO of Telovations, Inc. Reach him at [email protected].
