Will the move to the cloud lead to an IT market melt down?

I have been leading up the deployment of a software as a service project inside our company since March of this past year. The project has gone really well and it has let me flex a lot of project management muscles that had atrophied over the previous few years. Its also given me a first hand view into the rewards and perils of purchasing software as a service.
When we got close to a purchase decision last spring, we had two options: one solution was available as SAAS only, and the other could be hosted (not exactly SAAS) or brought in house and run on our machines. The decision was pretty easy when IT told us that it would be 3 months before we could have the machines in place to even start the installation process if we wanted to run ourselves.  We did what a lot of companies are doing: picked the easy short terms answer to get to production as quickly as possible: we went SAAS.  The promise was just too enticing to pass up: 150 users up and running around the world within 24 hours or a purchase order.
Now 6 months in to it we are starting to run into a few issues.  To be clear, these have nothing to do with our particular vendor (couldn’t be happier with them!), but rather are endemic of the entire SAAS model.  We are staring to realize that the more successful we are using the application, the more trapped we become.  The more we use the software and add data to our instance, the more valuable it becomes to us and the less we are able to make a change in the future.
It seems to me that there is an analogy what happened with the housing market.  There people jumped at adjustable rate loans with low teaser rates, not really putting a lot of thought or value into what might happen later.  Some psychologists argue these sort of offers (get now, pay later) actually exploit a bias of all human brains.  Now we see the results – a meltdown of great depression proportions.  I think the SAAS market is taking advantage of this same bias.  The flaw that lead us to the economic meltdown was the assumption that housing values would always go up.  When that turned out not to be true, things started to unravel.  On the SAAS side, the assumption most people make is that the vendor will always have the functionality required to get the job done.  It will be interesting to see what happens as that assumptions starts to be challenged.






2 responses to “Will the move to the cloud lead to an IT market melt down?”

  1. Greg Vialle Avatar
    Greg Vialle

    I just read this article which seems to be tangentially in touch with yours:

  2. Robin Capper Avatar

    Interesting, maybe the hybrid cloud solutions (software + service) are a better bet longer term?

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