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Cloud Computing FUD Muddies SaaS Waters

Vendors adopting cloud computing strategies are disparaging SaaS in a manner that could jeopardize their entire service-based business model just as it's starting to gain larger acceptance in the market.

Consider the FUD-ful aspects of the statement made by Don Klaiss, CEO of open-source enterprise resource planning (ERP) vendor Compiere, when it announced that its product will be available on Amazon's cloud platform:

Traditional SaaS offerings inherently restrict the customer’s ability to customize the solution, require co-mingling of sensitive data from various customers, and force all customers to comply with upgrade and downtime schedules dictated by the vendor. SaaS customers are required to sacrifice freedom and control for the convenience of the hosted SaaS model.

Fears about co-mingling of data have been completely disproved, and NetSuite and Salesforce.com have demonstrated that SaaS instances can be easly customized with legacy on-premise applications; Informatica is one of many vendors that offer data quality tools remedying data pollution issues.

But the most laughable aspect of Klaiss' statement is the implication that cloud computing is somehow immune from the scheduled and unscheduled downtime issues that SaaS customers have to contend with. Just have a look at the fine print of Amazon's Web Services license agreement:

you acknowledge that: (i) your access to and use of the Services may be suspended for the duration of any unanticipated or unscheduled downtime or unavailability of any portion or all of the Services for any reason, including as a result of power outages, system failures or other interruptions; and ... we shall have no liability whatsoever for any damage, liabilities, losses (including any loss of data or profits) or any other consequences that you may incur as a result of any Service Suspension.

It's easy to understand why Klaiss felt compelled to make this statement; competing BI vendors like Business Objects, Cognos, SaS, and LucidEra, have jumped on the SaaS bandwagon.

But SaaS consultant Jeff Kaplan of THINKstrategies notes that cloud computing owes its burgeoning success to the inroads made by pioneering SaaS vendors. Kaplan wrote in a recent blog post that "I continue to be concerned that uneducated IT/business decision-makers will reject SaaS offerings because of the inadequacies of the less mature cloud computing services." [emphasis mine]

Cloud computing vendors need to start by acknowledging that stuff will go wrong (as the recent Microsoft Azure outage demonstrated). Writes Kaplan, "trust is the most important reason why companies of all sizes decide to fully engage with a vendor. Trust is achieved by delivering the functionality you promise, but also by providing the support they need in case something goes wrong."

And while you're building trust, stop spreading FUD about others that will ultimately undermine your own business model.

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