SaaS Horror Stories Are Starting to Appear - InformationWeek

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Commentary
10/5/2009
02:29 PM
David Linthicum
David Linthicum
Commentary
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SaaS Horror Stories Are Starting to Appear

My fellow cloud guy and twitter buddy, James Urquhart of Cisco, and I were kicking around the notion that few cloud horror stories have yet to emerge. I've seen a few, but most of those who have issues with cloud computing are reluctant to go on record with their problems. Here's an exception...

On Twitter, my fellow cloud guy and twitter buddy, James Urquhart of Cisco, and I were kicking around the notion that few cloud horror stories have yet to emerge. I've seen a few, but most of those who have problems with cloud computing are reluctant to go on record... That is, until this story by Tony Kontzer, who does a great job highlighting some issues that Pulte Homes had with cloud computing, in this case, issues with a SaaS vendor.

"Well over a year ago, Batt told me that his confidence in the cloud had been destroyed. He'd made an aggressive leap by deploying a large IT vendor's on-demand CRM application, imagining all the benefits he'd been told about, both by the vendor and his peers at other companies. He and his staff spent weeks ironing out all the integrations between the CRM application and several other IT systems, a process that proceeded smoothly. But when it came time to make changes to the CRM configuration, all the other applications went down, forcing Batt to uncouple everything and rethink things. It was easy to understand his frustration."

That things went wrong was not the issue; the core issue was that Pulte needed more time before the SaaS solution became operational, but the SaaS vendor (not mentioned) refused to cut them any slack on the agreement and demanded payment, else their service would be discontinued.

I bet that, legally, the SaaS provider is on firm ground. They signed the agreement, and thus they are being asked to live up to it. Truth be told, there is not much of a difference between cell phone agreements and cloud computing service provider agreements, and you have to be careful of what you sign, understand the terms, and any remedies that you may have. I've worked through many of these agreements in the past, and, in many instances, the starting point for those agreements can be tantamount to usury. Make sure to outline SLAs, and how billing will be adjusted in case you have to scale up or down.

My advice is for the SaaS provider to work with their customer here, no matter what the agreement states. You may save a few thousand, but you'll lose millions in bad PR and word-of-mouth in CIO-to-CIO communications, trust me.

Pulte found out what a lot of those who deploy SaaS or other cloud computing solutions are finding out these days: It's harder than it looks. Integration and other issues are typically overlooked when moving to SaaS, but they become large issues that can impede a successful SaaS deployment. That seems to be the case here. At the end of the day you're adding another enterprise system to your portfolio, and you have to map out an installation, testing, and acceptance plan, even if the system is not something you host nor own.

I figure we're going to see a few of these stories in the months to come, as more and more organizations deploy cloud-delivered solutions, such as SaaS, and determine firsthand the upsides and the downsides.

On a personal note, my new book "Cloud Computing and SOA Convergence" is out this week. I hope those who need some practical and straightforward advice on the right and wrong ways to deploy cloud computing solutions find this book useful. I enjoyed writing it.My fellow cloud guy and twitter buddy, James Urquhart of Cisco, and I were kicking around the notion that few cloud horror stories have yet to emerge. I've seen a few, but most of those who have issues with cloud computing are reluctant to go on record with their problems. Here's an exception...

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