I’m just wading through my mass of Google alerts and I found a really great article on ZD Net by Cath Everett called Five cloud computing myths exploded.
She says that Cloud computing is “one of the most over hyped phenomena to have hit the IT industry in a long time”. There’s certainly a lot of hype surrounding the Cloud, and specifically SaaS. But that’s because it really is a game changer. If Microsoft say they’re making it their #1 priority, it’s got to be pretty big.
As regular readers of this blog will know, the UK’s biggest software firm, Sage, have also made a move on the SaaS accounting space. So do believe the hype.
The article talks a lot of sense. There’s only one point I disagree.
On “Myth 4: Flick a switch and your IT shifts to the cloud” she says:
The reason why cloud services are comparatively cheap is they are not customized for individual clients, which allows providers to take advantage of economies of scale to reduce costs
If I was writing a list of reasons why cloud services are so much cheaper than traditional software, that reason wouldn’t feature anywhere near the top.
Firstly, there are no CDs to produce or boxes to ship or middlemen (retailers, distributors, etc) to pay.
Secondly, there’s only one copy of the software – making support a doddle. Id hate to have to support thousands of users using different versions of KashFlow. It’d be a nightmare. With them all running off a single-instance on our own hardware, it’s easy.
I remember a few months ago I was having lunch with the former Chairman of a very (very) large software company. His question was “How can you possibly make money from SaaS?”. My response was “How can you not make money from SaaS?”
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This entry was posted on Saturday, February 7th, 2009 at 11:05 pm and is filed under Cloud Computing / SaaS, Technology, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
@duane: Cath is one of my old journo buddies and you can be sure she’ll have researched this to within an inch of her existence so don’t be too quick to tear her one.
“Id hate to have to support thousands of users using different versions of KashFlow. It’d be a nightmare.”
I’ve supported tens of clients using different versions and editions of Sage.
Even with those small numbers, it is a nightmare, trying to remember what developments came in with what version, where different functions are in different versions, and what you can do with 50 that you can’t do with Instant.
One copy of the software? Pop the champagne.
“The reason why cloud services are comparatively cheap is they are not customized for individual clients, which allows providers to take advantage of economies of scale to reduce costs”
As you say Duane, there are many other reasons why cloud services cost less. And there’s no reason why cloud services can’t support customisation. For example we support custom fields in our cloud based CRM so that businesses can record and use information that is specific to their business.