SaaS and cloud computing: a low priority for 2009?

13 March, 2009

I was interested to read Silicon.com’s “CIO Agenda 2009”, summarising the priorities for 2009 IT spending as identified by twenty-five IT directors and CIOs.

Security came top of the list (I wonder if it ever doesn’t?), followed by virtualisation and IT governance & measurement. Software as a service (SaaS), and grid and utility computing, came a long way down the list. So does this mean that claims about the growth of SaaS and other hosted services are hype?

It clearly shows that some of the more enthusiastic claims made for cloud computing are over-hyped. As another article pointed out recently, there are good reasons to doubt that enterprise software is going to disappear into the cloud en masse. Locally-installed software – whether on an internal server or individual PCs – continues to have many benefits over systems accessed over the internet, ranging from speed to resilience.

In any event, much of the move to SaaS and hosted services is supplier-driven rather than customer-driven. I’m not surprised that CIOs are making SaaS a low priority, because in most cases the driver for their decisions is not going to be, “How can we get this functionality off our local systems and into the cloud?”

However, when they come to address the higher-priority issues, in many cases they will find that the solutions that vendors are offering them are cloud-based hosted systems, rather than traditional, locally-installed software. That may lead to decisions as to whether cloud-based systems are appropriate for a particular business function, but the end result is that the overall use of hosted services increases, even if that is not a priority in itself for CIOs.

Indeed, the fact that decisions about IT investment are driven (quite rightly) by other priorities is one reason why the crucial differences between locally-installed and remotely-hosted systems can be overlooked. But that’s a matter for future posts.