SaaS - Software as a Service is a Deadly Vortex

And, like many vortexes, an intelligent individual is best served by clearly understanding the risks before diving in. The true bottom line behind Software as a Service is that:

SaaS represents your complete lack of control over your access to the products and data you use to manage your business.

Think it through. When we possessed the software products locally we could utilize those products and access our data at any time and, as long as we remained within license terms, in any manner we wished. We were not locked in to the availability of Internet access or the good graces of a service provider. We had a perpetual license, meaning we paid a single initial fee to use the product for an unlimited amount of time. SaaS will end these options and lock us in to a single source.

Once you have moved to SaaS, you will be paying a yearly rental fee on the products - one that can be changed at any time. The Service Provider will control a high percentage of your access and your ability (or lack of ability) to connect to the Internet will control the remaining access. What's more, if you have any disagreement with your service provider, they can shut you down with the flip of a virtual switch.

Want to hear more? Consider watching and listening to this short Flash overview of an Institute on-demand Knowledge Briefing covering SaaS & Cloud Services. The introductory session is only a few minutes long and includes excerpts from a live software asset management professional development discussion.


You can link to the session HERE. If the content resonates with you, feel free to contact us about the on-demand asset management training programs at The Institute for Technology Asset Management.

Are you drinking the "Cloud" fruit punch?

There are literally tens of millions of dollars being spent in a campaign to convince you that cloud computing (also being referred to as SaaS or software as a service) is the next best and greatest thing for managing the business technology portfolio. While I won't argue that, in some instances, offloading your controls of specific technology requirements may not cause a problem, I recommend you carefully consider any cloud-related decision from a perspective that is both tactical and strategic (short term as well as long term).
    Since the early 90's I have been recommending that smart business management absolutely needs to adopt an intelligent business process improvement framework to help minimize costs and risks while maximizing the ROI on business technologies. Cloud computing is a great place to start your technology asset management improvement initiative. 
Consider: A majority of your current licenses for operating systems and software are perpetual - you pay once for the use of the product and you do not have to pay again until you upgrade or change products. In many cases this single up front payment permits you to use the same product for five or more years - only requiring change when absolutely necessary.
    Moving to the cloud will take this level of cost control away from you. No matter how prettily the software industry tries to wrap the cloud package, it will always look just like a yearly subscription fee once you get past the honeymoon stages. (You will be paying for the product again and again, every year you use the service.)

Bottom Line: Higher software costs...

Consider: This yearly fee for access to operating systems or software is the TOP reason why mainframes have been priced nearly out of existence. The problem isn't merely the carefully crafted yearly fee structure that magically keeps changing. Instead, the core problem with the yearly subscription model is that, once you are committed to it, the copyright holders are well aware that conversion costs will literally force you to accept any changes they choose to send your way. (I've seen countless examples of companies under yearly subscription plans being held hostage with threats of "...reduced or discontinued access unless you agree to this new contractual change...") After all, once committed, what are your options? With the cloud licensing model you have given up virtually all of your negotiations capabilities.

Bottom Line: You'll Take What They Give You...

Consider: The vast majority of enterprises operating at any level around the globe do not honestly read or understand the licenses, terms, and conditions that govern their acquisition and use of operating systems and software. (After all, if you genuinely understood the onerous vendor licenses, you probably wouldn't accept the majority of these agreements.) The cloud agreements are even more deadly - read them. (Now, read them again and note all the "We have all the rights - You have all the responsibilities..." clauses.)

Bottom Line: They're Not Going to Give You What They Say They're Going to Give You...

Consider: Under the current licensing models, you – the business technology consumer – determine when you will move to the new releases or versions of products. There are plenty of costly land minds you have to negotiate such as: will your computers support the new product; or will the new product be compatible with all your other software; or will the new product be compatible with your printers or other devices. Managed incorrectly, your costs for a single upgrade could easily exceed the value of your existing hardware base.
    Moving to a new product under the existing license is determined in-house or, in worse case scenarios, when the provider refuses to support that perfectly acceptable product you purchased six years ago. Under the cloud, you'll move to the new product when the supplier says you'll move. After all, your hardware and compatibility issues are of no concern when you have no cost-effective alternative, right?

Bottom Line: You'll No Longer Control Upgrade Frequency of Software or Hardware

Consider: Coming full circle to my original comment - All this money being spent on the hard sell for cloud computing isn't being spent to educate you about the wonderful new silver bullet business technology solution. Instead it is being spent to ingrain the new "miracle service" in the executive psyche and ensure that business technology consumers fail to recognize the true costs and risks relating to relinquishing control over the systems your enterprise must rely on to survive.
    Prior to any cloud-related decision, conduct a seriously honest and scrupulous cost-benefit analysis. This step alone could help you reduce the artificially inflated costs and risks relative to virtually all business technology goods and services. If you want to increase the real world return on your technology investments, THIS is one of your key steps toward successful business process improvement.

Business Technology Asset Management: How SaaS is Going to Cost a Bundle!

Listen in as Al Plastow discusses how software as a service is going to cost your company more money while taking away your control over the software you depend on. This quick audio excerpt was taken from a Business Technology Consumer Network software life cycle management training session.

The subject matter includes:

• Loss of perpetual licenses,

• Increased costs due to yearly software “rental,”

• Denial of service for non compliance...

Software Asset Management (SAM) is one of the core professional service areas within the over-all scope of enterprise Technology Portfolio Management (TPM). Virtually any company, of any size, could reduce the costs of business technologies by as much as 25%-30% through simple low cost changes to the business processes governing technology spending.

Click to listen to this 30 second audit cut: Business technology: How SaaS is going to cost you more—in cash and in lost control over tech!

It's Al in your head! (Now, THAT is a chilling thought...)