Australian CIOs all set for the cloud in 2011

With onshore infrastructure and services becoming largely available Down Under, CIOs from Australian companies are starting to set their sights upon the promises of the cloud, analyst firm Ovum reports.

“Beyond the hype and promises, the normal rules of business haven’t changed. Cloud Computing’s ongoing march will be relentless. However, CIOs should ensure their decision to implement cloud services in 2011 is based on a strong business case and not on the back of industry hype, if they are to avoid costly project failures," observed Ovum’s Research Director Kevin Noonan.

In a new report, Ovum analyst Stephen Mann warns that CIOs who do not take the right approach to SaaS might find their application portfolio is more expensive, slower and worse than before.

Stephen Mann, Ovum analyst said, “SaaS is now becoming a mainstream part of the corporate IT mix but using it for the right reasons, in the right places and in the right way within an organisation is crucial. CIOs need to establish this before embarking on an implementation project.”

The report acknowledges the many benefits SaaS can deliver. In particular, a subscription-based pricing model can focus IT resources more precisely on business-critical services rather than on systems that support IT operations.. However it states that while it may give the illusion of being cheaper, faster and better, in the long-run outcomes can be more expensive, slower and worse if a strong business case is not formed.

Mann said: “In our view SaaS is the biggest shift in the IT management product landscape in the last five years. There are many issues to consider and CIOs need to ensure they are on the front foot on areas such as policy guidance for employees when they take the plunge.”

Ovum offers five issues COIs should consider to ensure that SaaS applications are a welcome addition to their enterprise IT portfolio:

  • Don’t assume that it isn’t already happening in your organization. There are almost certainly pockets of end-user-driven SaaS adoption in your organization already. Find out what is going on.
  • Don’t assume you can, or should, ban SaaS. If people decide they need/want/prefer a SaaS wiki or content-management tool to meet a business need, they will find a way unless you provide a viable in-house alternative.
  • Provide policy guidance. Be on the front foot with providing users with policy guidance about SaaS applications and cloud computing including when to use, for what, and how to manage them. Provide clear guidance on security and data privacy obligations and strategies for avoiding unwelcome “lock-in” and loss of ownership of data.
  • Include SaaS in the architecture. Investigate the integration implications of SaaS APIs and build integration solutions into the enterprise architecture. Provide proactive architecture policies and standards for integration between SaaS applications and existing on-premises applications.
  • Add SaaS to the enterprise IT offerings. Consider the merits of adding selected SaaS applications to the formal enterprise IT portfolio as “quick and easy” solutions, perhaps within a framework such as NEC’s Applications Net which provides single sign-on and aggregated billing for a menu of SaaS applications.
  • While SaaS can be viewed as an unwelcome way for adventurous business units to short circuit the IT organization, it is also a new weapon in the CIO’s arsenal of tools to meet users’ needs. CIOs should embrace SaaS within the enterprise IT portfolio and be on the front foot to ensure that SaaS applications are used for the right things in the right way. In many ways, SaaS is like public transport and on-premise software is like owning a car. Both are good for different journeys, but tears result when user expectations are not aligned with the characteristics of the mode of transport or unqualified drivers are at the wheel.