Transition Success or Failure in the Cloud: Executive / Financial Challenges

As Cloud adoption continues to accelerate this year, Saugatuck has initiated a focused research program to refresh and expand our research in ISV Cloud transitions. The first wave of these transitions was rather uneven in results with notorious failures and many expensive lessons learned. Moreover, this research will reflect the evolved set of issues and challenges brought about by the shift to the Boundary-free Enterprise™. This applies equally to pure-play Cloud ISVs entering the market as well as traditional ISVs evolving their offering portfolios with new Cloud solutions.

Today’s Cloud platforms are far superior in enabling ISV Cloud transitions and their ongoing operations. Nevertheless, those significant business challenges do remain both for pure-play startups as well as established on-premises ISVs transitioning, primarily in these seven areas:

  • Executive/Financial
  • Technology
  • Operations
  • Sales and Marketing
  • Partnering and Alliances
  • Organization
  • Culture

Executive / Financial challenges are of critical importance, as they pertain to the conception, funding, compliance, profitability and financial oversight, choices of acquisition versus organic growth, the maintenance or transitioning of legacy offerings, and management of the brand image with respect to the new Cloud offering. Thus, successfully meeting and managing the Executive / Financial challenges sets the tone for all other dimensions of this complex transition.

Two areas of challenge that we would call special attention to are “rethinking the business offering” and “understanding regulatory issues, “and we offer these executive viewpoints below to illustrate their importance. The first of these argues against simply moving an established on-premises offering to the Cloud unchanged. It is also critical to understand the regulatory issues associated with your Cloud offering. These vary from what may be required in the United States, according to commercial priorities and governmental requirements, for example, in Germany, Singapore, and Hong Kong. Data security and privacy, in particular, is a sensitive issue.

While it may be necessary to mount a Cloud solution, it may not be sufficient, unless the solution includes advanced capabilities that buyers expect, such as support for mobile devices, or social networking or data analytics, either embedded or loosely-coupled, all aspects of what we term the Boundary-free Enterprise™. It is worth planning for the enhancement of Cloud solutions that incorporate Collaboration, Social, Mobile, Analytics – as well as integration between Cloud and on-premises data assets.

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Mike West

About Mike West

Michael West is Vice President with Saugatuck Technology. His areas of research and consulting expertise include Cloud Computing, “Enterprise Ready” SaaS, ISVs in transition to SaaS, Cloud and Mobile Development platforms, SaaS Integration, Social Computing platforms, Mobile Commerce / Mobile Payments and GRC. In 2000, Mr. West joined Saugatuck as an early co-founder after leaving Gartner, Inc., where he served as Vice President and Research Director. In 2004-5, Mr. West spent a year in Washington, D.C. at the Corporate Executive Board as Practice Manager of the Information Risk Executive Council, before returning to work at Saugatuck and re-focusing his interests on Software-as-a-Service and Cloud platforms. He has written and presented research on information management, data administration, applications development, application integration, object technology, client/server architectures, mobile commerce / payments, graphical user interface and usability strategies, web site development and Internet applications, network computing, electronic commerce, portals, hubs and communities. Mr. West has an A.B. from Williams College , M.A. from Johns Hopkins University and M.B.A. from the Boston College Graduate School of Management. He has taught IT Strategies in M.B.A. programs at the Boston College Graduate School of Management and at the Haas School of the University of California at Berkeley.