The Cloud Lock-In (Part 3): SaaS is Really Nice

This is the third and last post in regarding the cloud lock-in. In the first and the second parts I covered the vendor lock-in of IaaS and PaaS. The appealing registration and the low cost overwhelm the new SaaS consumers that often makes them forget that eventually the service will become something they just can’t live without. What will happen if one day your SaaS vendor goes out of business ? In this post I will try to cover the threats and the actions the enterprise should take in order to lower the level of the SaaS lock-in risk.

>  >  >  How does the lock-in of a SaaS application differ from a traditional on-premise application?

SaaS use is actually the consumption of servers, operating systems, middle ware, network connections and more. Switching a SaaS vendor is much simpler as these are not located in your site – shifting to another vendor mainly includes migration of the data without the hassle of ripping and replacing the full app stack. This cheerful answer also provides a less costly and less complex switch than the painful effort and the risky investment of moving an on-site software.

Let’s consider a simple case where an enterprise uses a single application stored in a simple cluster, without any massive investment in middleware or integration. In such a case, switching from one SaaS solution to another is not so different from switching from one on-site application to another. The main issue regarding the SaaS vendor is to make sure that the data can be transferred to the hands of the enterprise at any time. Today the most common methods are to enable the export of reports in a CSV format and to download the full database. Even in this simple case the actual migration in the SaaS case will be easier because the company doesn’t need additional sets of hardware infrastructure for the migration to take place. Furthermore SaaS vendors develop import tools so that a new customer will can easily migrate the data, whether it is in a raw spreadsheet or even in the format of other SaaS vendors.

>  >  >  The SaaS lock-in story gets complicated when integration and customization are needed.

The advantage of the ready-made, easy-to-use online application can sometimes be a disadvantage. The SaaS application might not be flexible enough to support the business needs and the enterprise might need to customize it or integrate it with other services. This integration leads to an increase of the lock-in level as the enterprise develops dependency on professionals such as the SaaS vendor team or a cloud integrator that will stitch the different solutions together to support the business complete work-flow. In this case the enterprise might find itself locked not only on each individual SaaS app, but also on the integrator’s skills and services.

The integration needs might be solved by SaaS vendors that are surrounded by a large ecosystem of plug-ins and out-of-the-box integrations with other online services. In his recent short post Geva Perry talks about the impotency of the eco-system by demonstrating the huge advantage of a cloud vendor that has a great “pre-integrated eco-system”:

“I was recently asked to recommend a CRM system to one of the startups I am on the advisory board of. As much as I dislike the complexity and poor performance of Salesforce.com, I had no choice but to tell them it’s the only way for them to go — for the simple reason that it’s the only CRM SaaS offering that is guaranteed to be pre-integrated not only with every app they need today, but also with ones they will need in the future, which may not even exist yet.”

IT management and control must be implemented and balance must be kept to avoid the uncontrolled sprawl of online services without a rational and orderly structure. The loss of control can lead not only to an extreme lock-in but also to problems with compliance and security. Considering this risk, the enterprise might find that the use of PaaS make sense and can fulfill some of its custom needs.

Learn more about PaaS Market and Vendor Lock-in

>  >  >  My Conclusion: In the cloud the customer decides.

Lock-in is one of the basic hesitations of  the enterprise when considering new technologies. Today, I can move my Power Point presentation to Google Docs or Slide Rocket. The developer can choose to store the DB on a local virtual machine or on an IaaS platform and later on migrate it into a DaaS platform. Experienced customers are burned out by the traditional IT vendors on the matter of lock-in and today they demand that the industry change and prove a low level of vendor lock-in.

Check out the following interview (brought to you by Bloomberg) with Mark Benioff, the CEO of Salesforce, the most veteran SaaS vendor in the world. Benioff talks about the Oracle false cloud and the traditional IT business in contrary to the new cloud world. In his words, I think that he brings the essence of what’s cloud is all about:

Cloud vendors invest a lot on making an intuitive UI/UX, to make sure that the learning curve of the new user will be short. They also develop and support migration tools and services to make it easier for the new customers to leave their competitors and quickly adopt their offering. Additional new online services are developed fast and the eco-system should not be compared to a traditional integration. It provides a real strategic business benefit for the customer as well as for the vendor and it is part and parcel of the cloud environment. Beyond all the considerations and thoughts I have in regards to cloud vendor lock-in, without any doubt the cloud supports a much more competitive and flexible IT world.