THINK IT Services

Now I know how Nicholas Carr has felt over the past three years!

Since he suggested in the Harvard Business Review in 2003 that “IT Doesn’t Matter”, Carr has been in the crosshairs of many IT professionals and product vendors who believe his views represent a blasphemy in the cathedral of traditional thinking about the strategic value of technology.

Carr has been alternatively deified and belittled for challenging the established thinking that IT is essential to create a competitive advantage. Instead, Carr has made the case that IT is quickly becoming a commodity which organizations should treat as a basic utility and acquire from third-parties rather than build themselves.

IT staffers or technology vendors whose jobs and products are threatened by Carr’s views have made a concerted effort to discredit his ideas, sometimes resorting to personal attacks in the process.

Yet, Carr hasn’t backed off on his position because he has found plenty of acceptance among corporate executive and end-users who have suffered for years with the ongoing hassles and escalating costs of IT. As a result, he continues to be invited to speak at numerous conferences and other industry events because his views appeal to a broader audience than IT professionals and vendors would like to admit.

In my own modest way, I’ve found myself in Carr’s shoes this week as a result of a column I was asked to write for a special section of BusinessWeek’s Online site examining Software-as-a-Service (SaaS).

My column listed eight myths about SaaS (I had more that the editors chose to cut for space reasons), all of them aimed at debunking any lingering perception that SaaS is just another over-hyped IT fad that will quickly fade away like many others before it.

I relied in my column on straightforward data points from THINKstrategies’ primary and secondary research, as well as anecdotal experiences, to clearly show that SaaS is for real and it is quickly taking root across organizations of all sizes. My points included many that have been made before on this blog and have been stated by others as well. Most importantly, the goal of my column wasn’t to challenge the basic assumptions of the IT industry like Carr has, but simply to show that the SaaS movement is more pervasive than many may realize.

I’m very pleased that my column jumped to the top of BusinessWeek Online’s Most Popular Stories list on April 18 and sits at #3 as this blog entry is being posted. But, I’ve also noticed the number of BW Online readers who aren’t happy with my views.

One BW Online reader suggested that I must be a Salesforce.com shareholder (I’m not) or consultant (also not) seeking to promote the company alone, overlooking the other SaaS providers I mentioned in the column in areas beyond customer relationship management (CRM) and salesforce automation (SFA) areas.

I’ve now learned that the debate sparked by my column has spread to other websites that cater to IT professionals. While it is somewhat flattering, it is also discouraging to discover that many of SaaS’ most obvious accomplishments are still being disputed.

I guess this kind of reaction comes with the territory. But, it also clearly shows that the advantages of SaaS that corporate executives and end-users are experiencing are still being negated by SaaS’ shortcomings which concern IT professionals.

While the pitfalls of SaaS are many–including who controls the user’s data and how to assure greater service reliability–these issues are not insurmountable and do not outweight the tangible benefits of this new software delivery model.

There are a number of important messages that can be gleamed from the negative feedback my SaaS views have recieved:

1. SaaS providers must recognize that there is a dichotomy between the views of IT professionals and corporate executives and end-users regarding the fundamental benefits of SaaS.
2. Providers must do a better job of addressing the technical and operational concerns of IT professionals while continuing to promote the business benefits of their solutions.
3. Enterprise decision-makers should expect their IT staff to push back as SaaS gains greater acceptance among their corporate executives and end-users. They should carefully examine which of their concerns are legitimate and those which are self-serving.

I recently recorded a webinar for TechTarget’s Expert Advice Center re: the “Myths and Realities of SaaS” that identified six common myths about SaaS. These myths are:

1. SaaS is just another over-hyped fad that will only achieve limited market penetration.
2. SaaS is just another form of ASPs.
3. SaaS solutions only address CRM/SFA needs.
4. SaaS is an insignificant sideshow in the evolution of overall software industry.
5. SaaS is easy to deliver and many providers will enter the market.
6. Selecting SaaS is an either/or proposition for organizations.

There are many more myths that I could address, but I’d like to dedicate this post to the myth that SaaS is a simple, one-size-fits-all application solution which inherently falls short in mid- to large-scale organizations which require significant customization and integration.

First, many mid- and large-scale organizations are discovering that their application needs are not as unique or unusual as they thought.

Second, SaaS providers such as Intacct and Oco are adding customization and integration features to their application solutions.

Third, the SaaS providers are establishing ‘ecosystems’ of alliance partners who are designing their solutions to easily integrate with one another. Salesforce.com’s AppExchange is the most prominent example of the SaaS ecosystems of today. SQLFusion has established a comparable clearinghouse of open-source SaaS solutions, such as SugarCRM.

Fourth, a growing array of SaaS solution providers are offering on-demand customization and integration tools, such as Nsite and StrikeIron which has a growing portfolio of application program interfaces (APIs).

Finally, many organizations recognize that SaaS isn’t a panacea that can solve all of their specific application needs, and are comfortable employing specialized consulting firms like BlueWolf Group or data integration companies like Pervasive Software to address their unique IT/business requirements.

All of these factors are quickly coalescing to satisfy mid- and large-scale enterprise SaaS customization and integration demands.