Where Does the Cloud Lead Us?

I work in IT.  Have you ever thought about the cloud paradigm shift going on in IT and where it eventually leads?  I can envision a future where everything is software as a service (SaaS).  Economy of scale drives it.

Businesses are in business to provide value to their customers; they invest in core competencies that maximize competitiveness.  IT is a means to an end, a cost center.  Businesses invest in IT until there is a better alternative.

SaaS providers have economy of scale working in their favor.  It enables them to invest and keep investing to create world class services.  Their services are a profit center.

Your IT department doesn’t have enough users to compete long term with SaaS providers.  Eventually the SaaS provider will have invested enough to offer a compelling alternative to your traditional IT.  They’ll invest in better marketing than your IT department and win the mindshare of your management.  They’ll do all this without requiring any capital expenditure from your company.

If this is the future and “resistance is futile,” what can you do?

  1. Accept the eventuality of it; don’t hide under a rock.
  2. Learn how SaaS providers achieve economy of scale.
  3. Bulk up on your SaaS and multi tenant development skills.
  4. SaaS will take time to fully mature so align yourself with strategic assets.  They’ll be the last to go.
  5. Think of ways to apply the skills and increase your work’s economy of scale; your asset will last longer.
  6. Consider employment with a SaaS provider.

Still not convinced?  Maybe your work is critical to your company.  If so then there is a good chance you have something another company needs; create your own SaaS offering.  Each new tenant is pure profit and offsets your development costs.  Soon you’ll have reason and enough funding to turn your enterprise class service into a world class one.

I think the cloud leads all of us to SaaS, either as a provider or as a consumer.  If you’re not going to be the SaaS provider, someone eventually will.

Is this good or bad?  Leave a comment to share your opinion.

Comments (5)

  1. agricfowl says:

    I think security could scupper that plan as Cloud Computing currently means trusting someone else with your data.  

    Very good article and something l intend to take onboard.

  2. DavidHardin says:

    I recently wrote in a post that software as a service (SaaS) providers have economy of scale advantages

  3. DavidHardin says:

    I recently wrote in a post that software as a service (SaaS) providers have economy of scale advantages

  4. david.hardin says:

    Thanks for leaving a comment.  Cloud security is an interesting topic.  I jotted down some ideas in my next post:


  5. david.hardin says:

    Just watched a presentation by David Cearley of Gartner Research predict that virtually every company with a CIO will become a cloud computing provider within the next 5 years.  They'll provide application services, information services, and/or full business process services such as Amazon's fulfillment service.

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