This Should Make It Obvious to Anyone

Looking at things from the perspective of how software is evaluated and brought into the enterprise, it's no wonder cloud computing is dramatically changing the landscape. Combine that with the trend of software vendors looking to compliance to shore up revenues, and customers pushing back to reduce their software maintenance costs, and I think we're in for some interesting changes in selling software over the next couple of years*.

In any case, I thought it would be interesting to put together a quick list of how software is piloted in a "traditional" purchase cycle, and how it might be piloted if "purchased" from a cloud.

So, assume a thorough selection process has been completed on a product and its alternatives (I don't think we do that well today either... I think it's too feature-focused and we're not nearly evaluating the "right" things), and we're talking about getting the first small set of people up and running on the selected solution.

Traditional Software Purchase

1. Software is purchased.
2. Hardware is purchased.
3. Space is found in data centers for the production kit.
4. A plan is created for moving into production, often a lengthy process inserted around specific rules/restrictions for changing production systems.
5. Development and test environments are setup.
6. Computer room space is found for the permanent location of the development and test kit.
7. Any databases required to support the application are purchased and configured, including hardware if necessary.
8. Administrative and security staff support is required to configure all this new equipment to company standards, backup procedures, and security policies.

Cloudly Purchased Software

1. Get a login.

Even people who don't know anything about software should be able to figure out which is easier. And, while I shouldn't need to ask, but, how much longer do you think the first process takes than the second from the time a decision is made?

If you want to follow the doings of a new startup taking advantage of just this difference, follow Mike on Twitter. He's starting a new company and taking full advantage of open source and clouds to have some incredible infrastructure and development cost metrics - actually showing through his own experience what can be achieved.

Want to hear more? Remember, I'm speaking at the NY Cloud Computing Expo later this month.

* "Ray" Wang has been tweeting and blogging about this topic quite a bit. I find it very interesting to follow.

Comments

[David Bressler]

Miko - interesting point. But, on the same note, I know a few startups where that's literally what they do. Pull out their personal credit card, get a subscription to salesforce and after a night of twiddling with reports they've got a CRM.

I can understand issues of where the data is hosted for larger companies, but... for a startup, they never really worry about that anyways.

I'd hate to have been that guy on the trip to Israel. Largest bill I ever heard about was $5000; and I was stunned the person who did that was so oblivious to the costs of what they were doing. There's a long way to go on lowering the cost of international business and the mobile roaming that makes it transparent to working in your home country.

David

[Miko Matsumura]

yes, this makes cloud "procurement" very viral...

This is going to be like the departmental web servers that get smuggled in secrecy from central IT.

Getting over the Enterprise Software procurement mode and onto the credit card is a major barrier.

The interesting issue will be what will happen the first time a programmer gets caught in an "infinite loop" and ends up with 60,000 CPUs charged to their VISA card. I heard a story about a guy who's wireless roaming charges for a short trip to Israel went up to $22,000. Talk about a big ISP bill to expense!