Analyst Insight: Cloud/SaaS computing has become a legitimate technology option for organizations, but a great of confusion remains in selecting this software.  Such factors as security, integration, business agility and total cost of ownership need to be carefully investigated because they will impact monthly costs.

-Dylan Persaud, managing director of Eval-Source

The security of cloud/SaaS solutions is an ongoing concern and remains very much misunderstood. In the cloud environment, factors that influence security are tenancy, delivery models, architecture, etc.  These aspects must be understood to properly assess the pros and cons of cloud computing.  Security standards are now in the mid-maturation phase with SaS 70 1&2 leading the way, but SaS 31, PCI, DSS should be investigated thoroughly when making a SaaS or cloud solution decision.  In addition, federal, industry-specific and vertical standards must be considered.

Integration is still a key issue when integrating a cloud solution into your IT/services mix.  Organizations are using the cloud for adding a new system or service, or to integrate existing systems with new services. By using the cloud as a platform to integrate disparate systems this approach provides key infrastructure that you do not have to build, which saves time and money and lowers overhead costs.  As with any technology purchase, implementation, data migration, training, change management and project management are potential obstacles. O due diligence is required must for a cloud integration to be successful.

Organizations are placing greater importance on the ability of a system to adapt to its rapidly changing business needs. In fact, business agility is such an important criterion that it weighs heavily in the decision making process. Selection is not just  about features and functions anymore. New complexities include: can your system accommodate changes to any business process, will the system allow growth, is vendor engagement necessary? Moreover, the ability to make "on the fly" changes to data structures, fields and workflows needs to be considered as part of the new buying process.

Total cost of ownership when selecting a cloud/SaaS solution has become increasingly difficult. There are additional factors that influence the monthly costs and overall TCO and ROI of the system.  A different type of analysis is required when comparing SaaS options and when considering on-premise implementation versus a cloud solution. Factors such as service-level agreements, up-time performance, redundancy planning, storage, archiving, network usage, transaction usage, vendor lock-in and vendor viability must be evaluated when selecting a cloud solution.

The Outlook

Security, integration, business agility and TCO will continue to play major roles when evaluating enterprise cloud/SaaS solutions.  Organizations that are considering cloud solutions need to be more diligent than with an on-premise system. Since there are many extraneous factors and various software options available, true TCO and ROI have become difficult to calculate.