As SaaS models continue to become the norm in the consumer space, I believe there is still a lot of opportunities within the enterprise space. There are the exceptionally successful SaaS providers in the enterprise space – such as SalesForce or Workday – but the balance is still largely in favour of traditional, on-premise application implementations. The advantages to moving to SaaS are significant but so are the perceived risks in moving data, or a business critical application, to the cloud. Software vendors who can create compelling app’s that provides the security enterprise clients want, along with a pain-free migration strategy will be the biggest winners over the next 3-5 years.

Traditionally, enterprise clients have attempted to maintain control on their IT systems by buying their own hardware, buying their own and putting in on that HW and finally, using their own employee’s to support the whole thing. It didn’t take too long for some of those enterprises to realize managing such IT infrastructure was not easy and not really their thing – so commenced the “outsourcing” trend. By outsourcing the management of the environment, an enterprise could focus on its main business and just pay someone else to deal with that stuff. Service Level Agreements (SLA’s) were a means of measuring the performance of the IT vendor and if they didn’t perform, they were hit with a financial penalty. In my opinion, what enterprises perhaps didn’t factor in was the sheer sprawl of environments over the last 10-15 years. Combine that with the rapid pace of development in the hardware space and the emergence of the “bring your own device” (BYOD), suddenly outsourcing is not necessarily the right answer. Instead, the focus has/should become acquiring what you need and only as much of it as you need. The lucrative era of ever growing server counts, expanding dedicated data centre’s and a small army of support personnel is coming to an end for the IT outsourcers.

Instead, nimble software vendors are removing that reliance on traditional infrastructure by offering consumption based solutions provisioned from the cloud. Consider this – every enterprise client of Salesforce is essentially ditching their old CRM solution (likely Oracle or Siebel) which not only affects the revenue of those software vendors but also reduces the environment size the end client needs to maintain (considering that Salesforce is SaaS based). The same applies in the ERP space – PeopleSoft/Oracle and SAP are on the way out, Workday is on the way in! Many, many servers, their space in the datacenter and support resources that were once needed are no longer required.

At the very least, all of this simplifies life for enterprises. From a financial perspective, the CAPEX once required to procure the necessary HW and SW goes away and all of this becomes OPEX. If the consumption is managed properly, the TCO should directly align to the usage so in theory, some savings could be recognized. In short, CFO’s like this new wave of SaaS solutions. Users typically prefer this model too – aside from the potentially device-independent access (depending on permissions), users tend to get faster access to new features and functionality. The era of enterprise employees being stuck on old software is coming to an end – thankfully!

However, that ‘end’ may not be all that close – there are a number of concerns that are preventing the mass migration to a purely SaaS operating model. For starters, is the “cloud” secure enough for enterprise data? Some think not – but then how do we explain the success of CRM and ERP SaaS solutions such as those above. In my opinion, the naysayers will eventually be persuaded – particularly as cloud security improves. Similarly, Virtual Private Cloud solutions can provide an enhanced level of security for enterprises while still providing the infrastructure a SaaS offering needs. To get a better understanding of some of the security issues the typical CSO or reluctant CTO is likely to reference, review the “Notorious Nine” report compiled by the CSA. On that note, I also think the advent of organizations like CSA will help to accelerate the cloud computing model in general within the enterprise.

As the volume of compelling, enterprise ready SaaS solutions increases, it will be harder to resist making the leap to the cloud. However, being the ‘sherpa’ to the enterprise as they make that journey is a potentially lucrative opportunity. While software companies – new and old – may be able to make those compelling, enterprise ready SaaS solutions, not all of them – not even the majority of them – will be able to help enterprises effectively migrate legacy data. I’m sure they will enable the import of the data, but the technical support needed is something that will be beyond the majority of them. Therefore, if you can find the next Workday or Salesforce and develop the methodology and tools needed to move the old stuff to their new products, you may just be a big benefactor in the migration to the cloud. Obviously, this is easier said than done but its a win, win and win scenario – the software vendor gets an enterprise client, the enterprise client migrates faster but with access to their legacy data and you – if you are the new ‘sherpa’ – get some revenue!

In summary, the move to SaaS is well under way in the consumer space; it’s gathering momentum in the enterprise. As CFO’s get behind the idea, combined with CTO’s and CIO’s, those who argue the model lacks the security or maturity the enterprise needs will fall away. The primary adoption challenge will then become the migration and in my opinion, that is an area for some clever folks to exploit. The new wave of SaaS vendors don’t have the capabilities to address this body of work entirely and access to that legacy data is not something that enterprises will let go. Those cloud ‘sherpa’s’ who can find the next big SaaS offering will have an offering that the clever vendor and the smart enterprise will both want to employ as the inevitable evolution of enterprise computing continues.