July 5th, 2016 • BPM
When evaluating software, many customers get hung up on whether to choose something on-premise on in the cloud.
Cloud computing has been the next big evolution of the computing paradigm. It has opened up new possibilities in software but more importantly, it has changed the way software companies and their customers interact.
With on-premise software, everything you need to get started is found in a CD or a download. The software vendor develops it, packages it, sells it, and then largely walks away. The company is responsible for things like installation, configuration, storing data, ensuring that each system has enough space to run the software, buying any additional hardware, and arranging for backups.
Essentially, with on-premise software, after the sale is made, the vendor doesn’t have any accountability. The vendor may release updates or patches, but the customer is responsible for installing these on each system and scheduling downtime as needed. All responsibility for the functioning of the software is with the customer.
But cloud technology changes that entire paradigm. Now, once a sale is made, nearly all of the responsibility of maintenance of the software is with the vendor. The vendor takes care of performance, memory, storage, hosting, backups, and downtime. As soon as the vendor releases a new version of the product or a bug fix, it can be immediately implemented for all users.
With cloud technology, for the first time ever, vendors must be accountable for the software they develop for its entire lifecycle.
To take advantage of this new paradigm, customers must choose a cloud solution. If you choose an on-premise solution, you are accepting at least 10x more work in maintaining it. This means additional hours of managing the software from in-house professionals or expensive consultants. With a cloud solution, you not only have the convenience of being able to log into your software from any system in the world, you also can drastically reduce the amount of effort you have to put into maintaining the software.
The most common reason customers get nervous about a cloud solution is that now they are sharing their private data with a third party. However, companies do this all the time with other vendors. Nearly all companies have an NDA agreement in place with vendors who have access to their private data.
Customers should take the same precautions when working with cloud software vendors.
If you are investing a lot of money into the software, it is reasonable to ask for a paper contract with the vendor. The contract should include the regular NDA language and detailed information about what security the vendor offers. Read through the contract carefully to make sure that you’re sufficiently protected.
If you are a smaller company or making a smaller investment, some vendors may not want to enter into a paper contract. You will need to read through their Terms of Service document which should be easy to find on their website. Choose a vendor that includes versioning of this document so you know what changes over time.
Familiarize yourself with the latest security standards and make sure the vendor you choose is compliant. Serious cloud vendors will also have additional certifications like ISO or other industry standards. You may want to know where your data is located for litigation purposes. The software vendor should explicitly say in which region the data is stored.
If you ever disagree to something in the Terms of Service, or if you disagree to a change an existing vendor is making, you can always discontinue the relationship. The vendor should be bound to give you all of the data you have stored with them.
The cloud software paradigm opens up incredible opportunities for customers like never before. Cloud vendors are offering not just a download, but complete responsibility for the high performance of the product and the security of your data. Be smart and explicit about how you share your data, but do not let this become a roadblock in taking advantage of a new era of customer-vendor relationships in software.