Organisations, especially SMEs, are being encouraged to move to the cloud to drive down costs and cut internal IT heads. But will this really work? As vendors look to pack ever more complex features into product sets, is the cloud really the best way to access this technology?
Critically, do organisations ever really need such functionality? Since 90% of the features in most software applications such as CRM remains unused, there is a strong argument for providing a radically cut down alternative – at a drastically reduced price. Or even for free.
The cloud represents a chance to not only transform the way software is delivered but, more critically, the opportunity to radically change the type of product on offer.
New Model, Same Software
The shift towards cloud computing continues to gain momentum. Vendors are embracing the lower cost of delivery and reduced support requirements; whilst organisations of every size and market focus are grabbing the chance to reduce internal IT skills and move from a capital expenditure to operational expenditure model.
But is cloud computing really just an opportunity to deliver the same software in a cheaper way? The vast majority of software applications being delivered via the cloud are nearly identical to the vendor’s on-premise solutions. Indeed, even those which were designed specifically for the cloud are still highly complex software packages, full of intricate functionality that demands significant user understanding and commitment.
The result is that while there is a small cost saving over the on-premise systems, these applications are still inherently far too complex; they require significant support and extensive end user training.
Any business that was deterred from investing in traditional on-premise CRM systems, for example, due to complexity, is still not going to make the move just because the delivery model is cheaper. Instead, these organisations – which represent the vast majority of SMEs in the UK – will continue to track sales via spreadsheets.
So just what is being gained from the move to the cloud?
Simplicity Equals Productivity
The cloud offers a fantastic, fast, low cost software delivery mechanism. Yet by attempting to deliver existing on-premise solutions via the cloud, IT vendors are missing the point: they are creating a huge support overhead and reinforcing the problems associated with user dislike of over complex systems.
In contrast, following the cloud model to its logical conclusion, vendors must strip out the unnecessary and unused features in the software. With a simple, intuitive application, there is no need for an organisation to invest in user training, pay for support or accommodate the complexity of these larger systems. The overall cost to use reduces significantly, whilst productivity and user acceptance increases.
And this is key: simplicity has a huge value to businesses. It ensures people understand and use applications more effectively. Simple applications are also far more robust, cause fewer problems and demand minimal support.
There is, of course, a trade off between simplicity and functionality. An organisation has to decide: opt for a less functional product that is easy to use and will gain universal adoption across the organisation; or insist on a more expensive solution that ticks every single feature box and accept the fact that at best 20% of users will get to grips with the system.
For any SME that has been deterred by the over complexity of traditional on premise CRM or ERP systems, the opportunity to invest in simple yet functional systems is compelling.
As the cloud model gains momentum, vendors need to think again. The SME software market is becoming commoditised: the emphasis is on low cost, even ‘freemium’, systems delivered via the cloud. These systems are essentially simple, ensuring users can be up and running within ten minutes, with no training and require minimal support.
In this marketplace, persisting in adding new, increasingly arcane features year on year is delivering no incremental value. The core software is inherently functional; it works effectively; it meets the vast majority of needs. Adding functionality and complexity makes the solution less, not more, valuable to the majority of businesses.
So while analysts may get heated about the ease with which a CRM system can integrate with LinkedIn, back in the real world, those running SMEs just want a system that makes it incredibly simple to load their data from a spreadsheet.
Critically, the cloud makes this new model viable. Vendors can provide a simple, yet effective, commodity application that meets the vast majority of business needs at a fraction of the cost of traditional on-premise solutions.
Cloud software is becoming a commodity offering. Prices will shift ever lower. And there is huge pent-up demand across an SME marketplace that has failed to successfully adopt a raft of applications, from ERP to CRM.
The essence of cloud computing is not just a low cost delivery model but the chance to develop and deliver a simple to install, simple to implement solution that is easy to use and requires minimal support. So will this drive some much needed pragmatism into the software industry, with vendors focussing on what people need and ease of use, rather than marketing-driven new features?