There’s little room for error if your company decides to make the transition from a provider of on-premise solutions to a service provider via cloud computing. If you don’t take the time to develop reliable services that match the reliability of your on-premise offerings, your credibility will suffer — and customers will lose faith in your ability to deliver on your service promises.
However, done methodically and carefully, cloud computing allows you to bring products and services to market faster, using a delivery method that customers will increasingly demand. (They have their own reasons for preferring the Software as a Service model — among them, faster implementation times and easy, cost-effective upgrades.) In the traditional packaged software model, you typically reach time to value in six months to one year; in the cloud computing model, time to value is reached in as little as one to six months.
Cloud computing can be likened to creating the efficiencies that benefit utility companies. It’s more cost-effective to run one big power generator (the cloud) instead of trying to manage a lot of smaller power generators (on-premise implementations). With cloud computing, your company becomes the “generator,” and both you and your customers reap the rewards.
Sounds like a win-win situation — but creating this dramatic transformation isn’t easy. Operating your company using a cloud computing model is vastly different from the traditional ISV (independent software vendor) model — the same rules of product marketing and development simply don’t apply. Avoid the common mistakes made by software vendors when they make this shift, and prepare to engage in some serious strategic planning before you dive into cloud computing:
- Talk to your peers: Seek out your colleagues at companies that successfully transitioned to cloud computing — and those that failed. Both groups can offer sound advice on the smart steps to take, architectural choices to make, and the pitfalls to avoid.
- Don’t do too much, too fast: Many companies try to shift every facet of product and service development to the cloud computing model — which is too much disruption in a short time period. In my experience, 70 percent to 80 percent of companies that try to make this transition too quickly, and throw out the infrastructure that they have built, will fail.
- Focus on your core IP: As you make the transition to cloud computing, remember to catalog and retain your core intellectual property. Instead of trying to rush to market with cloud computing, a far better and safer approach is to focus initially on your core intellectual property and build your first solution around that. Plan on a measured, step-by-approach to this transition, with intermediate milestones, and control each variable at a time.
- Manage expectations: When you proceed with a transition to cloud computing, your various stakeholders — customers, partners and employees — may ask why you haven’t included all of the bells and whistles in your initial service launches. It will fall to you as the technology manager to explain the future end-state of your offering, and how you will make incremental process towards that end-state.
- Don’t be thrown by design changes: The design principles that you use as an on-premise software vendor usually don’t translate to cloud computing. For instance, the configurability or ease of use of your products will be much different when you begin to deliver SaaS solutions.
- Raise the bar for ease of use: This is related to the point above. As you adapt your products and services to cloud computing, you need to account for higher expectations from customers for ease of use and time to value. With the standard implementations of on-premise solutions, there is much more time built in for training and configuration of the product. But customers expect SaaS solutions to be easy to operate right out of the gate, and they expect the user interface to be highly intuitive.
- Don’t abandon your install-base customers: Remember, it’s your install-base customers that are paying the bills. You need to continue to deliver incremental value to them as you are making this transition. Explore ways to increase your development capacity while still fitting into your current cost envelope. And finally, provide customers the choice to use your offerings via either delivery model.
- Change the team structure: Your organization structure and software development lifecycle will likely not work well with the new delivery model. Transition your teams to become smaller and cross-functional in nature. Agile teams should draw on information throughout your corporation’s knowledge base if you want your service to fully represent your expertise.
- Prepare for change — everywhere: Shifting to cloud computing is a disruptive experience for all parts of the company — not just IT. Moving from a year-long product cycle to a six-month (or even shorter) cycle has a huge impact on marketing, sales, accounting — you name it.
- Evangelize: With so much change happening, you’ll have to constantly sell the benefits of this transformation. Become the evangelist, not just for the service or product you are offering, but for the entire cloud project.
When you embark on a cloud computing effort, the first round of customers will come to you with high expectations. When you respond effectively to their trust in your service offerings, rest assured that these early adopters will spread the word that you can deliver reliable, secure and powerful SaaS solutions.
Michael Graves is chief technology officer and senior vice president of engineering for Callidus Software, a provider of sales performance management (SPM) software.