LizenUp Blog

Unpeel the cloud - Analysis on SaSS approach

The proliferation of SaSS, i.e. cloud-based service providers have changed the culture of IT and what it means to use software to run your business. Any small business (be it a technology startup or a brick and mortar operation) can now use the same software systems for managing their day to day operations like payroll, HR, sales, marketing, billing, expense reporting, all without investing in any type of infrastructure or even an IT department. Companies like ZenefitsSalesforceZohoStripeExpensifyFreshdesketc. make it so easy to get started and use a complex system like payroll systems and invoicing etc. without ever seeing a server or even hiring an IT professional. Every day there are new startups who are ‘disrupting’ the established operational software systems are popping up. All you have to do is follow producthunt.com. I recently saw a video of a new startup called Whistic (which won the best enterprise startup award in theLAUNCH festival) which automates the enterprise security audit process, with a cloud-based solutions. I didn’t even think it was such a big market, anyway, that’s on me! So, the bottom line is that for any type of enterprise IT process you can think of there’s a cloud-based software available, these are mostly startups, even some of the old guard like Oracle, IBM and CA are jumping into the fray by offering their traditional business system software as a cloud-based SaSS service.

 

So, the dream sold to any company who is starting up is that, “just focus on your core business, we will provide you with the X service and manage everything, we just need your credit card.” This promise is very alluring to people who don’t want to invest too much in IT while they are ramping up their business. Don’t get me wrong, I am delighted both as a startup that provides a cloud-based service (albeit not enterprise cloud services) and a small business owner to have this level of convenience and easy access to traditionally behemoth implementations. But, what we don’t see in the picture above is that every system has 2 parts: the system and the DATA.

 

First of all, each of the SaSS System is built in such a way that they make no differentiation between their software and the data, that makes it simple, sure, but that doesn’t give the full picture to the user. Secondly, the data is residing in the system, unlike traditional IT setups, where the data is residing in your own servers, even if those servers are hosted in a remote data center managed by a third-party, you fundamentally “own” the data. This creates several problems:

  1. Vendor lock-in: We used to talk about vendor lock-in a lot in IT, and fought to establish standards around data formats and services and SOA based architecture. But once the new-fangled cloud providers came along, we conveniently forgot that conversation, and adapting to not just a system lock-in, but also a data lock-in, I posit that this is much more dangerous. I am not saying that the cloud service providers are going to turn into ransomware one day, but we need to cautious about surrendering sensitive data and processes to a third-party whose relationship with you is only your credit card number. There was an article in Forbes in 2011 about this very problem, but I don’t think anything has changed in ensuing 5 years, in fact now we have more cloud vendors than ever before.
  2. Data formats: Signup with any payroll or account cloud service provider, they offer data import/export formats in QuickBooks or Excel etc. This doesn’t mean it’s a ‘standard’ across the systems. In fact, there are no standard data formats other than spread sheets that can work across companies. It would be a huge IT project to get all the data out of there and consolidate the data formats.
  3. Master Data Management: How a customer record is represented in a CRM system could be totally different from a help desk system, which creates huge problems as a company's needs grow, but if you have already been using those systems for a while. We are essentially creating data islands that are stored in various companies and none of them talk to each other, they may not be even aware of each other, let alone collaborate. Traditional Enterprise IT deploys MDM systems, data warehouses, ETL processes and BI to contend with this, but in a world of shadow or virtual IT, this practically doesn’t exist.
  4. Making sense of data: Any enterprise (big or small) needs reporting, dashboards, predictive analysis, just a general sense of the entire business at any given point of time. How can a small business (could be a tech startup as well) find time/money to consolidate data from various providers and run reports/analysis on them if they all exist in different environments? Companies like Appirio is taking the steps in a right direction, syncing various cloud service providers, but we need to see more companies do this.

So, how do we tackle this problem? First thing is to raise awareness of the pitfalls of using a cloud-based SaSs provider, for all their wonderfully easy onboarding process, there’s no ‘off boarding’ process that exist. We need also raise awareness of data ownership and data normalization/integrity. Secondly, we need to push for common data formats across similar systems, for example, I should be able to move my Zoho CRM to Salesforce CRM without having to jump thru hoops. These are only temporary measures but they will give us a starting point. What I really think should happen is, we need to separate our data cloud provider from our system cloud provider. So, when you sign up for a new email service provider, you should be able to point to your data cloud provider during signup, and you should have the freedom to change the email provider without having to surrender your data, or even go thru export/import issues. There are many data cloud vendors including Microsoft Azure, Amazon AWS, Digital Ocean, who provide bare metal servers, or even full-fledged RDBMS SQL or NoSQL databases. There are even specialized vendors like Compose (recently bought by IBM) who provide hosting services for your MongoDB or MySQL etc.

 
 

If each cloud service vendor access an external data provider and only provide their system, their multi-tenancy problems can be solved and data is firmly in the ‘control’ of the business. We can further extend this by using a common ETL/BI/Dashboard vendor who can then provide the data reporting/visualization services if required. Companies like PeriscopeModeTableau are providing such cloud-based visualization services without having to store data on their systems.

 

Let’s start demanding common data format and data ownership and the cloud vendors will come around, if they want to stay in business and competitive, everyone has to make their processes transparent and seamless. Now that the cloud is here to stay, let’s democratize cloud.