As we’ve been saying for a while, more and more businesses are moving their old installed systems into the cloud. So, what happens if you’re a software company and want to rebuild your own products as SaaS solutions?
There’s no “put all this in the cloud” button, but in this first of a two part article (part two here), we’ll look at planning what your rebuild might look like.
What's driving the move to the cloud?
Few of us like change and so we need good reasons for altering the status quo. Here are some of the drivers behind the shift we’re seeing from on-premises systems to the cloud:
- Staying competitive: the emergence of cloud and SaaS platforms has allowed startups to disrupt markets much quicker than ever before. Think, for example, of the traditional accounting space that has been shaken up by the presence of several new cloud-accounting tools that are rapidly gaining market share. Many end users now expect systems to work in the cloud, hence the move to the cloud will help to protect you from being outfought by the new players in the market. The direction of travel is obvious and trying to hold back the tide doesn’t seem a wise business decision.
- Reducing costs: in the long term, the cost of implementation is lower for the cloud than for on-premises solutions. In the old way of doing things, managing and supporting loads of different software versions on many old servers would lead to a high support overhead. Taking charge of the infrastructure gives you more control to manage your costs. At 345, we’ve taken this approach from the outset, which is why we don’t own any data centres or expensive hardware.
- Accelerating innovation: moving to the cloud puts you in control of the pace of innovation. Instead of waiting ages for your customers to update their systems, you can push out features at times that suit you. Say goodbye to unnecessary legacy support.
- Increasing insights: rather than data being siloed at customer sites, SaaS gives you a view of the entire data set. While there are security issues to be aware of in how you process this data, you can make statistical assessments that wouldn’t have been possible in the old way of doing things. That kind of business intelligence can be of great value. Dealing with big data and AI-powered analytics is one of our specialties, so let us know if you get more out of the data you’re collecting.
So, we can understand why this shift is taking place. But how do you take steps to make it happen for you?
How to plan for a major product change
There are two main considerations when planning a move from on-premises to the cloud:
- Managing your customers: just as businesses don’t really want to change (let’s face it), neither do your customers, and that includes your internal and external customers. If you want them to embrace a new way of doing things, you need to convince them that what they’re moving to is at least as good as what they’re used to already. Even if the benefits are clear, you might still need to incentivise them to take action. And when they do act, you need to be ready to support them.
- Managing the technology: with your whole customer data set now available to you in the cloud, you’ll have to think about the possibilities this presents. This means starting with the end in mind. What would you want to achieve and how can you plan for it now? There may be things you don’t know that you don’t know (it’s the idea of the “unknown unknowns” made famous by Donald Rumsfeld), and we can help you prepare for that.
With these in mind, you need to plan to implement your new system and then get your customers onto it on a sensible timescale. It’s unrealistic to expect everything and everyone to be ready to go on day one, but neither should you stand to witness a neverending migration.
The reality of planning a cloud-based approach often means that systems need to be rebuilt from scratch. That’s because moving from on-premises setups to the cloud can be akin to going from a propeller engine to a jet engine. Small, incremental design changes won’t get you from one to the other: in this case, it would require revolution not evolution.
But that’s not as scary as it sounds. A system that’s re-imagined to do what you need it to, that’s fit for working in the cloud, and that can better serve your end users while helping you stay competitive is surely worth the planning effort.
Designing for the future means working with the jet engines and leaving the propellers in the museum.
What are the costs of making a move to the cloud?
Making a move to the cloud can change the financial model of your business. Again, this could sound like a cause for concern but the reassuring news is that you’re not the first business to be doing this.
The businesses that were the vanguard for change were some of the giants such as Microsoft and Adobe. When they were promoting moves to subscription-based cloud services, there was a lot of unrest from users who were used to the traditional boxed software installation model.
But these days many users have accepted the new subscription approach for software. And this is where the finance bit comes in: adopting such an approach changes the way you can pay for your ongoing development and marketing, and it means less capital outlay in the process. Using SaaS also frees you from high ongoing server maintenance and staff costs.
Another financial benefit is that, because not all your systems are used all the time, you will get to learn the pattern of usage from your users. Some of your user population will be made of heavy users; others will be light users. Understanding this overall usage profile will make it easier for you to plan for scaling, and that will make for a more efficient system that benefits your entire customer base.
The flipside of all this is to decide not to make a move and to continue with the status quo. But consider some of the downsides of that:
- There’s high CAPEX involved in each product cycle for on-premises systems, plus significant ongoing costs.
- Fewer businesses are running their own data centres. If this becomes rare, the costs for persisting with this approach could and probably will go up.
- Industry disruptors whose products are in the cloud could “eat your lunch”, leaving you vulnerable.
- Most users now want or expect SaaS anyway, so you might be seen as out of touch even if your industry isn’t being disrupted right now.
Which products are easiest and hardest to move to the cloud?
We’ve found that systems that are based around using screens for data entry are the best candidates for a smooth move to the cloud. That can include activities such as submitting financial accounts, entering data into CRMs, recording timesheets or adding source code to programming systems. Everything like this ends up being relatively straightforward to replicate in the cloud.
The challenge comes when we have to deal with systems where there is a physical interface with hardware at one or more customer sites. Examples include Point of Sale barcode scanners and laboratory measuring equipment. Even doing what might appear simple tasks such as getting mobile apps to send data to printers can be tricky.
Even with such challenges, there’s still a strong case for modernising your systems and setting your business up for a successful future.
Moving from on-premises setups to the cloud could unlock great business value for you. Getting your planning and implementation right isn’t easy, but this is a domain we understand well, and we can help you take the right steps in your move to the cloud.