Forrester Sourcing Forum Dispatch: Transforming IT Sourcing in the Cloud (Part 1)

Liz Herbert, Principal Analyst at Forrester, delivered the opening keynote on Tuesday at her firm's Sourcing & Vendor Management Forum in Chicago. Her presentation was a basic yet useful primer on how IT sourcing must transform itself in the era of cloud computing. During the presentation, Liz threw out a couple of classic one-liners regarding our space, including "there are a lot of things being sold today as cloud which might not be" and also one cautioning against smaller SaaS vendors, "Aravo signed hundreds of thousands of seats with GE, but what happens to their revenue if GE goes away?" Now, this last knock on Aravo is not entirely fair in this case, given the vendor's eight-figure recent backing and a number of other unannounced large customers, but Liz's point is spot on as it applies to the general security of working with smaller providers. I personally faced a serious professional set-back a couple of years ago when a SaaS vendor we were working with did all but turn off the lights and stopped supporting its application.

Getting away from the one-liners, Liz offered up her belief that the cloud requires a range of unique buying considerations. For example, when evaluating cloud vendors, companies should consider overall size as well as "SaaS customers, growth, investors, R&D, and platform dependence." When it comes to architecture, not every cloud is alike either. Look at the support and breadth of different offerings, Liz recommends, including "Multi-tenancy, approach to customization, programming languages for development, integration tools, control of upgrade timing and data center/hosting related issues."

From an ecosystem perspective, Liz suggests that no cloud is an island and that "technology partners, implementation partners, ease of deploying add-on solutions, community ratings, developer community" and other factors all should matter in cloud selection criteria. Moreover, when it comes to security, it's important to factor into account areas such as "single sign on, disaster recovery, encryption, access rights, and physical security." And from a contracting perspective, it's essential to think through how best to trial and pilot capabilities and "business requirements, user interface design, and lightweight development."

Stay tuned for additional coverage on Liz' keynote, including other recommendations that are important to repeat here. But in the meantime, I encourage you to check out our own cloud recommendations in the procurement-specific software area in this multi-part post that I co-wrote with colleague Brian Umbenhauer from Deloitte: SaaS Vendor Selection/Implementation Tips: Avoid Having the Cloud Pulled Over Your Eyes. You can read it here, here, and here.

Jason Busch

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