Since I'm both a proponent for the cloud-based model and work for a leading SaaS company, I'm inclined to say yes. But Forrester released a new report indicating that at least for the Records Management industry, the SaaS model has not been the raving success that it's been for CRM, marketing automation and security. The big eye-catching statistic - 90% of respondents in a survey of 400 records management decision makers indicated that they were not planning to expand or implement new SaaS deployments. Reasons for the lack of uptake - unfamiliarity with SaaS was cited as a primary reason. There were also other concerns related to security, privacy and legal requirements.
I found this interesting because it dovetailed with a recent conversation I had with a friend, who has several years of experience as a CFO or comptroller. He expressed concerns about using SaaS for financial systems because of the perceived issue of "vendor lock-in" related to record keeping. His concern stemmed from tax audit requirements to keep financial info/records for 5-8 years. His point is simply that switching accounting systems from a SaaS vendor still meant keeping the former SaaS system "live" for a number of years - something that he didn't have to be concerned about with an on-premise system.
So are all applications suitable for the cloud? They can be but not all users are...and certain segments are currently less appropriate for SaaS because specific regulatory or audit requirements. That, combined with the lack of portability of data means that certain users may not wish to trade off data compliance control for cloud-based efficiencies.
There's also the issue of the competitive nature of a particular industry segment. My perception is that the records management sector doesn't value technology as a primary driver for competitive advantage. Hence the value to cloud-based applications is marginalized for the decision makers in that segment.
What do you think? Are all types of applications suitable for the cloud? Which ones other than the financial accounting and records management are possibly sub-optimal?
Maybe a better question to ask would be:
Is 'the cloud' suited for all business cases.
Records Management is a practice applicable to many/most businesses and industry sectors, however the regulations facing some of those sectors are rather stringent. Issues such as protection of PII, PHI, PFI and rules such as HIPAA, GLBA, SEC, FRCP all impact the manner in which certain personal and financial information is controlled and managed, and some of this information has extremely long retention periods.
It's incorrect to identify records management as an 'industry sector' and to characterize it as not valuing technology as a driver for competitive advantage. If you look at the current and projected expenditures on content management systems (CMS), records management applications (RMA) and e-mail management systems (EMS) you might see that technology is being deployed to serve RM needs much more than in many other areas in business .
The Forrester report is correct in its finding about SaaS and records management because of a few specific business needs. One is the protection of information from commingling and potential exposure to others, another is the wide range of retention periods based on content which can span 30 days to 75 or more years, and finally the risk of the untested and constantly changing nature of the environments.
There is a definition of 'the cloud', but like real clouds, it's vaporous and tends to change shapes and appearance as time goes along. There are risks associated with this that are greater than most organizations are willing to accept with their information assets. Who OWNS the cloud? Who else RESIDES in the cloud? Who MANAGES the cloud? How is the cloud DESIGNED for operation to support BC/COOP needs? What ASSURANCES do cloud users have the data is protected and what avenues of financial protection do they have?
Maybe some day when the cloud has been tested and proven to be near fail-safe organizations will support the concept of placing their records in the cloud, but presently they're following the old business adage of caveat emptor.
Larry - appreciate your reply. And thanks for the clarification on how to think about records management. I do think that wherever regulatory demands - HIPAA, GLBA, etc... - are required, users/decision makers are less likely to move to SaaS.
Looks like the first large public sector(LA Gov) EMS has moved to the Cloud:
http://www.npr.org/templates/story/story.php?storyId=114300948
Might be the barrier starting to break. No one wants to be first.
Fully agree Andre. Risk will drive the majority of the decisions in these cases.
One of the most interesting cases for me is all the talk around the Federal initiatives to move towards the cloud, which in many instances is completely contrary to the model for managing Federal information that meets the definition of a record set by NARA in 36CFR.
A prime example are medical records of anyone serving in the military, Federal employees, or Federal Contractors working in industries where there is the potential of exposure to any hazardous substances, materials, or 'at-risk' work environments. The medical and personnel records of those Federal employees must be retained PERMANENTLY; the records of the Contractors are required to be retained for 75 years beyond separation from employment, and are currently subject to a destruction moratorium imposed by the Government.
Given the ever changing nature of data formats, applications, media, obsolescence of both software and hardware, how would any SaaS provider be able to offer services to manage this information for the projected retention periods and provide services such as data migration and conversion to ensure persistent access over the life of the data? And what about quality control, validation and error checking following each conversion/migration?
I think the entire model of offering these services needs to be closely considered by BOTH sides of the table before entering into a contract.
Public sector leading the way? That'll be nice for a change.
Larry - thanks for that perspective on record keeping requirements in the public sector. Wow, 75 years...I think that's an extreme case of data retention that makes the tax audit concerns of my CFO friend seem trivial.