Can Traditional Vendors Be Trusted With SaaS?

I think this a radical but close enough to reality. SaaS, Cloud computing and On-demand applications require a different skill set than On-premise applications.
You could read more in my post

Noam Tamarkin

This is at the heart of my recent post on SaaS Vendors - Not All Created Equal. http://tinyurl.com/yz6qeng

Because of the hype you have many on-premise vendors "reinventing" themselves as SaaS vendors. It's not as easy as simply taking an on-prem app and hosting it. It's a different business model, delivery model that impacts how software is built, tested, deployed and upgraded. It's not just about software - it also involves networking, security, availability. It also impacts the company organizationally. As Noam said - it requires a different skill set.

Becoming a SaaS vendor is much more that moving your application stack on to either a private or public cloud. Becoming a true SaaS vendors puts as much, or more emphasis on the delivery of the service, it’s security, and the vendors ability to just not maintain and continuously improve those service levels.

Service Level Agreements (SLA’s) are the life blood of a successful SaaS vendor and represent intellectual propriety that has been developed over years of supporting production customers. In many cases the opperational capabilities defines have in themselves become the barriers to competition. This is more than just a technical difference between SaaS and on premise vendors, it represents a cultural distinction that is defined from the CEO down through every employee in the organization.

Being successful in SaaS requires a relentless dedication to service which traditional vendors lack. It will take them years to change their 'DNA' and become truly services-driven rather than product-centric. This not only requires a cultural transformation, but also a restructuring of their operating models. These changes require a significant investment of time, resources and money. Making a sufficient monetary investment is prohibitive because service revenues are recognized as they are incurred rather than upfront like product revenues.

I think that one should consider such incidents in perspective. Take the airline industry – flying is statistically much safer than other transportation such as automobiles, yet a flight accident gets worldwide attention while most car accidents go unnoticed (except for the victims). The same goes for hosting and Cloud operations, in many aspects – security, outages, performance – to take a few. The typical company’s data centre is significantly less secure and frequently poorly monitored, to a point that users often are not even aware they were hacked. So I would not lose sleep worrying about outages at IBM – much more likely about outages of my own data centre.

I think that lots of vendors are realizing that they don't have the training, the culture, or the resources to provide Software truly as a "Service." They've been irregular "publishers" and now they need to be continuous "IT departments." My company, Lionbridge, is a big onshore/offshore outsourcing company...and what we're seeing is that SaaS is accelerating the move to outsourcing. You need the kind of 24/7 resources that BPO and offshore dev companies have traditionally provided--but more, you need that "nonstop service" attitude. You have to really "get" maintenance and get excited about it. We're planning to start a blog about maintenance at www.lionbridge.com/saas.