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A few months ago, I wrote about the future disruptors to enterprise content management (ECM), and while the cloud played prominently, my predictions primarily focused on infrastructure as a service (IaaS)—particularly Amazon Web Services and Microsoft Azure—versus the role of software as a service (SaaS). Afterwards, I received a couple of calls and emails from readers who were convinced that SaaS will play a larger role than IaaS in the future.
Why Does SaaS Get So Much Focus?
SaaS presents a great deal of simplicity and value to business users. Think about it this way: SaaS is for systems what the power grid is for electricity. Users don’t need to know where the computing resources come from; they just can tap into the power grid and pay for the amount of resources they consume.A big disruptor to SaaS was Salesforce. With simply a credit card, a business user could sign up for their service and begin to use a new customer relationship management (CRM) tool right away—with little to no information technology (IT) involvement. Following the success of Salesforce, lots of file sharing tools emerged with a similar SaaS model, where clients could manage and collaborate on files right away. Obvious examples are Dropbox, Google Drive, and Box. Grouped by Gartner as file synch and share services, the question is, "Are these tools really ECM or just the next generation of collaboration tools?"
In another post, I wrote about on-premise competition and how any SaaS vendor would have difficulty replacing existing on-premise solutions due to a number of reasons:
- Certain industries (insurance, for example), have requirements, personally identifiable information (PII) concerns, or other regulations (e.g., documents can’t leave the state) that require on-premise solutions. I would agree that most companies are moving away from those requirements, but on-premise solutions will still exist. Cloud-only solutions can never take the market share (or revenue) from ECM vendors with clients that continue to support their own data centers.
- By maintaining their own infrastructure, SaaS solutions cannot offer (and compete with) Amazon, Azure, or other cloud-based alternatives to on-premise. Clients that have committed to Amazon for other infrastructure will look to extend that infrastructure with ECM, which can run in their private Amazon cloud.
- While some SaaS vendors, like Box, will be able to offer more private clouds, their DNA is all about leveraging from a multitenancy approach in both hosting and software.
IaaS: The True Cloud Disruptor of ECM
IaaS represents a bridge between business and IT, where both realize substantial advantages from the cloud without the all-or-nothing approach of SaaS. Business users get the reduced pricing and some of the capabilities of the cloud, while IT users get the reduction of data centers along with flexible and scalable infrastructure on demand.To really understand the momentum of IaaS, all you have to do is look at the revenues of Amazon Web Services in 2016—which was $12.6 billion with three billion dollars in profit. ECM vendors that can catch the wave of IaaS (rather than try to compete against it) are well-positioned to succeed.
Dave Giordano is the Founder and President of Technology Services Group (TSG), a Chicago technology consulting firm with 40+ enterprise content management (ECM) consultants. Previous to founding TSG in 1996, Dave worked for nine years for Accenture (Andersen Consulting). Follow the TSG Blog or follow them on Twitter @tsgrp.
