Speeding up the innovation cycle with SaaS

Profile picture for user smiranda By Steve Miranda February 22, 2015
Summary:
The old way of doing things, by which companies had to wait years for an IT project to be finalized, is no longer sustainable, says Steve Miranda, Executive Vice President of Applications Development at Oracle.

Steve Miranda
Steve Miranda

The cloud is boldly redefining the IT industry, because the cloud truly is a better way to deliver software than the traditional on-premises model. While IT was initially suspicious of cloud’s power, IT leaders have come to view the cloud as a friend, and as a highly robust and effective way to deliver software solutions to business users.

So, why exactly has IT embraced cloud?

Before the cloud, release cycles for new business applications were generally one to two years long. That meant that companies in need of new functionality had to wait at least a year for updates to reach the wider market.Under these conditions, the dynamic between a software vendor and an early adopter of its on-premises software looked something like this:

  • Early adopter has initial conversations with vendor about IT requirements.
  • Vendor develops version one software.
  • Early adopter implements software.
  • Early adopter inevitably customizes software, with the help of vendor and IT department.
  • Early adopter tests and fine-tunes the software, followed by further testing and customization.
  • Early adopter finally achieves desired functionality.

How long did that take?

That familiar cycle could take two years; maybe more. And quite possibly, the original problem the company wanted to address had evolved and the software would need further refinement.

Another characteristic of the on-premises innovation cycle was that vendors needed to dedicate a great deal of time and effort to product management “by inference,” essentially speaking with customers directly to determine what their needs were before applying their learnings and beginning to develop a solution.

The same held true when it came to making changes to an existing application. Insights were based entirely on feedback from a clients’ IT department once the solution had been tested and assessed in the field—sort of an advanced trial-and-error process.

Today, the advent of the cloud-based model has allowed software developers and vendors to better tailor their applications to customers’ needs and, in general, make them better and faster.

In particular, the Software-as-a-Service (SaaS) model has enabled vendors to evolve beyond a relatively inefficient product management “by inference” approach and towards a much more rapid cycle of innovation based on a real-time view into customers’ application use afforded by new usage tracking mechanisms.

Cloud companies today are delivering new application releases every three to four months, and what’s more they are doing so with the confidence that their customers will fully benefit from their offerings.

Change-enabled

Two major changes in particular have made this possible.

Firstly, the cloud allows vendors to seamlessly execute software upgrades on behalf of their customers. Vendors have moved customizations directly into today’s cloud configurations so customers aren’t required to take on this often complex process themselves.

Secondly, but no less important, vendors that have their cloud solutions rolled out across hundreds or thousands of businesses can directly see in real time how their customers are using the various features of their applications.

They have a clear view of how businesses use the system, which features they employ most often, and which are least relevant, as well as how long it takes companies to complete tasks in the cloud.

This visibility does not extend to private data around companies’ invoices, internal customer and supplier portfolios, or employee salaries. It is all about usage of individual features, time spent on transaction execution, and configurations. This process allows vendors to better “prune” their applications to make them better and more relevant to end users.

As a result, the second turn of the handle (so to speak) is much more precise than it once was as it is based less on inference and more on actual data relating to customers’ application use.

With the upgrade process so much smoother and the IT vendors having access to much more precise and cohesive feedback on how their solutions are performing, the innovation cycle has been shortened from a few years to a few months.

Customers using the cloud will see their business problems addressed more quickly and more efficiently, and can rest assured that they will have the latest upgrades available for their critical software.

In essence, the cloud has made it possible for vendors and software providers to deliver a better product to customers faster and at a lower price. The old way of doing things, by which companies had to wait years for an IT project to be finalized, is no longer sustainable.

The pace at which markets shift today has put pressure on organizations to develop equally dynamic and responsive business processes. While on-premises IT will always have a place in the enterprise, it’s clear the cloud has become the means to that end.