Adobe and SAP head towards the cloud
Not unexpected but with the idea of the subscription model to even out income at Adobe, and the success of other cloud ERP providers SAP had to do this, expect more large companies to watch this roll out and see what happens.
I have not gotten into Adobe Creative Cloud yet, I am more of a Lightroom user than I am an Adobe Creative Suite user (although I have been known to use Photoshop badly in the past). I have been on more SAP rollouts at companies than I care to mention, none of them have gone well. So it is with a lot of interest that I am seeing these two large mega corps rolling into the cloud and in the case of SAP potentially betting the business on the decision.
I think we will see more of this in the future. The subscription model is lucrative, and in the case of SAP, their software is complex, and beyond the knowledge of many people to simply use. Going to a module based cloud deployment where SAP takes consulting fees to customize makes a ton of sense both from the user/implementer frustration level all the way through to also having a stable revenue model, and maybe better success for companies on roll out.
Here is where this makes sense.
Suddenly you don’t have to worry about the users computers any more, just their browser. One of the frustrations with installing any kind of box software are the dependencies, sometimes you can’t load an application on your crappy infrastructure, server or PC without a major upgrade. That adds to the costs of deploying both of these software packages. The cloud makes perfect sense, rolling out an updated browser is much easier than rolling out a new PC to a user, or having to upgrade servers in the data center. Both of these applications are intensive when it comes to consuming resources, it will be easier and in many ways more cost effective to let someone else worry about that problem.
Security becomes “someone else’s problem” and with all the hacking going on, you no longer have to worry about protecting your data center for those apps or that data, that becomes someone else’s problem. It does not go away, but it is an awesome combination of risk avoidance and risk transference. If SAP gets hacked and your data goes away, if you wrote the contract right it is SAP on the hook for the data breach. If your IP gets stolen when you are designing it, then it is Adobe’s problem. You simply have to worry about the eventual lawsuit, and due diligence. Many security managers in smaller companies will dive in on this one because it is very difficult and very expensive to find really good security people.
Less administration equates to being able to cut staff, cutting staff is always a good way to cut costs, no manager will argue with that one.
It makes sense for Adobe and SAP in that they control the operating environment, meaning they can use their own in-house experts, and value added consulting to help sell not just the software but the services and the training to go along with it. An integrated package from the vendor can also save a company money. It might also in the case of SAP increase the success rate of ERP rollouts. Making happier customers, happier users, and a happier profitable bottom line.
This also removes the tumult of big shrink wrapped box sales opening the door to smaller companies to use both services.
If I need something, I can simply go get it for a smaller amount of money with a lot less administrative overhead. Rather than paying anywhere from 300 dollars to 2500 dollars for Adobe Creative Suite, I rent it for 39.99 to 69.99 a month per user or per team. If I am an occasional user and only need it for a short period of time, then 39.99 sounds a lot better than 300 or even 2500 dollars. This opens the door to making the product defacto, or the one that people go to first because instant gratification for a small amount of money works.
As companies get moving into the cloud, and users have had ample opportunity to get used to Google Docs or even Office 365 from Microsoft, adding Adobe will be an easy process for customers and users. SAP on the other hand will probably end up more like Sales Force dot Com. The real issue with SAP will be integration with legacy systems dotting the corporate landscape, but if I have access to SAP consultants from SAP who know their software, maybe my roll out will go a whole lot easier.
I wonder who will follow.
(Cross-posted @ Hacking Cloud Computing)