Saas flexibility comes at a price, but the numbers don't add up

It’s been a few weeks since my last post. I’ve been busy attending conferences – Cloud Expo at Olympia and the Intellect Regent Annual Summit. Cloud computing is all the rage with the suppliers, but a survey from TechTarget, the parent company of Computer Weekly, shows that IT directors and senior IT decision makers are not buying the hype. It really is time for the industry to take a step back and try a little harder to appreciate the challenges IT departments are facing during these tough economic conditions.

The tough economic climate was the backdrop to the Intellect event in London last week. Antony Miller from analyst TechMarketView presented a compelling argument as to why the economics of cloud do not work. In most instances flexibility comes at a price, but the cloud providers want everyone to believe they can offer the ultimate flexibility, cheaper than on-premise software. He pointed out that most of the Saas companies are losing money, some have already been acquired by traditional suppliers. So maybe Saas providers will need to increase their prices to remain in business.

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