What is Happening?  This week, Saugatuck research executives found themselves participating in three, simultaneous industry events shaping the world of Cloud IT and business. CEO Bill McNee and SVP Bruce Guptill sat down with key executives (including C-level meetings) at SAP Sapphire in Orlando; VP Mike West met with company leaders and users at ServiceNow’s Knowledge12 conference in New Orleans; and VP Charlie Burns took part in IBM’s invitation-only Cloud Innovation Forum in Chicago. It’s been a Cloudy week for Saugatuck, in other words.

The net takeaway from all three events, including dozens of discussions with provider and customer leaders, is that the religious wars and mystery about what Cloud is all about is clearly gone. The critical questions for providers and user enterprises have shifted from “What is it” and “Why should we?” to “When should we?” to “How do we?”

Given that the majority of Saugatuck clients today utilize multiple (usually dozens or more) Cloud-based IT and business services, how many have dusted off the SLAs related to those? What we’re finding out from our ongoing SaaS and Cloud IT research programs is that most have not given enough time and thought to viewing and understanding their Cloud IT SLAs. And too many, it seems, have not even negotiated the terms of those SLAs with their providers. That’s bad business for enterprise user/buyer and provider both.

This week, we’re reviewing and updating our original guidance regarding SaaS/Cloud SLA provisions and negotiation, and we strongly recommend that our client do the same. We’ve updated our core Strategic Perspective on the subject, which is being published this week for clients of our CRS subscription service. Here are the five points that every IT and business executive needs to understand and negotiate when it comes to any Cloud service level agreement:

A new Strategic Perspective from Saugatuck Technology uses our latest data and analysis to show how, and why, buyer/user expectations of benefits from SaaS/Cloud have changed dramatically since 2010. The net of it is as follows:

• What is expected of every solution and provider is a combination of cost reduction and speed to implementation. If a provider can’t demonstrate those two things in any situation, they can’t get a seat at the table.
• Meanwhile, almost all expectations of business improvement from SaaS/Cloud are also rising quickly, implying that buyers are not only much more comfortable with SaaS/Cloud than ever before, they are buying and using it in more areas – and therefore are more susceptible to disappointment when their expectations are not met.

The impact for providers is a need for new and different types of partnerships, from solution architecture and engineering that enable more agile and adaptive development and delivery, to micro-niche developers and providers able to deliver complementary capabilities not thought of when most solutions were engineered. Customers may not swap out SaaS/Cloud offerings that don’t grow to meet their expectations, but they will turn to other, complementary providers if the original provider can’t step up.

What is Happening?  Saugatuck’s ongoing research with IT and business leaders regarding their business, Cloud, social and other IT-related plans and actions reveals that, while core business priorities remain very similar from the smallest firms to the largest mega-enterprises, significant differences exist based in part on the relative size of firms. These differences shape what, why, how and when firms acquire and use IT of all types and forms, whether suite-based, Cloud-based, traditional, or hybridized.

Our latest global survey research provides us with very useful data regarding how firms of varying size differ in their business goals. The key differences are illustrated in Figure 1, and analyzed in detail in research published this week for Saugatuck CRS clients (1057MKT, Varying Value Needs: SaaS and Business Priorities from SMBs to Mega-Enterprises in 2012, published 25April2012).

What is Happening?  Acquisition of SaaS and other Cloud-based IT and business services has always differed across the globe, due to factors such as relative market maturity, average business size, and state of the economy. We first pointed this out in 570RA A Slice of SaaS: Worldwide Channel Preferences Show Mainstream Trends 04Mar2009.

Since that time, the differences have become more pronounced, with initial preference shifting rapidly over the past few years to more broad types/groups of sources.

Saugatuck clients concerned with their abilities to see and manage the increasingly-rapid pace of technology, business, and market change should read our latest Strategic Perspective on the phenomenon known as “Cloud speed” (link here).

At its heart, “Cloud speed” is an expression of, and an effect of, the accelerating pace of continuous innovation in IT and business that enables and is enabled by Cloud IT and Cloud business.

What is Happening?  Saugatuck’s just-completed 2012 global survey of SaaS/Cloud business solution adoption and use shows several patterns that indicate how the acquisition, use, and management of SaaS (and other Cloud-based IT services) is changing, based on changed enterprise business goals and priorities.

The research data analysis report from this survey that identifies the key trends shaping – and re-shaping – software acquisition, use, provision and markets, along with IT and business roles, is being published and distributed today to clients of Saugatuck’s Continuous Research Services (CRS) subscription research and inquiry program. Additional in-depth analysis will be provided to Saugatuck CRS clients through a series of Strategic Research Reports and Strategic Perspectives. An abridged version of this report is available for downloading to all registered members of Saugatuck’s website (including recipients of our weekly Research Alerts) by clicking here (complimentary – but registration required).

The term and concept of “Collaborative Commerce,” though critically important to enterprises’ increasing focus on improving business operations and profitability, is in danger of becoming a marketing meme rather than a manageable set of solutions and operations. A new Strategic Perspective for Saugatuck CRS clients tackles this by presenting a model and description of how Collaborative Commerce needs to be modeled on commercial interactions between and within enterprises, rather than focused on one or a few sets of inter-enterprise transactional communications.

Bu just naming the thing does not control it, or make it tame. To work, Collaborative Commerce must be more than a recognizable solution or service; it must be enabled and empowered by organizational, hierarchical change. Buying and using the software or service is merely a beginning that will spotlight and highlight just how complex commercial interactions are – and where the opportunities are for enterprises (and Collaborative Commerce providers) to improve their management.

What is Happening?  Saugatuck’s latest global survey of executives and managers (see Note 1) shows very clearly that enterprises worldwide are still working their way through recovery mode, emphasizing improvement in operations, market presence, and customer influence over expansion into new markets. In short, firms of all types and sizes, in all markets, are focused first and foremost on doing things better and improving their profitability in existing markets and relationships.

Our analysis of February 2012 survey data from 228 participants in North America, Europe, and the Asia/Pacific region shows business and IT leaders focusing on business goals that emphasize revenue growth from their existing business footprint, combined with improving profitability. Figure 1 uses Saugatuck research data from 2006 through 2012 to illustrate how business priorities have shifted toward improving management to improve margins and market share, and away from new customers and new markets.

As part of Saugatuck’s ongoing and growing work in the role(s) of data integration and Cloud (1024RA, Cloud-based Data Integration Changes Business for Enterprises and Providers, 16Feb2012), I had the good fortune to participate this week in Informatica’s annual analyst briefings in Silicon Valley. After two packed days of give and take on Informatica’s vision, strategy, tactics, plans and offerings, it’s fair to say that the company understands where it sits, where their real opportunities are, what their business goals should be, and how to approach and achieve those goals.

Granted, that sounds rather “business as usual.” But that’s what makes Informatica rather unique in a market environment rife with hype about Big Data, Cloud, mobility, social IT, and so on. There’s a company strategy roadmap that was really developed years ago, and which has been tweaked around the edges a few times, but which has remained largely intact and carefully followed as the markets have changed and evolved around it. Informatica does not ignore those market changes, but continually seeks and works to redefine how the market perceives it and its offerings within the latest paradigms. It does not ignore important changes and trends, nor does it pander to them. At its own bottom line, Informatica resolutely remains the same: Focused on data integration.