Cloud computing has become the ultimate in self-service technologies for an increasingly tech-savvy crowd of business users, according to Rebecca Wettemann, the research chief at Nucleus Research.
The technology has also become increasingly easy for chief information officers to integrate with legacy on-premise IT systems, allowing them to redeploy their resources for more high-impact assignments. Wettemann said the cloud also provides less well-known benefits, such as a reduction in corporate income tax when companies tap into their operating expense budgets to pay for software as a service—as opposed to depreciating IT systems as capital expenses.
Wettmann, who on October 1, 2014 moderated a panel discussion about SaaS-based marketing applications at Oracle OpenWorld 2014 in San Francisco, says business users are becoming more comfortable with using technology in every aspect of their lives, just at a time when business technology is increasingly being designed to resemble familiar consumer applications. That’s leading to increased technological sophistication throughout the business, she said during an interview after her session. “What we see with cloud is applications are more configurable, need less coding, [and] less customization, so I can have a marketing technologist, a finance technologist, even an HR technologist, that can effectively try before they buy,” she said.
Moreover, she said, “the average user is much more tech-savvy today” than even five years ago.
There’s still a significant role for CIOs, she said, assuming they understand how that role has changed. “In the early days, [cloud meant] business users getting around IT,” she says. Today, given the importance of data governance, business users need CIOs to ensure they aren’t creating new silos of information. The more progressive CIOs are “really getting it, and saying, 'I need to be backing up those power users,’” she said.
Bill Mickow, vice president of technology at educational content, tools, and services company Follett Corporation, said during the panel discussion that business users “were included in every meeting” during the technology selection process that ultimately led the company to adopt Oracle’s cloud-based sales application. “You can’t have it be just an IT project. It’s got to have sales involvement from the start. Ideally, you need sales people there who are going to carry the torch for you in the rest of the organization,” he said.
Wettemann said her research shows that CRM technology delivers $8.71 for every dollar spent. “A lot of that is coming from the cloud story,” she said.
According to Wettemann, cloud applications deliver 1.7 times the return on investment as on-premise software of the same kind. There’s a less well-known advantage to using cloud software as well, she said, which is a tax benefit. “There’s a 5 percent discount using OPEX versus CAPEX,” she says, because businesses can take cloud software costs directly off the top line, instead of depreciating the cost over time.
