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The adoption of SaaS is going on quicker and slower than you suppose

Comment: The cloud rollout appears to be in full swing, but actual enterprise rollout will take much longer, according to Goldman Sachs.

Image: putilich, Getty Images / iStockphoto

At the end of a recent article by analyst Benedict Evans on digital transformation, machine learning, and mainframes, there is a great phrase: “Gradually, then suddenly.” Evans borrowed the phrase from Ernest Hemingway’s The Sun Also Rises (a character asks, “How did you go bankrupt? I pointed out that, as fast as we think technology is moving, corporate IT tends to slowly developing, Evans adds an interesting color.

SEE: Top Cloud Advances of the Decade (Free PDF) (TechRepublic)

We are ahead of ourselves

Speaking of the cloud and Software-as-a-Service (SaaS): It’s easy to assume that CIOs have adopted the cloud en masse – simple, but wrong. As I mentioned earlier, while we like to talk about the cloud as if AWS, Microsoft, and Google are splitting an established market, the reality is that up to 95% of all IT spending is firmly localized. Are we coming into a bleak future? Secure. But in corporate IT, the future tends to be a long one.

Moving from Infrastructure-as-a-Service (IaaS, which we often confuse with “cloud” when it’s just one element of cloud computing) to SaaS, it’s similar. As Evans wrote referring to the research by Goldman Sachs (Figure A.), “If you live in Silicon Valley, it’s natural to think that cloud and SaaS are old and worn and boring, but … less than a quarter of that [enterprise] Workflows have been in the cloud so far, and they’re moving slower than expected. “Why? Because” This stuff takes time, and you don’t necessarily have the budget or the justification to rebuild everything overnight. ”

Figure A.


Image: Goldman Sachs Global Investment Research

Even these forward-looking three-year projections can be optimistic in the absence of a pandemic to accelerate digital transformation projects. Corporate IT is gradual, as Evans found.

Until it suddenly happens.

The ongoing COVID-19 pandemic offers many “sudden” moments, Evans said:

I spoke to a large CPG company that could be perfectly happy with their ERP, except that they can’t ship less than 1,000 units per order and now they want to sell direct to the consumer (this is part of the Shopify story.) . I’ve also spoken to people at a large retailer who were perfectly happy with their point of sale system but found that it couldn’t be extended to in-store pickup online. The old systems are good at the old things.

“Old systems are good at old things.” That works fine … until it doesn’t work. Customer expectations have shifted due to the COVID-19 pandemic or other factors, and suddenly the old technology no longer works to solve new problems. All of this may go a long way to say that cloud, SaaS, and [name your technology trend that you figured was already done] are increasingly mainstream, but that doesn’t mean they have reached mass adoption.

Disclosure: I work for MongoDB, but the views expressed here are mine.

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