SaaS Sprawl: Proliferation of Best-of-Breed Cloud Apps Complicates Integration
Customers who use vertical cloud programs from industry-leading software companies have all struggled to consolidate their SaaS infrastructure and applications to combat duplication of capabilities and difficulty accessing data for analytics, according to Informatica, an independent provider of IT solutions. And it's especially important that every company more than 10 years old pay attention to SaaS sprawl, the term Informatica uses for this issue.
SaaS has moved beyond standalone software functionality to a business platform for mission-critical applications, according to a company representative, whose payoff, scalability, accessibility and customization capabilities have sparked enterprise-wide integration. But there are also challenges. Talkin' Cloud recently chatted with Graeme Thompson, senior vice president and CIO, Informatica, about these benefits and obstacles.
IT Operational Challenges, Process Fragmentation
Informatica's Thompson says that SaaS sprawl is an IT operational challenge. Depending on how you look at it, either consider it a process fragmentation issue or a lack of SaaS cloud integration—or both—according to Thompson. Most cloud companies seem to have difficulties concerning these, with some exceptions.
Gradually, before anyone became aware of it, all these core business processes are being siloed. They say history does not repeat itself, but that it often rhymes. In any event, Informatica faced similar problems integrating standalone on-premises applications coming out of the 1990s, which it resolved between 2003-2004, according to Thompson.
Along Came Oracle and SAP
About that same time frame in the mid 2000s, Oracle and SAP came along and began swallowing up all the niche on-premises enterprise applications, according to Thompson. Who can forget the epic U.S. and Plaintiff States v Oracle Corp. antitrust lawsuit over the acquisition of HR software maker PeopleSoft? (By the way, Oracle won.)
“Now you have the same problem in the cloud,” Thompson says. “They're having to go through the same process of consolidating and integrating (niche cloud applications).”
Best-of-breed Applications versus the 'Good Enough' Suite
The issue regarding creating fully consolidated and integrated enterprise suites in the cloud concerns business function owners who prefer a best-of-breed application versus the 'good enough' solution offered in shrink-wrapped groupware. Let's take a look at HR software again. For example, Informatica prefers a best-of-breed hiring solution, such as it considers gr8 People, instead of an integrated application in an enterprise suite.
“With gr8 People, the process starts in the app when a person starts (the recruiting process),” Thompson says. “Then when they're hired you've got to enroll them in benefits, payroll and add their location, phone and email information in Workday. Then you have to go live with the employee in Salesforce or SAP.”
Problem is that the information in gr8 People is only available to the hiring decision function and not the corporation as a whole, according to Thompson. “Makes me wish more applications were used by business departments,” he says.
Two Ways to Resolve Best-of-breed versus Suite
Corporations have two different ways to resolve the best-of-breed vertical application versus the alternative solution available in the enterprise suite. First, everyone in the company can consolidate on the enterprise suite and throw out the best-of-breed application. Or second, a cloud application integration solution can be used to “stitch together” the best-of-breed application with the rest of the enterprise suite, according to Thompson.
In some cases, however, the best-of-breed application may be the only realistic answer, such as in professional industries like litigation, where artificial intelligence helps lawyers in e-discovery, which has become the default standard. And that also occurs in situations where a public cloud platform only offers features through open API releases.
“If you integrate the best-of-breed application with the enterprise suite, then sales and marketing can use the support data,” Thompson says. “The CIO cannot let the same problem happen again (as in the mid 2000s).
And if CIOs choose application integration, they will be able to go from saying “look at the mess I inherited” to “look how smart I am,” according to Thompson.
Business Line Decision Makers Take on IT
Until 2015, virtually all enterprise software choices were centralized with the IT business decision makers, according to Thompson. Now the business lines make more decisions.
“That's because we need to move much more quickly,” Thompson says. “The cost is low to start with these business line applications, which allows quick decisions. However, the downside is that you have a lot of these low-cost applications, but IT doesn't know how many.”
In the old days, the CIO used to make his reputation by deploying applications on his own, according to Thompson. Now he has to agree with the business line decision makers to integrate the enterprise suite with the best-of-breed applications, but without the pain.
“Oracle and SAP will still provide 'good enough' functionality,” Thompson says. “But not everyone will opt into big software solutions. Some will still want best-of-breed applications.”