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European CIO Heads Not in the Cloud

by Michael Maoz  |  March 6, 2009  |  1 Comment

I just got back from the Gartner EU CRM Summit. Attendance was surprisingly strong given a challenging economy and the absence of most representatives from the banking sector. Their absence is logical on the other hand, and illogical on the other. I get that budgets are slashed and that they are in distress. That is the obvious, but I would also think that now is when they’d want to double efforts on cost reduction while maintaining high levels of customer satisfaction. It would seem, however, that the good times are when they plan ahead, and the bad times they cocoon.

The surprising factor was the relative lack of interest in Cloud Computing and software as a service (SaaS). Those who get it get it, and those who don’t think they do. I held many individual sessions with IT and business buyers from all over Europe, and for core capabilities such as my area of the customer service contact center, EU CIOs and managers are not ready. Once you tell them that provider x uses a data center in Texas, or California, or Virginia, and that is where you data will go if you send it to their database, the conversation freezes up.

Why are European IT managers nervous about SaaS for complex use? I should step back and say that for salesforce automation, there is much less resistance. They do not view sales applications as mission critical, and can live with some of the limitations. But for the Contact Center they are highly skeptical about compliance with EU Data Privacy directives. Safe Harbor agreements are not enough. They are not as much concerned with the reality but with the perception. They also do not believe that the US-based SaaS providers have enough understanding of EU security and privacy requirements.

Even those who are satisfied with the answers on security and privacy, there is still the issue of latency and uptime, unplanned outages, and the reality behind TCO over a five to seven year period where there is a lot of change, data storage, backend integration, and telephony involved.

Cloud computing remains an intriguing conversation for EU IT leaders, but they are taking a pragmatic approach for the complex customer service contact center.

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Michael Maoz
VP Distinguished Analyst
13 years at Gartner
26 years IT industry

Michael Maoz is a research vice president and distinguished analyst in Gartner Research. His research focuses on CRM and customer-centric Web strategies. Mr. Maoz is the research leader for both the customer service and support strategies area and customer-centric Web… Read Full Bio

Thoughts on European CIO Heads Not in the Cloud

  1. Fred Landis says:

    Interesting feedback from Europe Michael. Callidus has learned that SaaS adoption in Europe is not as pervasive as in the States for many of the same reasons surrounding distrust of data privacy policies to uptime commitments. Interesting to note that has backed off their Dreamforce Europe this year in favor of a less expensive Cloudforce London. Is it due to the economic crunch, less excitement overcloud computing in Europe or some combination? I think there will be more adoption of SaaS in Europe once there is established maturity of back office and mission critical SaaS in the States. By then the pressure to be more cost competitive will demand they be less risk averse.

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