Blog post

Cloud Shift – Timing is almost everything

By Stephen White | May 30, 2016 | 0 Comments

licensingIT Cost Optimizationcloudasset management

Last week I had an all too familiar discussion, without a business case, completed testing or adoption plan an organization were already committing to transition a perpetual on-premises software licensing contract to a SaaS model.

Making commitments to a cloud transition, or cloud shift, is of course a very normal business activity, but committing an organizations expenditure  to a subscription model that may not be used for two years shouldn’t be considered normal business behavior.

In some scenarios this type of action is a response to an effective sales pitch, in others a response to executive orders, or reacting to hype.

In our presentations regarding the cloud computing myths, Gartner makes the point that ‘the CEO said so’, is not a cloud strategy. That may seem obvious, but one wonders how often this prevails?

To transition directly from an on-premises perpetual model to cloud subscriptions is a significant shift. Notably optional maintenance payments that enable costs to be switched off if prices escalate or scenarios change is sacrificed, and once committed and using the cloud solution, it may become painful to exit.

The significance of a cloud shift, is one that should compel the organization, it’s IT leaders, finance and executives to examine ‘what if’ scenarios and capacity to exit or invoke a plan B.

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Ask yourself. If the organization is not ready to adopt now, should we be taking a leap of faith now? Our current contract may be due for renewal, but does that compel a rushed (or rash) commitment to an alternative cost model?

Perpetual licensing is not extinct – yet. During Gartner’s ITAM and Procurement summits in Dallas and London later this year I will be running breakout sessions which evaluate the arguments for and against continuing to leverage perpetual models, and examining options to defer cloud subscriptions and commitments to a cloud shift until the time is right.

 

 

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