SaaS: CIOs Think Hard about Cloud Collaboration

GlaxoSmithKline, Coca-Cola, Panasonic, and the City of Los Angeles.  Big name organizations, and all of them have moved their email systems into the cloud.  In 2009 IDC estimates that about 2 percent of all business email inboses — about 20 million — were located in the cloud.  That number has doubled since 2007.

CIOs basically have three choices when it comes to email systems:  on-premises, hosted or SaaS.  SaaS uses a multi-tenanted architecture.  Hosted means that an outside vendor manages the email while the actual email servers might be either located remotely or on-site.

The SaaS email segment has benefits of cost savings obtained from the multi-tenant architecture.  It can make mobile access to email for remote employees easier.  It offloads duties from busy IT staff.  And the feature set of SaaS email also rivals or sometimes even exceeds what is possible with on-site hosting options.  The benefits have got a lot of people thinking.

Big-name vendors have sensed the change in attitude around SaaS email and there are now many options available, from vendors like Microsoft, Google, IBM and Cisco.  Microsoft has fully embraced the cloud.  Microsoft CIO Tony Scott said that “We’ll look back five years from now and say, ‘Why would anyone run their own e-mail?'”.

And email is probably just the first step.  As companies see the benefits of SaaS and become more comfortable with it, they’re likely to become interested in follow-on SaaS features and services.  Microsoft, for example, also sells their Business Productivity Online Suite that includes SharePoint and Web conferencing.  IBM has Lotus-Live Notes which bundles email, calendaring, and instant messaging.  Google bundles in their Google Apps Suite that includes word processing, spreadsheet, and presentation software.

So CIOs are thinking about their options.  Steve Ballmer, Microsoft’s CIO, said that he hasn’t met a customer where the issue of cloud computing hasn’t been raised.  But CIOs need to consider all perspectives.  And for many, their thoughts are still  clouded by issues with SaaS that focus around security and privacy, regulatory compliance, data protection and recovery, ability to later migrate to competing solutions, integration with other software applications, and authentication.  In the short term, the decision is still a tough one.  Longer term, cloud-based email looks like a sure thing.