Software Licensing & Master Service Agreements : Chicago Software Licensing Lawyer & Attorney : Sam Conforti Law Firm : Master Service Agreements, Negotiations, Outsourcing : Cook County, Illinois

As many of you know, SandHill.com is the online resource created for enterprise software executives. Kamesh Pemmaraju heads cloud research for the SandHill Group and writes a weekly report on the latest happenings influencing the cloud computing community. His latest report entitled Top 5 Cloud Strategies for CIOs is based on a survey of 511 software executives. The survey deals with these executive’s perceptions of cloud computing, their initiatives, implementation issues, and any perceived benefits. His report presents the top 5 strategies CIOs should follow when considering cloud computing. I will present a brief synopsis of those findings here as follows:

1.       Treat this decision like any other business decision:  Pemmaraju simply means to look at all the alternatives and do a traditional compare and contracts analysis. Look at the ROI and weigh the risks.

2.       The cloud is coming – Embrace it: Pemmaraju quotes one executive, “The cloud will come - it's happening now even if it is coming with a lot of hype and a lot of buzzwords. It's a very logical transition - like we are going from individual car craftsmanship into the era of the industrialization of IT services.” A large amount of the survey respondents have already started trials and pilot projects to jump start the learning curve for their personnel.

3.       A sandbox spurs innovation: Create an innovation sandbox in the cloud. The drag on spending due to maintenance is lifted. This new found freedom allows IT departments to redirect efforts from infrastructure constraints to more creative ways to run the business model.

4.       Cloud computing is a furtherance of Outsourcing trend: With this in mind, Pemmaraju presents a short checklist when evaluating whether to move in this direction:

a.       Perform your due diligence and pick a good cloud computing vendor.

b.      Confirm that support levels are adequate.

c.       Obtain copies of vendor certifications (i.e. SAS 70 etc.)

d.      Is your data retrievable in your desired format?

e.      How is your data isolated and protected from others?

5.       Retrain your IT staff: As one CIO respondent succinctly stated, “The jobs of people who sit there patching thousands of servers each time there is a change—those jobs are going away.” The focus will turn from infrastructure to vendor management, and program management, and business analysis.

Pemmaraju concludes his report with an analysis of the impact open source is having on cloud computing. He states that proprietary licenses are lagging in their offerings for cloud computing and so many cloud platforms are run on top of open source stacks. This will have an effect on hardware sales as most companies will be trying to avoid the big expenditures on infrastructure.

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It has been a very busy 1^st quarter closing and I have not been able to post an article in a while. I cannot really explain the business activity other than to recognize that there is a “business cycle” and despite stimulus packages or not, our economy was going to emerge from the recession sooner or later. From the depths of the economic woes, it appears the economy is emerging later rather than sooner. There is a pent-up demand out there, for example durable items still have a tendency of wearing out and needing to be replaced. As far as software licensing and the consulting agreements needed to implement the software, procurement departments had been under a short leash, but projects are starting to come online.

In the interim, Houston Neal, Director of Marketing at Software Advice, has collected all the results of his survey on the ERP Implementation Strategies in use and presented them in an updated version of his article entitled ERP Implementation Strategies – A Guide to ERP Implementation Methodology (see my posting in this Blog immediately below). The results may be of interest and assist in your decision making process and which path to take. Neal has also inserted an interesting commentary section from the respondents claiming their implementation failed. Here is a quick glance at those results from the 45 respondents:

“Of those that answered “No,” we received the following comments:

“Logistics problem (visa issue delay, user delay for data collection, delay in top management support).” – Phased Rollout

“We are still under the progress of phased manner, only “Materials and Finance” is under parallel run and they’re facing some bugs/modifications.” – Parallel Adoption

“Still running both systems in parallel, 3 years later!” – Parallel Adoption

“1 year late, although all other success parameters achieved.” – Big Bang

“Concentrating on tools not architecture.” – Big Bang”

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