In the early days of Software as a Service (SaaS), some adopters had the impression that version upgrades, security updates, patches, and other changes, were no longer their problem. All of these issues would be dealt with in the cloud, and all the user would have to do, was log on and enjoy the upgraded functionality. Unfortunately, that’s not quite how it’s worked out.
Instead, SaaS users have found themselves on a treadmill of upgrades and version changes, all requiring action on their part.
Take Microsoft’s latest move in this direction. It recently announced that it would be releasing new versions of its CRM/ERP Dynamics 365 offering, twice a year from now on. Mo Osborne, Vice President and Chief Operating Officer for Business Applications Engineering, blogged about this release cadence.
Ms. Osborne sees the new version upgrade regime, as helping businesses to achieve digital transformation more quickly, by adding new capabilities each April and October, to the Dynamics 365 service. That doesn’t mean there won’t be other fixes and changes during the rest of the year – just that the major updates will be at these times.
The Microsoft VP’s vision is that this new update cadence will reduce costs for users, while ensuring that they have access to the latest functionality. Any potentially disruptive features in the upgrade will be switched off by default to allow testing before implementation. Changes will be signalled in advance by release notes, and there’ll be a user sandbox to allow testing away from their live production environments.
There are lots of advantages in this regime, for Microsoft. Life for Microsoft becomes a lot easier, because having all users on one version allows for more economical maintenance. Here’s the rub, though. Every customer is going to receive updates in a continuous schedule.
So businesses will have to junk older version of Dynamics 365 and update to the latest version. Microsoft has issued sets of drop dead dates, after which it will no longer support the older versions.
Users suffering upgrade fatigue
Microsoft’s twice yearly updates begin to sound pretty reasonable compared to some other SaaS providers. Oracle updates quarterly, and Salesforce three times a year. Oracle in fact, doesn’t force its users to take its updates.
Even so, many users feel that these updates are so frequent that they don’t contain anything worth updating to, and are simply a time-consuming distraction that busy IT support sections could do without.
Small and medium sized businesses are particularly dismayed at the level of management and resource their SaaS applications demand. Small businesses find themselves having to deal with multiple subscriptions, and are forced into upgrades they probably wouldn’t bother with, if they weren’t using SaaS.
Furthermore, some businesses feel that Oracle and SAP updates are difficult to implement. They feel that some software houses that have adapted their on-prem applications, to cloud-based SaaS versions, haven’t always replicated the full functionality available in the original application.
Part of the reason for this, is that upgrades to these systems can have major effects on business critical systems, with high levels of corporate security around them. These include HR, with its data protection risks, payroll, accounts payable and so on. Many of these systems already have to be changed at least once a year because of changing taxation and allowance rules in the budget.
The cautious approach adopted by “safety first” finance professionals, is generally to change accounting systems as little as possible, due to the amount of testing and assurance that has to take place after each change. And where a change has to be made, they want a long notice period before the change is implemented, to ensure that they’re ready. This is in contrast to some of the ERP providers, who want to push frequent upgrades at their users.
At SAP’s 2018 SAPPHIRE conference, the software giant advised that its cloud-based S/4HANA would be producing 20% more functionality every quarter. So that’s a regime of more or less constant upgrades. But is this really what users want, or are they worried that this level of change carries a risk of instability in their key corporate systems? It’s notable that there is also an on-prem version of S/4HANA, so it’s possible that SAP senses some upgrade resistance from its users, and is hedging its bets.
Certainly, many users are rethinking their migration strategies. There’s a general feeling that the cloud, and SaaS offerings from the traditional ERP houses, have strong competition from those applications that are “cloud natives” – they were conceived and developed specifically to work in an SaaS context.
Is a return to building software on the horizon?
The idea of buying software by subscription, instead of building it in-house, has taken root strongly over the past few years. Only now, are IT and corporate managers starting to ask critical questions about whether this is really the cheapest and most convenient way to get the results they want.
Some analysts are questioning whether the cost-effectiveness evidence for SaaS still stacks up. Installing software and managing infrastructure used to be expensive, so SaaS made sense. Those two activities are now much cheaper – so does SaaS still save money?
It’s a brave Chief Information Officer who strikes out against a mega trend such as SaaS. But eventually, one will break ranks and may possibly decide that the constant upgrades involved in running their ERP on a SaaS basis, are expensive, pointless and disruptive. When that happens, the whole market will enter a new phase with major consequences for some of the players.