With its tremendous rise in popularity, vendors of all stripes are scrambling to position their offerings in the cloud. We’ll save definitions of the flavors of cloud implementations that are out there for another blog post. Just keep in mind that virtually all solution vendors are coming from a software development background. Since software is traditionally installed on premise and operated by the purchaser, it shouldn’t be a surprise that most self-described cloud products are exactly this model, except for off-premise hosting.
There is a different way to handle applications—managed services—which outsources business processes, not just computing power. Managed services include control by human experts that obviate the need for in-house resources. Classic examples of popular IT-related managed services are payroll and sales tax outsourcing. They make sense the same way that it is more economical for mid-sized companies to use outside lawyers, shipping companies, and building maintenance firms. Why hire and maintain staff to do thankless tasks that don’t make your company more competitive when, in fact, they distract from the core mission?
The natural confluence of cloud and managed services is, of course, cloud-delivered managed services. To evaluate them against traditional software or cloud applications, you have to take into account a third dimension—the services dimension. Let’s use Electronic Data Interchange (EDI) as an example. We can plot available EDI solutions on two important criteria, one axis representing how cloud-delivered they are, and the other axis showing how well integrated they are with ERP systems. Placing the solutions into the correct quadrants in the chart below is straightforward; depicting the services dimension is more challenging. While larger diameter objects mean more services included (bubble diagram style), using apples and oranges also acknowledges that managed services are not strictly comparable to software or webforms—you’re either outsourced or you’re not.
Here are some other ways to think about the distinction between managed services and other options:
- Having the finest lawnmower makes it easy to cut the grass. Having a lawn service means you don’t have to do it.
- A car that parallel parks by itself still means a wet dash to the door in a rainstorm. Valet parking is better.
- The easiest painting tools are way more difficult than having a professional painter do the job.