Big SaaS Done Right

These organizations are floating more and more applications into the cloud. They're scaling up, while keeping a keen eye on the risks and rewards.

Guardian Life Insurance isn't about to take big risks when making IT investments, and CIO Frank Wander will be the first to tell you that he doesn't have a cloud computing strategy, per se.

But over the past five years, the $10 billion financial services company has moved 18 applications into the cloud. It shut down a compute grid and moved its actuarial modeling application into an Amazon EC2 cloud. And it's now in the process of broadly deploying two major software-as-a-service suites.

One of the two is Workday's human resource management suite. Guardian wasn't ready to reveal the other, but at the Atmosphere conference last fall, Google announced that it had signed Guardian as a Google Apps customer.

There's no cloud agenda at work here, says Wander. Each service has earned its seat at the table by undergoing a rigorous technology acquisition process that has been updated to include considerations unique to SaaS and other cloud services. Each service has also passed through a collaborative review process that involved the legal, security and sourcing groups in addition to IT.

"We don't do anything because it's cloud. But if the financials look right, if the risk profile looks right, if the richness and robustness look right, we go with that solution," says Wander.

The sheer breadth of Guardian's move to the cloud puts the company on the leading edge among Fortune 250 organizations. The extent of its commitment to cloud services is also changing the business's IT infrastructure and redefining roles in the IT organization.

As more corporate infrastructure moves to SaaS, it's important for organizations to build a strong foundation of best practices to manage risks around security, uptime guarantees, compliance, limitations of liability, remedies and other contract details, say Wander and other IT executives. The business must be fully engaged in the technology acquisition process, and the organization must follow best practices that are well thought out -- from the initial request for information to integration, ongoing management and contract renewal.

Computerworld talked with several organizations about the challenges they face in scaling up with SaaS and other cloud services, why the technology still isn't the best fit for some applications or business requirements, and why they decided to sign on -- or walk away.

Leading by Example

Wander "is a real leader," says Robert McNeill, vice president of research at HFS Research. In many organizations, he says, SaaS "happens" to CIOs as business units bypass IT. "What's interesting is that he is using SaaS in IT -- an area that he controls. He is embracing SaaS as a way of changing the business," says McNeill.

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