We're Still Madly Addicted To Buying Software Licences

Here at Lifehacker, we're big on cloud-based services for both personal and work use. It seems that Australian businesses in general don't share that view yet, with new survey data suggesting the vast majority would rather pay up-front for finance and other apps.

Picture by lydiashiningbrightly

A survey of 611 Australian small businesses conducted by finance software firm Sage found that very few businesses wanted cloud-based, pay-as-you-go software for finance, ERP and other functions. 95% said they would rather buy a payroll application, 88% said they would rather buy ERP systems, 84% said they wanted on-premises HR and 73% preferred on-premises CRM. (The sample of businesses, which had between 1 and 999 employees, was weighted to match overall ABS profiles of Australian businesses.)

Security concerns are, I suspect, a major driver here, but insisting on running and maintaining systems that don't actually relate to your main business function seems short-sighted to me. Given the high cost of much specialised business software, it also seems unnecessarily expensive. What do you think?


Comments

    Because business can't rely on external companies to run their day-to-day business. Given the recent failures of "cloud" services it's pretty easy to see why businesses simply can't take these risks. Too many things to rely on, if any 1 thing in a chain fails your out of luck. Then it's hard to large external companies to prioritise based on their customers needs. If you loose internet connection, you think Telstra or whatever telco is at fault will prioritise your re-connection over others? Where if you loose power to a server room/data centre you tell tell your sys admins what server need to come up first, and where it's ok to take compromises. To put simply, cloud services are fine if your running a very small business, but as soon as you need to have a bit of control they're useless.

    Personally (not business), i love cloud apps
    For me the real issue still is bandwidth. You need access to great bandwidth to be able to show off some of these apps, especially mobile bandwidth. And all though it is there, carriers perform entirely differently (usually based on price).

    As far as licensing is concerned for personally purchased products, Id like to see more 'one off' payments and lifetime upgrades, or a reasonable once off payment for the next 10 years. I love license agreements that allow me to upgrade several times in a license's life. IT makes me feel like IM getting more bang for my buck.

    I think the main issue with pay as you go systems is that execs like to own something at the end of the day. Similar to the rent vs mortgage argument, owners of companies want to own the software and not have to be paying it for the lifespan of their business. Which in some cases (although not all) it can amount to much more money when paying over an extended period.

    Bandwidth is expensive and a smb genally can't justify redundant links. Even if they do in most places, all providers are sharing the same backhaul/exchange/powergrids.

    The cost to business of hours or days of no internet access generally outweighs the benefit.

    for personal use, all go, but with business tend not to recommend it for anything but email.

    For me the single biggest concern (even above the general cloud security concerns highlighted lately) is ownership of information. If I'm storing or maintaining even remotely valuable (to me) data, I don't want to be locked out or have my data held randsom over a billing error or general disagreement.

    Another: once I've bought a local license for something, I have the luxury of not renewing my license if I decide I don't need the latest greatest updates (or in many cases, if the 'latest greatest' actually breaks key functionality or workflows I rely upon). In a worst case scenario, if a company wants to be a douche and change the rules half way through the game there's always a crack available somewhere.

    The other significant reason for me is that if the service provider goes bust, gets hacked or whatever, I'm not at the mercy of their ability to get their shit together in a crisis.

    There are numerous reasons to avoid cloud systems. Steam provides a few examples from a different arena (and not strictly a "cloud" setup): you can be locked out at any time. Products can be unilaterally withdrawn from you. You can't transfer software because of technical, and not just legal, impediments. The provider can totally control pricing. You have no idea where your data is going and who has access to it.

    Ferret's point about data being held to ransom is a good one. Does a cloud provider get a "lien" over your data if there is an unpaid bill? This would of course never happen with licensed software.

    Who pays for losses if the cloud becomes unaccessible? You, your ISP, the cloud provider?

    The cloud is probably good for non-essential data that needs to be accessible anywhere - personal media, for example. But for sensitive or missions critical data it's a terrible idea to hand control over to an unaccountable third party.

    given a server life of 5 years without significant upgrades, it tends to be cheaper for most companies to stick with buying hardware and licenses.

    For corporate-level service and reliability, its cheap and sensible for small business to go with cloud services. It gives them so much flexibility for low initial outlay. Large companies can run custom cloud apps and get great deals/special treatment when they deal with the big cloud providers.

    Medium-sized companies lose out - they're not big enough to get special deals or run their own cloud, but they do require a fair amount of power and often have specialized needs.

    Personally, I can't wait for the day where I just have one server on each site - to push the boot images, run the lan, and handle the firewall/intersite networking.

    Not all cloud companies are ethical. We have been stung once locked in with new charges for existing functionality. The choice - leave or where it.

    Big business have some control if they threaten to take their business else where. Small business are not such a big loss.

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