1.
2 n d
A c t
I n n o v a t i o n s
I n c . 6 0 6 -­‐ 1 8 8 8
B r u n s w i c k
S t .
H a l i f a x ,
N S
C a n a d a
B 3 J
3 J 8
Peter
G.
Hickey
This
white
paper
provides
insight
on
why
Cloud
enterprise
software
continues
to
gain
popularity
and
why
organizations
are
adopting
Cloud-­‐based
ECM
solutions.
April
2012
ECM
and
the
Cloud

2. 2nd
Act
Innovations
Inc.
2012
ECM
and
the
Cloud
2
Table
of
Contents
Executive
Summary
3
Continued
Increased
Interest
in
Cloud-­‐Based
SaaS
4
What
is
Cloud/SaaS
ECM?
4
Why
Organizations
are
Moving
to
the
Cloud
5
Hybrid
Solutions
5
Benefits
of
Cloud-­‐Based
ECM
Implementations
6
Total
Cost
of
Ownership
(TCO)
6
Quickly
Scale
Internal
Capabilities
6
Pay
as
You
Go
6
Reduce
Cost
and
Effort
of
Upgrades
6
Accessibility
6
Conclusion
6

3. 2nd
Act
Innovations
Inc.
2012
ECM
and
the
Cloud
3
Executive
Summary
Enterprise
Content
Management
(ECM)
has
become
a
significant
market
as
organizations
grapple
with
the
massive
amounts
of
information
they
come
into
contact
with
on
a
daily
basis.
Cloud-­‐based
ECM
will
represent
a
significant
portion
of
this
growth
as
it
offers
significant
savings
and
comparable
features
to
on-­‐premise
ECM
applications.
Cloud
computing
applications
typically
requires
companies
to
pay
a
monthly
fee,
allowing
businesses
to
better
manage
their
cash
flow
and
reduce
capital
investment
in
IT
resources
and
infrastructure.
This
whitepaper
provides
insight
on
why
Cloud
enterprise
software
continues
to
gain
popularity
and
why
organizations
are
adopting
Cloud-­‐based
ECM
solutions.

4. 2nd
Act
Innovations
Inc.
2012
ECM
and
the
Cloud
4
Continued
Increased
Interest
in
Cloud-­‐Based
SaaS
Growth
in
software
delivered
over
the
Cloud
continues
to
increase
in
a
dramatic
fashion.
In
2009
the
Software
as
a
Service
(SaaS)
market
had
worldwide
revenues
of
$13.1
billion.
IDC
forecasts
the
market
to
reach
$40.5
billion
by
2014,
representing
a
compound
annual
growth
rate
of
25.3%.i
This
trend
clearly
demonstrates
a
growing
acceptance
of
the
cloud
by
customers
but
also
signals
a
significant
change
in
software
delivery
by
vendors.
IDC
expects
that
less
than
15%
of
net-­‐new
software
firms
coming
to
market
will
ship
a
packaged
product
(on
CD).
By
2014,
approximately
34%
of
all
new
business
software
purchases
will
be
consumed
via
Software
as
a
Service
(SaaS),
and
SaaS
delivery
will
constitute
about
14.5%
of
worldwide
software
spending
across
all
primary
markets.ii
Robert
Mahowald,
vice
president
of
SaaS
and
cloud
services
research
at
IDC
put
it
this
way:
“Enterprise
IT
plans
are
rapidly
shifting
to
accommodate
the
growing
choices
for
sourcing
most
or
all
IT
software
functions,”
he
says.
This
includes
everything
“from
business
applications
to
software
development
and
testing,
to
service
and
desktop
management,
as
SaaS
services
become
available.”
iii
Gartner
states
that
the
ECM
market
grew
by
4.8%
in
2009
despite
global
economic
conditions
with
global
ECM
revenues
of
US$
3.5
billion
in
2009.iv
The
estimates
of
ECM’s
market
size
for
2014
range
from
$5.7
to
10.5
billion.
According
to
AIIM,
improving
efficiency
is
the
key
driver
for
continued
ECM
investment
across
all
sizes
of
organization.v
What
is
Cloud/SaaS
ECM?
Cloud
computing
delivers
a
new
method
for
organizations
to
use
applications.
Historically,
an
organization
would
buy
servers
and
install
them
within
their
premises.
Individual
licenses
of
software
used
across
the
organization
such
as
ECM,
enterprise
resource
planning
(ERP)
or
customer
resource
management
(CRM)
would
be
purchased
and
installed
on
the
servers.
Cloud
computing
eliminates
the
need
to
purchase
servers
and
buy
individual
licenses.
With
Cloud
computing,
organizations
access
applications
technologies
and
computing
power
on-­‐demand
from
internet
“clouds”
that
provide
the
server,
software
and
data
center.
The
Cloud
is
enabled
by
virtualization
technology
that
consolidates
hardware
to
improve
efficiency
and
makes
it
easier
and
less
expensive
to
deliver
on-­‐demand
computing
resources.
SaaS
is
a
delivery
model
that
allows
a
business
to
access
applications
on
a
Cloud
infrastructure.vi

5. 2nd
Act
Innovations
Inc.
2012
ECM
and
the
Cloud
5
Why
Organizations
are
Moving
to
the
Cloud
Simply
put,
organizations
(particularly
small
to
medium
enterprises
-­‐
SMEs),
are
attracted
to
the
Cloud
because
it
delivers
business
efficiencies
that
directly
translate
into
cost
savings.
An
uncertain
economy,
increased
competition,
higher
customer
expectations
and
a
shortage
in
affordable
experienced
employees
to
build
and
maintain
IT
infrastructure
are
all
key
drivers.
In
addition
to
cost
savings,
Cloud/SaaS
computing’s
recent
growth
is
also
a
result
of
a
decrease
in
objections
that
supported
on-­‐premise
computing.
These
objections
include:
• The
misperception
that
on-­‐premise
solutions
offer
greater
functionality.
Today
most
software
applications
offer
identical
functionality
whether
it’s
via
the
cloud
or
on-­‐premise.
• Security
has
been
the
major
concern;
however
cloud
providers
have
responded
by
providing
offerings
that
are
both
highly
reliable,
secure,
and
widely-­‐accepted
in
the
market.
An
example
of
this
is
the
U.S.
government's
Central
Intelligence
Agency
which
is
one
of
its
most
secretive
operations,
and
also
its
strongest
advocate
of
cloud
computing.
The
CIA
has
adopted
cloud
computing
in
a
big
way,
and
the
agency
believes
that
the
cloud
approach
makes
IT
environments
more
flexible
and
secure.vii
Hybrid
Solutions
Oris4
is
one
of
several
products
to
be
offered
as
a
hybrid
solution.
This
has
been
done
as
a
result
of
client
expectations
of
flexibility.
While
most
clients
opt
for
a
cloud-­‐based
solution,
some
still
request
their
ECM
be
deployed
as
an
on-­‐premise
solution.
Typically
on-­‐premise
solutions
are
used
by
organizations
with
an
existing
infrastructure,
security
protocols
requiring
on-­‐premise
storage
of
all
information,
or
a
combination
of
both.
Alternatively,
an
organization
is
likely
to
prefer
a
Cloud
implementation
if
it:
• Wishes
to
avoid
an
ongoing
investment
in
infrastructure
• Wishes
to
closely
match
monthly
IT
expenses
with
the
variable
conditions
of
the
business
• Prefers
making
a
single
monthly
payment
• Wants
to
be
up
and
running
quickly
with
their
selected
solution

6. 2nd
Act
Innovations
Inc.
2012
ECM
and
the
Cloud
6
Benefits
of
Cloud-­‐Based
ECM
Implementations
Using
a
Cloud/SaaS-­‐based
ECM
implementation
has
a
number
of
benefits
for
companies
regardless
of
their
size.
Total
Cost
of
Ownership
(TCO)
The
total
cost
of
ownership
for
any
SaaS
system
can
provide
a
significant
reduction
in
costs,
both
in
the
short
and
long
term.
Many
Cloud
applications
and
services
share
resources
and
costs
among
a
large
pool
of
users.
Quickly
Scale
Internal
Capabilities
As
companies
grow
and
add
people
they
can
typically
add
more
users
very
quickly
to
a
cloud
application.
Because
the
application
is
Cloud-­‐based,
remote
offices
do
not
require
their
own
separate
infrastructure.
Instead
of
spending
money
and
time
building
an
infrastructure,
organizations
can,
in
most
cases,
deploy
the
application
immediately.
Pay
as
You
Go
Enterprise
software
typically
requires
a
capital
investment.
On
the
other
hand,
Cloud-­‐based
applications
allow
companies
to
pay
as
they
go.
Some
companies
offer
monthly
or
yearly
plans
and
many
have
the
ability
to
export
your
information
to
a
competing
product
should
your
organization
decide
to
stop
using
a
particular
ECM.
Reduce
Cost
and
Effort
of
Upgrades
In
a
Forrester
survey,
68%
of
respondents
selected
an
SaaS
implementation
because
they
wanted
to
reduce
cost
and
effort
of
upgrades.viii
This
is
possible
because
the
application
provider
typically
performs
all
maintenance
and
upgrades
of
the
application.
Accessibility
Cloud-­‐based
solutions
allow
users
to
access
their
applications
from
any
place
at
any
time
without
the
need
for
their
organization
to
install
a
virtual
private
network
(VPN).
ix
Conclusion
Organizations
can
benefit
from
lower
overall
costs,
scalability,
ease
of
deployment
and
less
ongoing
maintenance
by
using
a
Cloud
application.
While
there
are
instances
in
which
an
on-­‐premise
solution
may
be
appropriate
for
an
organization,
reasons
against
using
cloud-­‐based
applications
such
as
security
concerns
or
lack
of
functionality
continue
to
be
proven
false.

7. 2nd
Act
Innovations
Inc.
2012
ECM
and
the
Cloud
7
i
“IDC:
One
Third
of
All
Software
Delivered
Via
cloud
in
2014”
http://www.zdnet.com/blog/service-­‐oriented/idc-­‐very-­‐soon-­‐a-­‐third-­‐of-­‐all-­‐
software-­‐delivered-­‐via-­‐cloud/5474
ii
ibid
iii
ibid
iv
“CMSWire:
ECM
Market
Fragments,
While
IBM,
Microsoft,
EMC
Lead
Gartner’s
Magic
Quadrant”
http://www.cmswire.com/cms/enterprise-­‐cms/ecm-­‐market-­‐
fragments-­‐while-­‐ibm-­‐microsoft-­‐emc-­‐lead-­‐gartners-­‐magic-­‐quadrant-­‐009309.php
v
“AIIM,
State
of
the
ECM
Industry
2011”,
2011
vi
“Sage:
ERP
and
the
Cloud:
What
You
Need
to
Know”,
July
11,
2011
vii
“Computerworld:
CIA
endorses
cloud
computing,
but
only
internally”,
October
7,
2009.
http://www.computerworld.com/s/article/9139016/CIA_endorses_cloud_computi
ng_but_only_internally
viii
“Forrester:
State
of
ERP
in
2011”,
2011
http://www.forrester.com/The+State+Of+ERP+In+2011+Customers+Have+More+
Options+In+Spite+Of+Market+Consolidation/fulltext/-­‐/E-­‐RES55901
viii
“Sage:
ERP
and
the
Cloud:
What
You
Need
to
Know”,
July
11,
2011