Organisations are increasingly moving data and applications to the public cloud, running hybrid IT environments that enable them to cut infrastructure costs while speeding up the delivery of technology projects.
In fact, public cloud services are becoming so popular, Gartner believes the market in Australia will hit $4.15 billion this year, representing almost 24 per cent year-on-year growth compared to 2014.
Learn how smart CIOs are protecting customers from security breaches
But when moving to the cloud, successfully integrating software-as- a-service (SaaS) applications with existing on-premise software is vital and may make the difference between success or failure of cloud projects. And configuring these multiple applications to share data in the cloud is key.
According to Alan King, managing director at Australian systems integrator, Infront Systems, integrating SaaS apps with on premise software is a critical problem enterprises need to solve as they move more services into the cloud.
"Analysts say that within three years, most enterprises will have externalised between 15 and 27 services that they would normally have consumed on-premise. That is a big problem: How we take that disaggregation of critical data -- your ERP, CRM and productivity apps -- and leverage that in a consistent, reliable way," he says. This is something Infront's customers identify as a major pain point.
"They used to have a single source of truth on-premise, where critical business data existed. Now, they have external services where this data exists, with a desperate need to integrate that data back on-premise to leverage it for business value," King says.
Although organisations are succeeding with cloud integration, Infront's general manager, Glenn Powell, believes they are far less efficient than they were when systems were bolted on-premise. Application integration points were taken for granted on-premise, and organisations never waited for the business case to be fully developed before they went to a SaaS model.
This is now driving big inefficiencies, he says. As organisations take advantage of social media, mobile and the Internet of Things, the number of connections IT departments need to manage increases by an order of magnitude, Gartner research director, Daryl Carlton, points out.
For instance, organisations may need to work out how many database sockets they are going to open up to enable order processing, which is now being done by customers, not staff.
"Or maybe order processing is being done by the vending machine through a machine-to-machine interface," he says.
Organisations increasingly talk about the difficulty of getting the right data to the right people so they can make a decision, Carlton continues. The challenge is that this data is often dependent on the application that creates and maintains it.
"In reality we can't get to that data unless we go through an SAP or Oracle application," he says.
As organisations create data that is fundamentally separated from on-premise applications -- but accessible by many different services --they are reducing their reliance on core systems and starting to look at other vendor partnerships, Carlton says.
"I have been exposing my relationships with core vendors that I had built my business upon and they are no longer necessarily the people I want to work with going forward. And I am going to be looking at alternate vendors for the innovative applications," he says.
Carlton believes many organisations will start 'trading out' from an existing ERP back-end as they move into cloud service arrangements.
"For example, there are many cloud-based HR and employment solutions in the market today chipping away at vendors that offer recruitment software that runs on-premise," he says. "I would find it difficult to find a company that has its own recruitment software running on-premise. Everybody is using something like PageUp."
This means organisations no longer need that HR functionality -- along with CRM and order maintenance for example -- in their core ERP systems. Feature-rich apps and data are also being moved to the cloud but interfaced with corporate data and legacy apps at the back-end, Carlton says. In addition, the types of data and the devices and mechanisms being used to store information is changing.
"Now I need to capture video, audio and image and have these accessible through my core applications. That job ticketing system was previously just a transactional system which said 'go to Pickle St in Port Melbourne and find that piece of broken hardware'," he explains.
"Now, I am going to send them [the technician], a geospatial database and pictures of its condition the last time it was worked on. This information is not going to be held in my SQL database -- it's in the cloud and accessible on a tablet."
Ajay Bhatia, CIO at carsales.com.au, says integration between cloud apps needs to be seamless. Carsales has achieved this with a fraud checking system that sits with a cloud provider and interacts with the vehicle seller's main website.
"The user doesn't know we are doing fraud checks on them and sending it to the cloud provider to do that check," Bhatia says. "The consumer cannot know that there are five providers involved in making that page load or making that application work."
Carsales also uses Webtrends to track and improve on its website. For example, the system tracks who's clicking and ignoring certain buttons on the site, and if people will click on a button that has changed colour.
"All that information is tracked by Webtrends. That's a SaaS model -- consumers don't know that it's seamless," he says.
When selecting a SaaS supplier, Bhatia says it's crucial the vendor allows the organisation to access and store data on-premise. Bhatia has a copy of the data that Webtrends is tracking.
"I don't use that copy on-premise but that copy goes into my data warehouse. I may want to do some complex queries -- those that are not tracked in Webtrends but are tracked by some of our business systems. I can do cross-system queries in the data warehouse," he says.
"I don't have to ask Webtrends for access to data when I need to do a query across systems. It's easy as I have an API to download the data as I wish."
Read more:Maintaining a hybrid cloud environment
Carsales also offers its customers an SMS service and uses a third-party SaaS provider to deliver those messages.
"Sometimes one provider's systems can be down and we need to connect with nanother provider. So we have a multivendor scenario where 95 per cent of our SMS messages go through our primary provider and the remainder through our secondary provider," Bhatia says. "That's an architectural decision we have taken on integrating with these third-party SaaS providers. The benefit is continued service for us."
Carsales will move more applications to the cloud in the future using the same principles, Bhatia says.
"The scenario I have provided for our SMS service also applies to payment systems," he says. "You need to integrate with a couple of payment systems -- so when one is down, you can use the other."
Organisations also need to be aware that working across multiple systems and cloud providers does increase the risk of hacking, says Bhatia. "Working across cloud providers opens you up. It may be you that gets hacked or the cloud provider -- it just increases the combinations of possibilities that mean security becomes a consideration when you pick a provider," he says.
"You need to ask how secure they are and how easy it is to integrate into their authentication system."
Cloud integration mistakes
Organisations are making a number of mistakes when it comes to integrating SaaS apps in the cloud and on-premise.
Gartner's Carlton says many are still trying to choose the richest SaaS application but instead need to be looking at the performance of the app and its ability to integrate into an overall portfolio.
"We've been forecasting this at Gartner -- one survey showed that chief executives measure value and performance of IT based on operational performance metrics rather than features and functionality," Carlton says.
"The IT organisation is often driven by line-of-business to pick the most feature-rich application and often line-of-business is saying 'this is our only chance to get everything we want, let's throw everything in there that we might possibly want to have'.
"But you end up with this huge application that is never going to finish on time or on budget. The CEO and CFO look at this financial disaster and realise the app performs badly and has cost a lot of money."
Purchasing decisions need to shift to consider operational performance metrics beyond features and functionality, and how new SaaS apps will contribute to the way the business runs in the future, Carlton says.
The IT organisation also needs to provide limitations to the business around the purchasing of cloud solutions. CIOs must drive home that data must be kept in a certain format, for example, and that interfaces to the data comply with open industry standards, he says.
Blindly selecting SaaS vendors that don't provide access to your data is another mistake, says Bhatia. This creates problems when people want to do data analytics to optimise their business processes.
"Having access to your own data is key -- the only way you can make a data warehouse work is if you have data from disparate sources in the one location where you can make queries across systems," Bhatia says.
This was particularly important when Carsales was dealing with its secondary SMS provider.
"This provider implemented the same API as our primary provider had for us so our integration costs were minimal," Bhatia adds.
"The majority of work with SaaS applications is in integration. If you pick providers that make it hard to integrate for whatever reason, it could be technology or it could be they are too precious about how they want to do business."
Follow Byron Connolly on Twitter:@ByronConnolly