It's still all the rage to talk about how cloud computing and software-as-a-service are forcing IT shops to become more strategic and define their value proposition in new ways. Most people in IT probably get the point by now, but it's always interesting to hear more about it from the finance side of things.  John Kogan, CEO of Proformative, presents his case for the inevitability of these emerging software models in a commentary at Forbes.

The main advantage of cloud computing is that companies can reduce capital and operating expenses when it comes to IT and align their IT spending more directly with utilization, Kogan writes. With SaaS, companies can forego the expenses of upfront licenses, server infrastructure, and customization. While much of this ground has been well-traveled by IT professionals, Kogan offers a couple interesting insights based on his discussions with executives who are on board with the new models.

While there remain differences in functionality provided by SaaS-based and traditional applications, the differences are less than they were even two years ago, Kogan maintains.  Companies are still concerned about data ownership and agreeable separation, but cloud services providers are taking these concerns into account, making them standard terms in SLAs. While large companies are remaining cautious about cloud computing and Saas, small and mid-sized businesses are adopting them quickly.

For more:
- see commentary by John Kogan at Forbes

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