Not many product development teams are using cloud-based solutions. At least not yet. Our research suggests that all may be about to change. We have found that teams who have moved at least partially to cloud-based product development are enjoying some significant advantages.
For example, teams who use cloud-based solutions were most likely to report being satisfied with their collaboration processes. In this post we’ll explore three vectors of performance for product development environments – collaboration, cost and business agility.
Engineering.com has recently published three reports on cloud computing as it relates to product development software.
- Collaboration Systems Use for Product Development
- Why Business Agility is Key to Product Development and How the Cloud Can Help
- Calculating the Total Cost of Product Development Solutions
Here we will provide a quick summary of the research findings. We encourage you to download the full reports.
Collaboration Systems for Product Development
Engineering.com gleaned a number of insights from 241 product development professionals about their use of collaboration systems, whether server-based, cloud-based or, in the case of 32 percent of respondents, no formal collaboration system at all. The majority of the product development teams (52 percent) reported relying on server-based collaboration systems while only 16 percent use a cloud-based system.
Product teams without a formal system were less satisfied with their collaboration processes, such as sharing data securely, gathering feedback quickly and remotely accessing data. In contrast, users of server-based collaboration systems were more satisfied than those without formal systems. Users of cloud-based systems were the most satisfied of all.
We also asked product development professionals about their ability to launch products on time. Those that reported the use of cloud-based collaboration systems believed they had a higher chance of launching products on time.
These are just a couple of highlights from the survey. It also covered how systems impacted:
- mobile access to projects
- ability of teams to innovate
- meeting cost targets
- organizational success, and more
To learn about these topics, read the full report Product Development Collaboration Systems and Satisfaction.
Agility in Product Development with the Cloud
“Business agility” is a term that has become closely associated with cloud computing. When speaking of business agility, people are typically referring to some of the following characteristics of their software platforms:
- Scalability: Instant project or company ramp-up can be performed with the cloud, including the ability to add new applications, services, or software features on-the-fly.
- Competitiveness: Quick deployment and instant access to resources mean a faster time to market for companies adopting the cloud.
- Profitability: Eliminating IT equipment and administrative expenses, a shift from high capital expenses to low operating expenditures, and a flexible, pay-as-you-go means lower total cost of ownership and financial risks.
- Innovation: Experimentation and collaboration, freeing up IT capital for other investment, and improvement in strategic planning and visibility made possible by the cloud results in greater innovation.
- Reactivity and Agility: Cloud computing results in more efficient use of scalable hardware and software, as well as the ability to perform tasks such as business analytics, rapid deployment and parallel batching enables market reactivity and agility.
- Sustainability: Cloud-centered companies may actually use fewer servers, less power and emit less carbon dioxide than those with on-premise solutions.
- Security: Cloud service providers may have greater security expertise and dedicated security resources than an in-house IT team.
Studies back up the claim that these characteristics of most cloud-based solutions extend to product development in the cloud. For instance, mobility was the primary reason respondents to Business Advantage’s “CAD in the Cloud 2017” survey gave for choosing cloud-based CAD software (8.1 on a scale of 1 to 10). Other reasons included: “ease of software updates (7.4); “improved collaboration” (7.0), “better scalability of computing power, storage, and memory” (6.9); and “being able to pay only for what we use” (6.7).
Other data that reinforces these ideas can be found in our white paper on the topic: Why Business Agility is Key to Product Development and How the Cloud Can Help.
Total Cost of Ownership for Cloud-Based Product Development
Cost has proven to be a prime driver for cloud adoption of product development tools. In our white paper Calculating the Total Cost of Product Development Solutions, we found that, depending on a variety of factors, cloud-based product development solutions may be less expensive than on-premise servers and software.
In the paper, we break down the total cost of ownership (TCO) associated with on-premise and cloud-based tools and found the following:
- Capital expenses: On-premise servers and software require purchasing the hardware, the networking infrastructure, and the software licenses, including a certain number of seats that may or may not be the exact number required for a project. Cloud-based solutions do not require the purchase of server-related hardware, but instead monthly subscription fees that can be increased or decreased depending on the number needed at any given time.
- Operating expenses: While on-premise solutions require continual upkeep, such as firewalls, a disaster recovery plan and utility costs, cloud-based tools do not.
- Indirect costs: When maintenance or upgrades are required, servers may need to go offline, resulting in lost productivity. Cloud solution providers, on the other hand, often promise continuous connectivity.
With these expenses in mind, we were able to cite a Hurwitz & Associates study that compared the costs incurred for both on-premise and cloud-based infrastructure for CRM and ERP. For companies with 100 users, the total expenses of installing and operating an on-premise system over four years was $1,400,570, almost twice that of a cloud computing solution, which totaled $697,656 over the same amount of time. The study did not cover product development tools specifically, but these numbers can provide insight into the cost of the cloud versus on-premise tools more generally.
To learn more about TCO and the cloud, read our white paper on the topic: Calculating the Total Cost of Product Development Solutions.
Whether to Use an On-Site Server or Cloud-Based Solution
Our research demonstrates that some system for product development is better than none and, in many cases, users of cloud-based tools are more satisfied and able to complete projects on time.
In many cases, cloud-based solutions may ultimately be less expensive in terms of upfront and on-going costs. Additionally, there are a number of factors related to agility that seem to be more applicable to cloud-based systems, such as collaboration, flexibility, scalability and mobility.
The decision as to which type of solution is best for a given business depends on a variety of factors. For instance, if the infrastructure is already in place for an on-premise server, that may be a determining factor to continue using a server-based system. The number of users and size of the business may also play a role.
Dassault Systèmes has sponsored this post. They have had no editorial input to this post. All opinions are mine. —Michael Molitch-Hou