Tech Pundit Dvorak: Do Not Trust Hosted Applications (He’s so wrong)

John Dvorak is a long time PC veteran and highly respected in the industry who writes in PC Magazine and other magazines about all things technology.
In a recent column in PC Magazine he makes a strong case for why businesses should NOT invest in hosted applications for their businesses.
His argument has merit – but he’s wrong. So wrong.
Industry pundits/writers/analysts are not always right. This is why it’s important to get more than one opinion before making technology decisions, especially major ones. But what separates pundits is the humility in some. (scroll below about pundits on humility)
What initiated John’s post was that the Windows server, Windows Genuine Advantage, that authenticates Microsoft software to ensure it’s not pirated software was down.
If you can’t authenticate Windows Vista, for example, or if Microsoft detects that its pirated software it won’t work until you re-authenticate that its not pirated.
John writes One aspect of the nightmare scenario should be discussed now. What kind of system is this, anyway? There should be no way that a legitimate user of a product should be suddenly cut off from use of that product because of an authentication server error, ever.
All this proves is that these Web-based applications cannot be trusted.

First of all, this was NOT a hosted application error per se, but a central server that was down. If your bank’s server goes down, your ATM would not work either or access to your online banking, or the teller machines – for example. If your local grocery stores computers were down, your cashier could not help you either.
The solution for Microsoft is to address what happens if an end user modifies their computer and Windows Genuine Advantage is triggered thinking it’s a pirated system. This is not a hosted application issue.
John writes This model is what Microsoft is moving towards. We are hounded by the notion that eventually we’ll all be using thin clients, and all the apps will be in the cloud. “I only use Google docs,” a friend of mine told me. “It’s as good as Word and easier to share files.”
Easier to share files? So how hard is it to attach a doc file to an e-mail anyway? Cripes.
And what happens if the system fails? The damage wouldn’t be too bad if you backed everything up, but then why use the online system in the first place?

John raises concerns that every small business owner should consider when evaluating a hosted application for their business. If the service provider’s data goes down, you can’t access your data.
However, software as a service (Saas) has been around for several years now and is a maturing industry. The few incidents of down time that do happen or no more than the incidents of data theft, car crashes, hard disk crashes or plane crashes.
Ridgely Evers, CEO and Founder of NetBooks (to be launched soon) writes:
John Dvorak makes some good points, but only by selectively ignoring the facts. If you assume (1) that you are the only individual who needs regular access to your data, and (2) that you back up religiously so that you have no exposure to hard-drive failure or accidental erasure or a ticked-off co-worker, then yes, there is no benefit to a hosted app and hosted data.
But if any of those three things isn’t true ó and especially if the value of what you’re doing is enhanced by having it used by or accessible to multiple users ó then you’ll need to have your data hosted on a server. And if you’re going to do that, then of course you’re going to follow best practices via access controls, continuous backup, etc. The enterprise has been doing this from the moment it could, because there is huge value in the multi-user environment.
SaaS simply puts that server in a datacenter, rather than in your facility. But if properly configured, that’s the safest place your data could possibly be. True, it adds an additional layer of access risk, in the form of the Internet rather than the local network. But barring a backhoe cutting your last-mile access (and even then you can just go to the nearest Starbucks), the Internet is actually far more resilient than a local network because it’s self-healing.

Tech Target has a nice overview of SaaS and writes “Our experience has been that the business unit has been the lead all along with SaaS,” said Mark Koenig, vice president of Saugatuck Technology Inc. in Westport, Conn. “Only recently has IT become involved once they realized the extent to which SaaS has penetrated enterprises, and they were faced with integration issues. Often it was the case for IT professionals that they were happy to allow business units to solve their own problems. That meant they could focus on larger enterprise problems. But integration is driving the issue.”
Jim Jeffcoat, recruiting director at Rexel Inc., a Dallas-based distributor of electrical and datacom components, was the lead buyer of a product from Taleo Corp., a Dublin, Calif.-based vendor of human resources management software delivered through the SaaS model.

When using Saas you need to do a few things:
1. Back up your data on a regular basis – OFF the hosted app to your local hard disk or server
2. Before using a service provider check out their references, history, credit rating and other due diligence you would do for any other partner.
Side note: There’s a lot of industry analysts/pundits around but there’s two things (well three) that separate them. 1. Their years of experience. 2. Their depth of knowledge and insight and 2. Their humility.
Robert Scoble, former Microsoft employee and now working for gave a presentation recently,that in four years Mahalo (human powered search engine), and other new social networking search engines would beat Google. He was so, so wrong as hundreds people told him so. He quickly acknowledged this and moved on. He’s got the experience, the knowledge and the humility.


About Ramon Ray

Ramon Ray, Marketing & Technology Evangelist, & Infusionsoft. Full bio at . Check him out on Google Plus, Twitter or Facebook

  • Tim Berry

    Thanks Ramon that’s a very useful summary.
    I do both online and off for tools I use and tools I publish. I think we need to add another variable into the discussion, something that your quote from Ridgely Evers gets to: Clearly its’ not one-size-fits-all on this issue. How many people share an app and how many locations are needed make a huge difference.
    Tim Berry