When I was a kid, there was an incredibly stupid (but apparently memorable) ad campaign for Meineke mufflers, in which various characters stubbornly declared “I’m not gonna pay a lot for this muffler!”
I thought of that ad campaign while reading our recent case study on Egon Zehnder’s use of Socialtext.
Enterprise social software is supposed to be cheap. There’s open source, there are plenty of low-cost competitors, and there are hosted options. What Egon Zehnder discovered, however, was that a lot of these options–even the so-called “free” options–weren’t nearly as good as they first appeared. Here’s how EZI’s Bill Hopkins describes it:
“Once you factor in the total personnel cost of implementing and maintaining a Sharepoint or some other major piece of on-site infrastructure, the price gets a lot higher than just the software. We didn’t have budget for dedicated FTE’s we could devote to this project.”
Bill’s thinking immediately went to the possibility of a SaaS solution, but he was concerned that a traditional hosted solution was a non-starter for the Firm’s leadership.
“Security is incredibly important to us,” said Bill. “One of the reasons why our clients trust us is because they know we are utterly, fanatically discreet. Often the very fact that we’ve been engaged to fill a position would be front-page news if the papers found out about it. From an IT standpoint, that means our data must be completely secure. There was never any chance of letting our data leave the firewall. It just wasn’t going to happen.”
Bill has put his finger on a fundamental economic challenge for enterprise social software deployments. On the one hand, companies want the comfort and security of keeping their data inside the firewall. On the other hand, they’re concerned about the ongoing maintenance burden associated with traditional on-premise installations. This tension is particularly acute for mid-size companies, who have all the same confidentiality concerns as their larger competitors, but fewer IT resources to throw at the problem.
The good news is that, as Bill discovered at Egon Zehnder, a managed appliance provides the security of on-site deployment without the ongoing cost of maintaining a traditional on-site deployment. You can get your organization–your entire organization, not just a pilot group or two–quickly, easily, and without ongoing support burden. No fuss, no muss.
You’re not gonna pay a lot for this muffler.
Software Appliances were initially created for high performance network and security infrastructure with lower administration costs. Over time the Appliance model moved up the stack from email appliances to a diverse set of business applications. This trend has continued in parallel to the rise of SaaS and Cloud Computing. 
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