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Adopting a beta tool: Risks vs. rewards for a midsized enterprise

Putting beta software into production is a risk many organizations won't take -- but for those that do, the benefits can be great. Here's how to balance the risks and rewards.

Many IT shops shy away from adopting software that's still in beta because of risks such as product failure or a vendor that never makes it off the ground. But sometimes, those risks are worth the chance at beating competitors to new features, receiving one-on-one customer care and shaping a tool to better fit your needs.

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That was the case for Richard Navarro, who was looking to grow IT service and support on a stunted budget as IT director of the Jewish Home of San Francisco, a 900-employee nonprofit organization. He took a gamble with a beta tool for data center management, partly because the leading products were costly, lacking in overall integrated functionality and came with long implementation times.

"I already had to convince our CFO that we needed a more robust, integrated network tool -- not to mention one that was still in beta," said Navarro, who chose AccelOps, an all-in-one data center and IT service management software suite that was still in beta release. "The initial price and ROI were important in the decision-making process."

Navarro worked with AccelOps Inc. to reduce risk where he could, by obtaining high-level service agreements and solid response times -- all while implementing the core capabilities and functionalities that sold him on the product, from networking to security applications. And so far, so good.

Yet the risks of putting any beta product into production mode can be significant. Functionality you were counting on might not make the cut to the 1.0 finished product, or bugs and kinks in the beta version can make it unworkable. The low cost of the product can belie the time it will take you or your staff to get it running and provide feedback to the vendor.

Here, then, is a closer look at the possible rewards of choosing software that is still in beta and how to mitigate the risks that come with that decision.

The benefits of choosing a beta tool

Taking a risk on a beta tool can yield positive results and perhaps even offer a strategic advantage. Potential rewards include:

Increased innovation, lower costs. According to George Lawrie, a principal analyst at Forrester Research Inc., many CIOs are struggling to innovate given tight budgets. But as one of this year's buzzwords, innovation is still necessary to propel your organization forward.

Taking part in a beta test can give you early access to new software or features that aren't available to everyone, opening the door for competitive advantage at a much lower cost since beta testers usually get the tool at a reduced price.

And although the cost benefit may reduce significantly as you transition from a beta to a 1.0 release, participating in the beta-testing may provide you with future perks. "These may come in the form of lower-priced maintenance costs, a general price cut or some other financial benefit that could come along with being part of that initial run," said Michael Coté, a software industry analyst at Seattle-based open source analyst firm RedMonk. But, "make sure you touch upon all of this up front as part of your negotiations," he said.

The ability to influence the product itself. As the beta tester, you may have the opportunity to shape the functionality of the product or software. As you work with the tool and provide feedback to the vendor, express how the tool is meeting your expectations -- and where it's lacking. Help design a tool that makes your job easier. "The vendor will usually be very responsive to this feedback and if you're in a limited customer base, you'll get a lot of attention," Coté said.

Experience a lesser-known vendor without a big commitment. Even if you're already using a product from one a big vendor, don't close the door to beta-testing opportunities if you have the resources and bandwidth, Coté said, because it may be a chance for you to cut costs.

"If you're using an HP or an IBM product, look at the beta testing as a way to experiment with the product and see how it works in your organization," he said. "It may be the case that when it's all said and done, you could move to this new product and save yourself some money just by going with a smaller, lesser-known vendor."

And to protect against the risks of using a beta product …

Get the history of the product, including alpha test results. "Always ask for the complete set of alpha testing that went on," Lawrie said. Get the list of test conditions, the test data, the expected results and the actual results, he said. "Those initial tests can serve as evidence showing continual improvements."

A graph plotting the tests and the errors can also show where improvements were made and how the product is improving. "If you don't see errors dropping off or if they don't provide you with the initial test results, don't move forward," Lawrie said. "This is a red flag."

The vendor will usually be very responsive to this feedback and if you're in a limited customer base, you'll get a lot of attention.
Michael Coté
software industry analystRedMonk
Use beta tools for functions that aren't mission-critical. "Investing your time and resources into a tool that could take down critical areas of your business or lose you money is not the best place to play around with beta," Lawrie said. Analytics, resource allocation tools and schedulers have less risk and also have the potential for big rewards.

Make sure you understand your relationship with the vendor. "You don't want to go into a beta-testing situation if you don't feel that the vendor will be very attentive to your needs," said Dennis Drogseth, vice president of Enterprise Management Associates Inc., a Boulder, Colo.-based IT management research firm. Make sure you and your vendor have come to an acceptable service-level agreement on when and how bugs will be fixed.

Work out your end of the bargain. Is it a general usability test or a performance test? "Once you know what they want out of it, you have leverage to work out what you will get," Lawrie said. Understand what you are looking for and where particular areas of concern are.

Navarro said the tool, now out of beta, has met his expectations -- providing data center and IT service management capabilities cost-effectively and holistically.

"They maintained their end of the bargain and were very responsive, providing great customer service and support and an overall excellent product," Navarro said. "We had a very successful experience."

Let us know what you think about the story; email Kristen Caretta, Associate Editor, or follow her on Twitter @kcaretta.

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