Force.com
How To Move Your Business To The Cloud
Mar 5th
Tips for evaluating and implementing cloud computing technologies.
How in the world does a chief information officer or information technology professional cope with the challenge of delivering solutions for the second decade of the 21st century when they are saddled with 1980s technology?
Add the issues surrounding reduced budgets and the ongoing knock on IT workers–that they do not respond in a timely manner to changes in business–and you have the setting for change. Both in how IT delivers solutions and how IT needs to change itself.
The good news is that for once in almost 30 years, software is changing. No longer are you stuck with simply new features using outdated technology. You now have an alternative technology solution. The historical technology providers are, of course, trying to maintain their hold on you and your budget dollars by marketing “internal clouds,” alliances that merge hardware and software stacks that imply “infrastructure to application” environments but totally miss the point and the benefit of cloud computing. But of course you would do this, too, as part of the innovator’s dilemma.
As a CIO, how does your company take advantage of this changing technology and business model called the cloud?
There are a few things to consider with cloud computing. First, a number of research firms suggest that cloud implementations can take up to 50% less time, and total cost of ownership can be up to 46% cheaper. Both of these are shown in numerous white papers provided by cloud solution providers, and for the most part are reflective of the power and benefits cloud computing can provide.
However, one caution: Should you need or require multiple integrations, go cautiously. Integrating cloud solutions to on-premise solutions still takes time. Although somewhat less expensive, it still can add to project costs. Also, ERP cloud providers have some perverse view that makes integrating their solutions with other necessary cloud solutions very difficult. This is still the throwback to the “old software model” where your vendor “knows best.” Key takeaway: As you get into cloud computing, make sure your vendors not only have robust application programming interfaces, but also that they have demonstrated those integrations with other vendors you may be considering.
Another consideration in cloud computing is the vendor’s openness regarding service-level agreements, disaster recovery and security. Even the larger providers have their outages, but they still deliver higher uptimes than your internal data centers. However, with newer vendors and providers, make sure they are invested in your SLA so it is not just a contract term.
Final consideration for you in exploring cloud computing solutions: customization. One of the key benefits of cloud computing is the ability to customize the solution to some degree. So you have the advantage of changing the cloud solution to your process and behavior; with on-premise solutions, you need to change your behavior to their process.
Cloud computing will change your internal business model. It allows you to significantly reduce your capital outlays for hardware and software.
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Cloud Computing Investing Ideas
Mar 2nd
“Cloud Computing” is a new buzzword (or is it buzzwords?). Everybody is talking about it and most people don’t understand it. I will try to review the current state of cloud computing from an investment perspective and possible future developments in the area.
IT expenses are huge in most companies. At least that’s what any manager (with some exception) will tell you. To reduce those expenses, companies have adopted various business practices: cutting the number of personnel (usually with disastrous consequences later), appointing MBAs as IT department managers, buying software packages instead of in-house development (not a bad idea) and, of course, outsourcing (with the whole spectrum of results, from awful to great). In most cases, IT costs have ignored all heroic efforts of managers and have continued to grow. They continue to grow for two reasons: IT does more work every year and most of the efforts of managers are counterproductive- they actually increase costs instead of cutting them.
Looks like managers see cloud computing as a great new way to cut IT costs. They are both right and wrong. They are right because when implemented properly, cloud computing can cut costs and/or increase productivity. They are wrong because there is no such thing as a free lunch and correct implementation still costs a lot of time, effort, and money.
In the news, especially investment news, there are three different IT developments which are lumped together under name of “cloud computing”. Below is a quick review of them.
Internal Cloud
Also called server farm, this is a new way of organizing computing infrastructure. Companies set up big server farms with thousands of individual servers. Servers belong to the company, although management might be outsourced. The biggest plus of internal clouds is the fact that all data is kept on company’s own hardware. Usual features of such farms include: virtualization, automatic computer management and virtual networking. I am not going to explain all these terms, there are enough explanations on the Web. The first server farms, as far as I know, were used by Web oriented companies, such as Amazon.com (AMZN), Yahoo! (YHOO), Ebay (EBAY) and Google (GOOG).
But for investors, the most interesting companies are those which provide hardware and software solutions for internal clouds. The biggest of them are: Dell (DELL), HP (HPQ), IBM (IBM), Cisco (CSCO), EMC (EMC) in hardware; and in software, Microsoft (MSFT), VmWare (VMW), Oracle (ORCL) (which is also a hardware vendor after buying Sun Microsystems). There are also a lot of smaller players, but judging by the latest earning report from Brocade (BRCD), competition is stiff and prospects are not certain.
External Cloud
If the idea of storing data on somebody else’s hardware doesn’t scare you, the cloud itself can be outsourced. Currently, Amazon, Google, Microsoft, AT&T (T) and a lot of smaller companies provide this kind of service. I think that Amazon and Google have an advantage here, both because they are better at managing relationships and have better hardware/software combinations. Microsoft’s policy of using exclusively the Windows operating system is a drag on performance, while Amazon’s and Google’s reliance on Linux is a plus. AT&T is at a disadvantage here as well, because its problems with customer service are not restricted to the mobile phones area.
The companies provide virtual machines to their customers, with the operating system of the customer’s choice. But Linux is a better base for virtualization than Windows. Unfortunately for investors, external cloud doesn’t look like a significant piece of business for any of these companies or any other big companies which might get into it. Possible candidates are IBM, Ebay, Yahoo!, Dell, HP, Oracle. Of specialized companies, I only found Rackspace Hosting (RAX) and Enomaly, which is not public (yet?). I don’t know if specialized companies have any chance inside of the herd of elephants, but Rackspace is on my watch list.
Software As a Service
I don’t really know why is it often called “cloud computing,” it has nothing in common with the other two. These are suites of applications provided to businesses online, usually through web browser interface. True, companies providing applications might use internal or even external computer clouds, but the business model is completely different.
From my point of view, this is a very interesting development. There is only one problem for the companies here: data is kept on devices which belong to a different company. But in this case, companies don’t need expensive IT departments to run the application. It’s not a big help to big companies, which use hundreds of different applications, including a lot of custom built. But for a small company, which needs less than a dozen applications, this is a very interesting proposition. Current competitors in this area: Salesforce.com (CRM), Oracle ORCL), Rightnow Technologies (RNOW).
Salesforce.com is a leader, and any independent company is a possible acquisition target for Oracle and SAP (SAP). There is a possibility that Microsoft might get into this business, using acquisitions or internal developments, but so far I don’t see any indication.
Of the above mentioned, software as a service is the most interesting investing area. I’m looking at Salesforce.com often, but the stratospheric P/E scares me every time. I might be wrong and the P/E might be justified. For internal clouds, software companies look like the best bet with VMW being the leader. I don’t see any investing possibilities in the external clouds yet. I am long GOOG for different reasons and I think that AMZN is a great company, for other reasons as well.
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List of Cloud Platforms, Providers, and Enablers 2010
Feb 25th
Here is another list of cloud players that we’ve come across…
Cloud computing infrastructure tech&solution provider:
- 3Tera – AppLogic grid OS used as cloud computing platform by service providers and enterprises
- Appistry – Cloud computing middleware - Enables easily scalable cloud computing in the enterprise.
- Cassatt – Cassatt Active Response platform enables administrators to set policies to power physical and virtual servers safely on and off and pool their computing resources.
- CloudHan - Cloud tech and infrastructure consultant, in China.
- CloudScale Networks – Cloud enabler. Currently in private ALPHA only
- Joyent – Cloud Infrastructure (Accelerators), and consulting for developers and enterprise.
- nScaled, Inc – Cloud related services such as Migrations, Deployment, Planning, Consulting
- Q-layer – provides software for data centers that enables cloud computing, support VSAN, VLAN, VPDC, currently support VMware ESX.
- Skytap – IaaS service optimized for QA, Training, Demo, and Ops Testing. Supports VMware, Xen hypervisors & Windows, Linux & Solaris OS guests.
- Webscale Solutions – IT Strategy and Consulting on Cloud computing. Specialize in ROI investigations of CC. a CC provider evaluation framework and Enterprise Cloud Roadmap development.
Cloud computing infrastructure provider:
- Agathon Group – Cloud provider. Services include highly available VPS, virtual private datacenters and ready-to-use LAMP stacks. Self-service ordering. Custom development and managed services available.
- Amazon Web Services – Amazon EC2/S3 (Hardware-a-a-S & Cloud Storage)
- CohesiveFT – CohesiveFT Elastic Server Factory – Webservice for assembling full application stacks (contextualization, custom apps, middleware, on top of base configs) with deployment to many virtual and cloud environs.
- ElasticHosts – UK-based instant, on-demand servers in the cloud
- Flexiscale – Another instant provisioner of web servers with some advanced features like auto-scaling coming soon.
- GoGrid – instant, on-demand servers offering “control in the cloud”. Deploy Windows/Linux servers via web-interface in minutes
- GridLayer – Cloud Provider. A service by Layered Technologies that delivers Virtual Private Datacenters and virtual private servers from grids of commodity servers
- LayeredTechnologies - Cloud Provider. provider of on-demand hosting and cloud and utility computing solutions through its brand GridLayer
- ReliaCloud – Deployed within a robust and resilient virtualization environment and architected to maximize uptime and performance. Free benefits include high availability, load balancing, robust APIs, and persistent servers.
- Mosso – Rackspace’s cloud hosting service
- Newservers – Instant provisioning of web servers either Windows or Linux
- Plura Processing – On-demand infrastructure for high-performance computing
Cloud computing Paas provider:
- Aptana Cloud – Elastic Elastic Application Cloud™ featuring fully stacked and integrated PHP app engines, Ajax/Jaxer app engines, and soon Ruby on Rails app engines — ready to use and ready to scale as you need it.
- Bungee Connect – Provides end to end tools and systems required to develop, deploy and host web applications (Platform as a Service)
- Coherence – Oracle Coherence Data Grid for EC2 and other cloud platforms
- Force.com – Salesforce.com’s application development platform (PaaS)
- GigaSpaces – middleware for the cloud, “cloudware”
- Google AppEngine – (PaaS)Now support python
- Heroku – Ruby on Rails in their Cloud
- Morph Labs – Fully managed, open, elastically-scalable, end-to-end deployment and delivery platform for Ruby on Rails and Java (Jetty, JRuby, Groovy and Grails) web applications. Leverages AWS, but completely abstracts details and complexities from developers.
- Intuit Partner Platform (IPP) – Platform as a Service (PaaS) from Intuit.
- Qrimp – An AJAX based PaaS
- RightScale – RightScale provides a platform and expertise that enable companies to create scalable web applications running on Amazon’s Web Services that are reliable, easy to manage, and cost less
- Stax – Java Platform as a Service
Cloud computing based service provider:
- CAM Solutions – Monitoring-as-a-Service(TM)
- CloudStatus- CloudEnabler. Real-time performance trending of cloud infrastructure (currently AWS).
- DATASiSAR – Cloud Computing technology based consulting & IT Services provider
- Kaavo’s IMOD is an easy to use online application. Cloud Computing Made Easy.
- Microsoft Mesh
- Nasstar - SaaS provider. Business grade Hosted Desktop service, UK market leaders.
- Nirvanix – Cloud Storage
- TrustSaaS – uptime monitoring and alerting service (’SaaS Weather Report’) for Software as a Service (SaaS) run by an independent third party.
- UtilityStatus - Utility Computing Platform for SaaS charged in elapsed CPU time running on EC2.
Semantic computing Cloud service provider:
- ThoughtExpress – Generic Enterprise Management Service based in semantics supported by semantic computing cloud to perform enterprise information processing to deliver: BPM, BI, enterprise modelling & semantic human interface without the need to program.
Cloud Security Consultants and Overlay Network Providers
- CohesiveFT – CohesiveFT’s VPN-Cubed products are virtual firewallls, switches, hubs, and routers that are used to build overlay networks in clouds, across clouds, and to connect enterprise data centers to public clouds.
Cloud End-Points:
- XPack - a dedicated cloud end-point from Moderro Technologies. A solid-state, power-saving, VESA mountable desktop appliance with custom desktop environment designed for web applications.
Related posts
Force.com – Huge 4Q profit on big sales jump
Feb 25th
SAN FRANCISCO — Salesforce.com on Wednesday posted a 48 percent jump in fiscal fourth-quarter profit, on strong sales growth for its online business software applications.
For the three months ended Jan. 31, Salesforce.com said profit jumped to $20.4 million, or 16 cents per share, compared with $13.8 million, or 11 cents per share, in last year’s fourth quarter.
Revenue shot up 22 percent to $354 million, from $289.6 million a year ago.
Analysts polled by Thomson Reuters, on average, expected profit of 15 cents per share, on revenue of $342.3 million.
Chairman and CEO Marc Benioff said the company is benefiting from the move to cloud computing.
Cloud computing lets companies collaborate online and store data on outside servers, lowering the cost of maintaining their own computer systems.
For the fiscal year, the company earned $80.7 million, or 63 cents per share, on revenue of $1.31 billion. That compares with profit of $43.4 million, or 35 cents per share, on revenue of $1.08 billion last year.
The company said it added more than 17,000 new customers during the fiscal year, to about 72,500.
For the fiscal first quarter, the company expects earnings between 12 and 13 cents per share, on revenue between $365 million and $367 million.
Analysts call for profit of 18 cents per share, on revenue of $354.7 million. The earnings per share numbers, however, may not be comparable because of unusual items.
For the full fiscal year, Salesforce.com forecast earnings between 58 cents and 60 cents per share. It raised its revenue guidance to growth between 16 percent and 17 percent, from 15 to 16 percent. That implies a revenue forecast between $1.51 billion and $1.53 billion.
Wall Street expects profit of 82 cents per share on revenue of $1.51 billion for the fiscal year.
Salesforce.com shares wobbled in aftermarket electronic trading, falling immediately after the release before gaining $1.28 to $70.90. The stock closed regular trading up $1.20 at $69.44.
Related posts
BC’s Cloud Computing Ecosystem – a comprehensive list
Feb 25th
Cloud computing is here and it is real. It is helping businesses lower costs and be more agile. It is allowing startups to lower their setup costs and large enterprises to do R&D faster. It is being used by companies in financial services, pharmaceuticals and life sciences, media, and many others. And B.C. is developing a rich ecosystem of cloud computing companies that you may not know about yet.
For those unfamiliar with the term, cloud computing is the name given to the IT industry’s shift towards delivering IT as services. This is only another phase-shift, one of many that the computer industry has already experienced. Using mainframes as a starting point (which offered computing at the “center”), we then moved to minis, then PCs (computing at the edge), then client/server (computing moved back to the center), then the web (computing at both ends), server virtualization (abstracting the applications and software from the hardware underneath), and now automation and self-service.
What’s cloud and what isn’t?
There are a lot of debates about who fits where. For the purpose of this article, we have broken the industry down in a 3×3 grid as follows.
For layers, we have the following key three that are most often referenced in taxonomies of the market: applications; platforms; and infrastructure.
Applications contains those applications used by end-users, administrators, and managers. Platforms are the middleware that sits underneath the applications, often including things like security, management tools, databases, messaging, and servers. Infrastructure includes things such as core computing and storage resources and infrastructure management.
For types, we have broken this down into “Public”, “Hosted”, and “Private” – terms that are by no means adequate and which probably cause more misunderstanding these days but they’re commonly used so we’ll use them here.
This Public column is the one that is really “new” in the sense that it is different than what came before in the Hosted and Public columns. Sometimes it helps to think about a number of dimensions that make something column 1 or 2 or 3. In column 1, you find that apps, platforms, and infrastructure have been highly abstracted from hardware, they are offered as a service over the public internet, they are designed as “multi-tenant” services (one core code base under all users), often have publicly accessible APIs, are metered (if not billed by) usage, are often designed in a way that lets users provision themselves instantly and leave when they want. Some very well-known examples that fit well in column 1 are Salesforce.com, Google’s web-based Google Apps, Force.com (the development platform), Google’s App Engine (a deployment platform), and of course Amazon Web Services, the Rackspace Cloud, and now Microsoft Azure.
In the Hosted column, you find “On-Demand” applications from the big vendors. Often these are just applications hosted by the vendor with both a perpetual license fee and a separate hosting fee. Most of the time, it is the same application or platform stack as what you could install yourself locally on your own servers. I’ve included them here because people often ask “isn’t Hosted Exchange a cloud service?” Well, not if you want “Column 1″ cloud services. It’s a single-tenant, high cost-structure offering that does not pass any of the Column 1 tests.
In the Private column, we have placed those vendors who are building anything that would fit in the “Private cloud” category. If the vendor is just simply building apps, platforms, or infrastructure that is not and never will be used for delivery “as a service”, they have not been included here. Same with software so if there are applications that are used behind the firewall and that will never be delivered across the public internet, particularly in a multi-tenanted, “as a service” model, they were not included here.
So where are the opportunities?
With every major phase shift, a lot of things need to be rebuilt. When the industry moved to server virtualization, all of the major infrastructure tools had to be rebuilt. Out of that chaos, VMWare came from nowhere and gained 80% marketshare against its closest competitor Microsoft. And many small companies were born and did great things. That opportunity is now ahead of us again as all of the industry ecosystem is refactored once again. What is up for grabs? Everything: storage, computing, management, billing systems, security, cross-cloud management tools, SOA tools, databases and analytics systems, testing tools and deployment tools. It’s a complete ten year rebuild, just like the last cycle. Some stuff will move forward untouched but much of it has to be refactored.
B.C. Cloud Computing Ecosystem
Table 1 is the overview that shows how we have broken up the ecosystem.
Table 2 contains all of the detailed entries.
B.C. companies are hyperlinked.
Non-B.C. companies are in (brackets) for context purposes only.
If you would like to suggest additional companies, please do so here:
http://www.techvibes.com/blog/bcs-cloud-computing-ecosystem-a-comprehensive-list
Table 1: Overview
| Public |
Hosted |
Private |
|
| Applications |
Software as a service |
Hosted applications |
On Premise applications |
| Platforms |
Platform as a service |
Hosted Platforms |
On Premise Platforms |
| Infrastructure |
Infrastructure as a service |
Hosted Infrastructure |
Private Infrastructure |
Table 2: Detailed View
| Public |
Hosted |
Private |
|
|
Characteristics that are traditionally associated with each of the columns on the right –> |
- Vendor Managed - Automated - Multi-tenant - Web-Services - Hosted - Self-Serve - Subscription License - Pay for use - Instant Setup - Continual upgrades - IT = 2-3% of Rev. |
- Vendor Managed - Manual - Single-Tenant - Web Services? - Hosted - Vendor Served - Mixed License - Pay for time - Setup in Days - Big migrations - IT = 7-9% of Rev. |
- Self-Managed - Manual - Single-Tenant - Few Web Services - On Premise - Self-Serve - Perpetual License - Pay for everything - Setup in Weeks - Big migrations - IT = 7-9% of Rev. |
| APPLICATIONS |
Software as a service |
Hosted Apps |
Installed Apps |
| Mobile Payments |
Mobio |
||
| Social media content companies |
NowPublic |
||
| Social applications |
Wantsa Eqo |
||
| Social Networks |
Tyze (Facebook) |
||
| Social Media Client Tools |
Hootsuite |
||
| Gaming |
EcoBuddies FitBrains |
||
| Conferencing Tools |
Mingleverse Meeting Wizard |
||
|
File backup, sharing, access |
|
|
|
| Document collaboration |
(Google Docs) |
||
|
Email / Mgmt |
(Google Email) |
(Hosted Exchange) |
Exchange in-house |
| Document routing and workflow and approvals |
Recombo Vitrium |
||
|
Customer Relationship Mgmt (CRM) & Sales Force Automation (SFA) |
(Salesforce.com) |
|
(Goldmine ACT!) |
| Mobile functionality |
Tagga Quickmobile |
||
|
Marketing & PR Applications |
|
|
|
| Partner Relationship Management (PRM) |
PartnerPedia |
||
|
Service / Support / Help Desk |
|
|
|
|
Prof. Services Automation (PSA) and Project Management (PM) |
(Quick Arrow) |
||
|
HR Management (HRM) |
(Workday) |
|
|
| Municipal Applications |
BasicGov |
||
|
Spend & Expense Management |
|
|
|
| Online Research Software |
Vision Critical |
||
|
Business Intelligence & Reporting |
(Business Objects) (Pentaho) |
||
| Performance Management |
Visible Strategies |
||
|
Business apps – other |
|
|
|
| Database applications |
DabbleDB |
||
|
Large Data Set Analytics |
(Hadoop) |
(Hadoop) |
|
| Finance – Accounts Payable |
Beanbills |
||
|
Finance & Accounting |
|
|
|
| Energy & Resource Monitoring |
Pulse Energy Carbon Networks |
||
|
ERP-Other |
|
|
|
|
Security applications (end-user) |
|
||
|
IT Mgmt application |
|
|
|
|
Desktop as a service |
|
|
|
|
Application Marketplace |
|
|
|
| PLATFORMS |
Platform as a service |
Hosted Platforms |
Internal Platforms |
|
Platform Name |
(Force.com) (Microsoft Azure) |
|
|
| Ecommerce gateways, subscription billing |
Monexa |
Hyperwallet ElasticPath |
ElasticPath |
|
BPM |
|
|
|
| Policy compliance |
Colony Layer7 |
Layer7 | |
| Website Construction Platform |
Ubertor |
Sitemasher |
|
|
Business Framework |
|
|
|
|
UI framework |
|
|
|
|
Application Scripting |
|
|
|
| Video Streaming |
LiveCast |
LiveCast | |
|
Content Management |
|||
|
Site hosting |
|
|
|
|
Web Analytics |
|
|
|
|
Mobile Application Delivery |
|
|
|
|
Application Integration |
|
|
|
|
Developer Sandbox |
|
|
|
|
Application/Middleware Provisioning |
|
|
|
|
Deployment Tools |
|
|
|
|
Testing Tools |
|
|
|
|
Development Tools |
|||
|
Code Performance Analytics |
|
|
|
|
Stack creation tools |
|
|
|
|
App/Web Server |
|
|
|
|
Portal Server |
|
|
|
|
Cacheing Servers |
|
|
|
|
Database – Unstructured |
|
|
|
|
Database – Relational |
|
|
|
|
Database Synchronization |
|
|
|
|
Web Services / SOA tools |
|
||
|
Frameworks |
|
|
|
| Security – Spam control |
Mailchannels |
||
|
DNS Services |
|
|
|
|
Billing, Payment, Metering |
|
|
|
|
Telephony |
|
|
|
|
Security / Identity Mgmt |
|
||
|
Operating System |
|
|
|
| INFRASTRUCTURE |
Infrastructure as a service |
Hosted Infrastructure |
Internally hosted infrastructure |
|
Infrastructure Name |
(Force.com) (Amazon Web Services) (Rackspace Cloud) (Microsoft Azure) |
(Rackspace) |
(Microsoft Azure Internal Services) |
|
Inside to outside bridging |
|
|
|
|
Cross Systems Mgmt |
|
|
|
|
Automation/Provisioning Platform |
|
||
|
Virtuallization Platform |
|
|
|
|
Grid Mgmt |
|
|
|
|
VM App Perf. Monitoring |
|
|
|
|
Config Mgmt |
|
|
|
|
Monitoring Services |
|
|
|
|
Compute Services |
|
|
|
|
Messaging/Queuing Services |
|
|
|
|
Edge Storage – CDN |
|
||
| Mobile Network Optimization |
Mobidia |
||
|
Primary Storage |
|
(Netapp) |
|
|
Secondary Storage |
|
(Netapp) |
|
|
Storage Compression |
(Netapp) |
||
| Network Perf. Mgmt |
Colony | Vineyard Networks Apparent Networks |
|
|
Load Balancers |
|
|
|
|
Networking |
|
|
|
|
Firewalls |
|
|
|
Read more: http://www.techvibes.com/blog/bcs-cloud-computing-ecosystem-a-comprehensive-list#ixzz0gYXCbMKm
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Cloud Computing & Natural Monopolies
Feb 24th
Mike Kirkwood of ReadWriteWeb recently wrote a piece asking the question “Will One Company Become the Dominant Player in Cloud Computing?” Kirkwood offered a series of arguments both for and against the idea of the market being one where a “natural monopoly” might occur and a few of his arguments are worth exploring in greater depth.
Addressing the potential for vendor lock-in (think Outlook .PST files), Kirkwood points out that cloud customers may demand data portability:
If customers demand solutions where they can move from vendor to vendor freely, it will impact the landscape. Companies with cloud solutions in the marketplace could be required by these customers to remove barriers to moving data and services between different entities.
Kirkwood should know that this is already happening. CRM solutions like HighRise by 37Signals and cloud-based office solutions like Google Apps already have these features built in. One of the biggest reasons that many companies are moving to cloud-based applications is because they’re weary of being locked-in to solutions that hold their data hostage. It’s doubtful that these exit doors will disappear when things like office suites, CRMs, accounting software, and other software categories are almost exclusively offered as cloud applications or web apps. Customers already expect and will continue to demand the freedom to move their data around—a new culture of data portability is being created as a part of the shift to the cloud and that consumer expectations may be permanently altered because of it.
So long as data is portable, it seems doubtful that any vendor will be able to gain anything near a monopoly status through the use of tired proprietary software shenanigans. Huge capital expenses, like those associated with setting up an Exchange server and installing the latest version of Outlook on hundreds of desktop machines is also a thing of the past. The massive upfront costs are being replaced by cheap subscription models that easily scale as a firm’s need for a given sort of software grows. This means switching to a new vendor in the cloud involves little more than an export and important of data, followed by an email supplying co-workers with a new URL, username, and password.
The one area that Kirkwood doesn’t explore which may have some potential for a would-be monopolist is exploiting possible network effects—the idea that everyone uses brand X because everyone else uses brand X. This makes sense when you think of something like Facebook, where the sole value of the product is derived from the fact that a lot of people use it—otherwise why would anyone use the abysmal site? But does this sort of logic apply to accounting software? Would I choose to use something from Intuit instead of FreshBooks because my friends use it?
No, but I might choose a software titles because my potential employees are more likely to already be familiar with it and those potential hires might choose to learn one software title over another because employers are more likely to be using it. This is the kind of a snowball effect that could give one vendor an advantage that has nothing to do with the quality of their product.
But here too I see the culture of the emerging cloud applications market being a strong force against this kind of software/employee compatibility lock-in argument. Aside from wanting to flee the world of proprietary standards, expensive servers, in-house IT staff, client-side software, and other technological nightmares that come with so many non-cloud applications, companies are fleeing the world of terrible user interfaces. The cloud based-apps that I use—BaseCamp, HighRise, MailChimp, Google Apps, FormSpring, WuFoo, Mint, as well as many others—are all orders of magnitude less daunting and needlessly complex than something like the UX abomination that is the Microsoft Office suite. (Hint: If the “plain and simple” guide to your software runs 384 pages, you’re doing it wrong.)
Cloud software creators seem to actually care about user interface, somewhat negating the notion of user training related network effects—fostering what I will now officially dub “user portability.” Again, one could argue that when some software categories become predominantly cloud-based, and cloud software creators are not longer selling the concept of web software itself along with their specific services, that this emphasis on user interface could be phased out in favor of making more “ribbons.” But because of the new culture of data portability, user portability is likely to be maintained as well because bad user interfaces will be punished through losing customers to a better UX that is just a export, import, and quick staff-wide email away.
I’m really interested to hear my fellow TLFers and our readers’ thoughts on this issue. Is the cloud a near-perfect market or am I just a naive idealist who doesn’t see the vapory beginnings of a future cloud monopoly looming in the distance?
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The Cloud Collaboration Wars Ramp Up
Feb 22nd
Following a string of acquisitions, new product development and vendor chest pounding this year, the cloud collaboration wars are shaping up to be a key competitive battleground. Cloud computing providers are fortifying their positions, aiming to be one-stop shops for enterprises to shed internal infrastructure and move to online collaboration and communications. With this market focused heavily on software capabilities, and a healthy ecosystem of smaller players and startups filling in the gaps, watch this space carefully for more consolidation and acquisitions.
Cloud collaboration has now expanded beyond the core of e-mail communications to include social networking, group content creation and management, presentation sharing, project management, integrated voice and video, calendaring, scheduling and more. Let’s take a look at the big players and other possible entrants.
Microsoft
Microsoft is the undisputed legacy king of enterprise communications with its Exchange mail platform, which continues to hold ground in some part because so many users have been weaned on the Outlook interface. Now Microsoft has put its marketing muscle behind its Business Productivity Online suite which includes Exchange Online, SharePoint Online, Office Live Meeting, and Office Communications Online. Microsoft hosts these services, but sells them directly and through partners.
Anxious to defend its turf, the company has launched a competitor-focused website WhyMicrosoft.org WhyMicrosoft, which explicitly details the benefits of the Microsoft offering over IBM, Google Apps, OpenOffice, and interestingly, Cisco. The installed base, breadth of platform, and user-addiction factors are likely to favor Microsoft for the short term, but its leading position is by no means guaranteed.
IBM
In January, IBM hit the PR accelerator when it announced that Panasonic had chosen LotusLive, planning to eventually convert 380,000 employees to web-based mail. Claiming it as the industry’s largest cloud-computing contract, the deal gives IBM and LotusLive a renewed lease to play in the cloud collaboration space, and according to reports, also includes other online collaboration offerings such as calendars, web meetings, file sharing, and social networking. Few companies have the size and scope of IBM to help enterprises of this size manage these implementations worldwide, so expect to see IBM continue with global deals that wrap LotusLive into a giant package of outsourced IT services.
Perhaps the most exciting cloud collaboration offering from a product perspective is Google Apps, which includes Mail, Docs, Groups, Sites, and Video. While certainly lagging in some of the functionality delivered by Microsoft, Google continues to add new features at a blistering pace. The company has its own enterprise customer roster and has been actively promoting Google Apps through its Gone Google campaign.
While traditionalists claim that Google’s offerings lack the sophisticated capabilities of Exchange or Office, many see them as light years ahead on the collaboration side. Anyone who has jointly edited a Google Doc should be able to attest to that. And as the world seems to move away from the benefits of fancy font formatting to the speed and efficiency of easy sharing, Google might be in the best position to capitalize on the cloud collaboration race. But perhaps the dark horse is Google’s mobile strategy. Android and the NexusOne phone already appear to be more innovative than Windows Mobile competition, and the integration with Google Apps could dramatically accelerate business adoption.
VMware / Zimbra
VMware boldly entered the cloud collaboration race when it acquired Zimbra in January. Largely hidden within Yahoo! from its initial acquisition, Zimbra will now get the support needed to emerge on the grander stage. The Zimbra Collaboration Suite has one of the most interesting deployment models in the industry. By providing compatitibility with a variety of mail clients such as Outlook and Apple Mail, Zimbra leaps over the competition by eliminating the troublesome issue of asking users to give up their familiar mail program interfaces.
It should be noted, too, that the top three executives listed on the VMware leadership page have a combined 47 years of experience at Microsoft. These folks know how Microsoft profited from communications and collaboration products, and are likely to be in a good position to chip away at that market position.
Others
Without a formidable e-mail offering, many of the other collaboration players are relegated to fill in elsewhere. Oracle plans to develop Oracle Cloud Office following the OpenOffice aquisition through Sun to integrate desktop, web and mobile interaction. And Cisco will approach the market through its unified communications offerings and WebEx products.
Let’s also remember that collaboration habits are changing. As we move away from e-mail to other communications mechanisms like instant messaging, Facebook, and Twitter, perhaps the dominance of the e-mail core will evaporate. Salesforce.com is taking this approach with the introduction of Chatter, leapfrogging the e-mail playing field entirely to social communications.
Meanwhile, the open source and freeware worlds are waking up to the promise of online collaboration, and there are many free, standalone cloud collaboration products. We covered many useful ones here.
There is still a long road to hoe for many users to give up their affinity for Microsoft Outlook and Office. But it appears that now, more than ever, cloud collaboration could turn the tides toward a new slate of solutions. Full Source GigaOm
