Google Campfire One: Enterprise apps get "Googled"

Enterprise apps get "Googled" with the Google Apps Marketplace and Gmail Contextual Gadgets
Ryan Nichols

Tonight, we were flattered to present on stage at Google Campfire, where Google announced the launch of the Google Apps Marketplace and a set of new integration points that transform Google Apps from a simple Exchange/Sharepoint replacement into a legitimate front-end for enterprise applications.

This is a natural evolution that we've been excited about for a while (see prediction #5 in our 2010 predictions). Knowledge workers spend the majority of their day in email. Why not bring enterprise functionality to that environment, rather than continue a 30 year quest by enterprise application vendors to alter the way people work?

This is one of those things that's "just different" when you run your entire business in the cloud-- the on-premise guys have tried (and failed) to solve this problem for years. Seeing Google turn Apps into an extensible platform to bring together dozens of different cloud applications finally makes it possible to bring together solutions for business and solutions for business people. It's not just about saving clicks-- bringing these 2 worlds together helps people make better decisions as they work.

Take PS Connect, our new extension to Appirio's Force.com-based services management application, Professional Service Enterprise. Tonight at Campfire, we showed how this extension will change the way we work here at Appirio, and why we're so excited to bring this innovation to to customers like Universal Mind, who are participating in our beta program.

We're using PS Connect for our own business first. Appirio runs our entire business on cloud-based applications, including Salesforce CRM and PS Enterprise. We use these applications to manage the core pillars of our business-- our people, our projects, and of course our customers and financials. We have many employees who spend all day in these core business applications, including our operational staff. These applications are powerful, and easy to use...contrast the new Salesforce UI with the 4 digit transaction codes still used by most SAP customers!

But most employees aren't in these applications very often, despite the fact that there is information in these systems that is critical to their ability to do their day-to-day jobs. These employees spend the majority of their day in email. After all, we're in a people business, and most collaboration still happens in email.

That's why PS Connect is so powerful-- it brings these 2 worlds together. When I get an email in my Gmail inbox, PS Connect is triggered. Based on who an email is from and who it is to, PS Connect brings together the relevant business information required to respond, right at the bottom of the message. If I get an email from a prospect, PS Connect shows me the status of all the related opportunities so that I can do my part to push a deal forward. If I get an email from a customer, PS Connect shows me the ongoing projects, the current status, notes from the project manager.... even information about the remaining project budget to help me make the right decisions about the project.

Will this be more convenient? Sure. But more importantly, this will improve the way people work. Are enterprise apps about to get "Googled"? We certainly hope so. Learn more about PS Connect here, or click here to learn more about our beta program.

Microsoft is "All In" With the Cloud. Let's Talk Winners and Losers.

Glenn Weinstein, CTO
In 1995, Bill Gates issued a famous internal memo that changed Microsoft, and an industry. He transformed from skeptic to advocate of how the Internet would change everything. In his memo he wrote: "I want to make clear that our focus on the Internet is critical to every part of our business."

Last Friday, Steve Ballmer has had his "Gates moment" by embracing the notion of the public cloud, and established for Microsoft the clearest cloud strategy of any of the big four of business software - "We're all In" - "When it comes to the cloud, we are all in. We are all in across every product line we have and across every dimension of the cloud."

While Microsoft still needs to execute in alignment with this vision (to be clear, some already are raising doubts - and even now, 15 years later, Microsoft is still trying to execute on the 1995 memo), there is no doubt that Ballmer's speech is a clear and significant signal that times have changed. The ramifications of the strategy are dramatic for Microsoft, and for the entire industry.

Let's look at some of the potential winners and losers that may emerge from Microsoft's new direction.

Probable Losers: SAP, Oracle, and IBM - Thousands of pages of corporate strategy analysis have been written at SAP, IBM, and Oracle on "the cloud" and what it could mean to their customers, yet none have articulated any cogent strategies about what to do. It ranges from complexity and misdirection at SAP, to denial at Oracle, to attempts to freeze progress by IBM. But now, every prospect, customer, analyst, employee and partner will ask the big vendors to compare their cloud approach to Microsoft's.

Much of the focus to date around Microsoft's cloud strategy has been to frame it in competition to Google, but the bigger story is that Microsoft now has the ideal platform to effectively claim market share and attack $50 billion or more in revenue from their largest enterprise software competitors. Microsoft seems to have made the realization several years ago, as various initiatives coalesced around what has now become Windows Azure, that far from cannibalizing server software sales, public cloud computing subscription sales could drive net revenue growth. Microsoft's leadership in this area is now clearly ahead of SAP, Oracle, and IBM. A clear target and a multi-year head start make a fundamental switch in the business model seems less risky.

Losers: The Big Legacy SIs - Accenture still may think the Tiger Woods fiasco was as bad as it gets, but Microsoft's new direction could completely change the economic structure on top of which the global SIs have spent the last thirty years building their businesses. Even with Avanade - its joint venture with Microsoft - Accenture, along with IBM Global Services, EDS (now HP), and other legacy GSIs, face a future where cloud providers are delivering answers, at a much lower cost, to an ever-growing domain of IT problems that SIs have historically solved.

The hardware, operating systems, networks, databases, and application software that companies had to purchase, configure, maintain, upgrade and eventually replace, ad infinitum, are becoming the responsibility of the public cloud providers - now, significantly, including Microsoft. This macro-trend will impact virtually every segment of the hardware and software markets. But because personnel costs represent such a significant portion of the cost of IT operations, Microsoft's cloud direction will drive huge costs out of enterprise IT largely at the expense of the global SIs.

One clear illustration of this phenomenon can be seen by comparing traditional IT outsourcing with "cloudsourcing." Global SIs are good at traditional outsourcing because they have mastered the core competencies of managing server farms and operating complex single-instance enterprise software. But these competencies become irrelevant to companies looking to offload their IT operations to multi-tenant cloud providers. Customers now need new types of services that the global SIs not only have no experience delivering, they are actually strongly disincented economically from pursuing them aggressively, for fear of cannibalizing their existing revenue streams.

Winners: Cloud Customers - In this blog, Appirio has written often on the benefits of real cloud computing and the risks of pseudo-cloud strategies. An endorsement of this vision by the biggest on-premise software company in the world will surely amplify the attention customers will put on placing the public cloud at the center of their IT strategy. Customers win because it will lead to faster adoption of the cloud - which we firmly believe is a positive, and ultimately inevitable, evolution. Business and IT leaders will expect more cloud-centric products and solutions, while the tactic of "cloudwashing" old offerings by merely hosting single-tenant software on remote servers will seem more glaringly insufficient. We expect this to accelerate a movement to the cloud that was already happening, shake out some cloud pretenders, and unleash lower costs and higher productivity.

Winner: Salesforce.com - Rising tides lift all boats. Salesforce.com benefits from Microsoft's endorsement of a cloud strategy that is aligned with what its CEO, Marc Benioff, has been advocating since 1999. While Microsoft is a formidable competitor, their entry will allow Salesforce.com broader access to the full IT market, including bastions of resistance that have clung to on-premise technology and hidden behind the big vendors. As the market increasingly dictates that the only IT battleground that matters is in the public cloud, it seems likely that all the software mega-vendors will look even harder at acquiring Salesforce.com in an effort to catch up to Microsoft.

Neutral: Google - Many of the same factors that make this positive for Salesforce.com apply to Google, which is the other vendor, aside from Salesforce.com, most strongly associated with enterprise public cloud computing today. But Google is more directly threatened by Microsoft, with whom they compete directly in a number of markets. Google's big differentiator, compared to Microsoft, has been its pure adherence to the public cloud model. Now, Microsoft's new direction places Google and Microsoft on the same side of the cloud vision ledger and changes the way we look at the competition between them. Instead of pitting the perception of an "old" company that's vested in desktop and server software vs. a "new" company that's all about the cloud, we now simply look to see which company can execute more effectively. Google's purity of vision, and its ability to deliver innovative solutions, have been the keys to the success of selling Google Apps to the enterprise. Now Google must contend with Microsoft's vast install base and its hard-won knowledge of how to pry open the pocketbooks of corporate IT. To do so, Google will have to create broader solutions.

As for Appirio, well, we are just incredibly excited. Since our founding in 2006, we have have been all in. We have shouted from the rooftops about the benefits of running your entire business in the cloud, and we've launched a new business and technology model - known as Cloudsourcing - to support that vision. Not only did we predict that it this has been coming, we believe cloud computing is our chance to join a once-in-a-generation revolution that advances how IT drives core business productivity. Welcome to the party, Microsoft. Who's next?

Making our PS Enterprise Social, e.g why private clouds can't share

Narinder Singh

After a round of expert and peer voting, Appirio was announced as one of four finalists and presenters for Cloud Connect 2010's Launch Pad event where we'll be showing off our soon-to-come Social PS Enterprise application. We've also had the opportunity to show off an early view of Social PS Enterprise to hundreds of customers at Salesforce's launch of Chatter last week, and their excitement makes it clear that social enterprise applications are going to change the way people work.

But a question that isn't often asked is how did PS Enterprise become social in the first place? The answer sheds a lot of light on the ongoing debate about the merits of building on public vs. private clouds.

Nearly eighteen months ago Appirio made a decision to build our PS Enterprise application on Force.com. We did it to build our application faster, get go-to-market leverage and take advantage of all the pre-built reporting, analytics, workflow, multi-language and platform capabilities inherent in Force.com (without needing to create these capabilities from scratch).

Now, with the introduction of Salesforce Chatter, we inherited - with almost no effort - a huge new category of social capabilities that is almost impossible for alternative solutions to add without a major engineering effort that may be larger than the entire rest of their application. Given the fact that our application is focused on managing people-based businesses, giving customers this level of collaboration capabilities at the flip of a switch is a huge differentiator for our product and could fundamentally change the Services Resource Planning category.

Inheriting these kinds of game changing capabilities would have been impossible if we had not created a solution on a true multi-tenant cloud platform.

That's the first thought that I had as I sat and listened to advocates of the private cloud at today's private cloud luncheon at the Pacific Crest Securities Emerging Technology Summit -the second was about how incumbent vendors always attempt change the definition of the next paradigm to match their historical businesses.

Private clouds by definition prevent sharing - no shared infrastructure, no shared innovation, just better in isolation. They can be cheaper and faster than today's data centers, which is very worthwhile. But call it what it is - an improved data center with the word cloud in its description. They don't offer the kind of dramatic change that our IT industry needs right now.

As an enterprise CIO, implementing a private cloud might allow you to improve current infrastructure operations. But public clouds can't change how you bring innovation to your business.

This week's excitement is about a new set of capabilities automatically enjoyed by all 70,000 of salesforce.com's customers and 700,000 customizations built on it. Imagine if all of your business applications could benefit from this type of innovation. Private clouds are a stepping stone - not a destination.

Welcome to our "serverless" party: Gartner Predicts 1 in 5 businesses will own no IT assets by 2012

Yamini Rangan

Gartner shocked many on-premise IT vendors recently by predicting that 20% of businesses will own no IT assets by 2012. We reached out to Leslie Fiering @ Gartner to swap notes-- it was a fascinating conversation: Gartner's prediction is based partly on the fact that cloud-based services and virtualization will become pervasive in the next few years. This does not mean the need for hardware will go away, it means the ownership of hardware will shift. It also means IT budgets will get re-allocated, IT personnel will need to get re-skilled and new IT buying points will emerge.

We agreed that most companies will go "serverless" before eventually becoming "hardwareless"-- moving your IT infrastructure to the cloud makes it easier to think about things like desktop virtualization. Helping companies go serverless has been our focus at Appirio for a while: we predicted in 2008 that there would be a rise in 1000+ person companies going completely serverless. That's how we run our own business-- we have a cloud-based IT infrastructure that supported a doubling of our team last year.

Going serverless is closer to reality than most realize. Companies like Google and Amazon have invested heavily in creating some of the world's most advanced data centers. Google, for example, is estimated to be among the top 5 whitebox server manufacturers globally - they are even working on data centers powered by wave farms! With these kinds of investments, innovation and scale, there's no doubt that the vast majority of businesses will fall far behind with their own data centers. A number of companies have been intrigued enough by the benefits we've enjoyed as a serverless company to investigate the idea for themselves. We're building business cases for several customers who want to "cloudsource" their entire IT infrastructure.

Its not really a question of IF businesses will become serverless, it is a question of WHEN. Today, if you are a start-up, there is no reason why you should buy servers, set up a datacenter or incur any type of capital expenditure in setting up your basic infrastructure. But for larger organizations, the question is how to build a business-case driven roadmap to get to that same end-state?

Our findings with early customers show that the benefits of moving to the cloud accelerate as more IT is moved to the cloud. Moving 100% of your IT infrastructure to the cloud creates 5-10x the benefits of just moving 50% of your infrastructure to the cloud. Entire categories of spend go away - no more VPN, Firewall, DMZ costs, no more rack space to build/rent, no more datacenter power and cooling costs. Gartner IT Spend and Staffing benchmarks (2009) indicate that a typical services organization spends 5.8% of their revenue on IT. Of that, nearly 18% of IT spend is on hardware. When you move 100% to the cloud, the hardware spend will drop practically to zero. Even after increased spend on cloud subscriptions, this frees up nearly 1% of your revenue for more strategic and innovative programs.

Also, going serverless makes you much more agile -- not having to deal with difficult integrations and customizations of on-premise infrastructure makes it possible for IT to move quickly and meet the needs of the business. So, the benefits certainly don't stop with cost savings -- there are significant revenue and efficiency benefits from moving 100% to the cloud (stay tuned, we will explore these benefits in the coming weeks)

Interested in learning more about the business case for moving 100% to the cloud? Send us an email at cloud@appirio.com. Or if you have ideas for our next piece of art to show the evolution to a hardwareless state, let us know! You could even win one of our popular Appirio Dreamforce T-shirts.


Yamini joined Appirio to launch a new line of business around Cloudsourcing. She came to us from SAP's Value Engineering team, and is working with our customers and prospects to build the business case for cloud computing.


Jamie Baines, a local San Francisco artist, created the sculpture you see here -- server cages going from the backbone of the enterprise to the backbone of a prehistoric beast.

California Needs the Cloud

Ryan Nichols
Last week, TechCrunch guest writer Vivek Wadhwa put out a call to action to California's entrepreneurs-- asking them to step up and "work their magic" to help the state overcome its technology problems, including an infamous $50M project to upgrade an antiquated check processing system that is keeping federal funds from reaching the state's unemployed. The Silicon Valley community responded with nearly 200 comments, and several entrepreneurs offered to do the entire project for 1/10th the cost and time.

The challenge is a familiar one-- nearly every public and private sector organization we work with has a multi-million dollar enterprise application project that is delayed, over budget, and out of date before go-live. And unfortunately, modern technology standards and entrepreneurial spunk are only part of the solution.

The real answer is to get our government agencies out of the business of managing their own commodity technology. The problem of managing outgoing payments is a well understood one, confronted by nearly every enterprise. The fact that nearly 500 thousand lines of COBOL code were written in 2009 alone to modernize this system is a sign that California is working at the wrong level of abstraction-- writing code instead of reusing it.

The state of California always needs rain, but this conversation makes it clearer than ever why California needs the "cloud." That's what Appirio would propose: we'd put this solution on cloud-based platform like Force.com. Why create frameworks for workflow, reporting, and UI from scratch? Why not build a solution that uses the shared, secure technology and application platform infrastructure trusted by tens of thousands of other companies?

Here are some examples of public agencies we've worked with to do exactly that:

• Japan Post: When Japan's largest employer (and the world's largest financial institution, by assets) needed to modernize its IT, they made the strategic decision to use Force.com as a core part of their go-forward architecture. They're rolling out application after application to nearly 100,000 users across Japan, moving 3-5X faster and savings millions in operating expense every year.
• A major ministry in Japan had a similar experience. They wanted to launch a consumer-facing rebate program. There wasn't the budget or the time to build this sort of application on their traditional IT architecture. Instead, we used the Force.com workflow engine to build out the registration process, and Google App Engine to handle the generation and emailing of PDF documents. The result? A campaign launched to 20 million consumers, built in weeks, not months.
  
• Cities of LA and DC: Email is another example of a common technology that our public instibtutions should get out of the business of managing. The City of DC made the switch in 2008-- their CTO, Vivek Khundra, is now the CTO of the Federal Government. Remember that old saying that "no one ever lost their job by choosing IBM?" Now that the city of LA has also made the switch, is it time to say the same about Google?

So given this track record, why isn't Appirio jumping in with an audacious bid of our own for this project? Well, because the concept of a waterfall development project is as antiquated as the idea of building this solution using on-premise technology. A waterfall is a waterfall, whether a $50M waterfall proposed by an incumbent firm or a $5M waterfall proposed by an aspiring entrepreneur. And California needs a cloud, not a waterfall.

So here's our offer, California State CIO, Teri Takai and CTO, P.K. Agarwal: a cloud-based prototyping session. Truly agile development is possible when you're building on cloud platforms, and we'd love to spend a day whiteboarding your problem to determine the best path forward. Before we finish, we'll show you a functional prototype, built on Force.com, and a business-case driven roadmap to put this application on the cloud. Is this a $1M problem, a $5M problem, or a $50M problem? The truth is that none of us know yet. But it's a sure bet that building on the cloud will prevent you from re-inventing the wheel.

Welcome to the next decade of cloud computing

Ryan Nichols

3 weeks into the new year, and we've seen a flurry of activity in the cloud ecosystem: Google entered the general files sharing business, in an important enhancement to Google Apps. IBM surprised the industry with what they're calling the "industry's largest cloud deployment" at Panasonic, and turned LotusLive into a platform. Microsoft and HP announced a broad partnership that included HP infrastructure for private clouds-- the closest thing we've seen from HP to a cloud strategy.

The pundits, of course, have already weighed in on what else the world should expect from cloud computing in 2010. Gartner calls cloud computing the most strategic technology for 2010, and predicts that 20% of all companies will go serverless, spending $150B on cloud technology by 2013. Others expect cloud outages and cloud malware. IDC expects a bridge between private and public clouds, others think the private cloud is nonsense. Infoword expects cloud standards and good things from Microsoft, others are bearish on both.

They can't all be right... What should thoughtful CIO's expect from cloud computing in the rest of 2010? To find out, Appirio organized a forecasting fisticuffs last week (you can hear a replay here)-- bringing together some VERY opinionated people on the hot topics around cloud computing: Dennis Howlett (Irregular Enterprise), Vinnie Mirchandani (deal architect), Phil Wainewright (Software as Services) and our own Narinder Singh.

The forecasts were flying:

• Phil on the private cloud: "I think the private cloud is a very dangerous delusion. Its something I've been warning people about for months. 2010 will be a year of disappointment for corporations following the private cloud. It's what I called 'fools cloud....' But I actually think that IBM and Microsoft have a fiduciary responsibility to their stakeholders to hold their customers back from the public cloud. They're going to make much more money on people trying to build their own private clouds. Why would they encourage customers to do something that hurts their bottom line?"
  
  
• Dennis on cloud standards: "We're living in wild west times. There don't appear to be many, if any, standards to protect people when things go wrong. We've got an golden opportunity to address the 's' in 'as-a-service.' I'm looking forward to 2010 being the year where these conversations start in earnest. Vendors will realize that this is a business challenge, not just a technology one."
  
  
• Vinnie on innovation: "In 2010, IaaS is going to come online in a massive way. When you look at what Microsoft has invested, its a mind-boggling degree of scale and efficiency. I think that SaaS vendors are going to come to the realization that they shouldn't be investing in their own infrastructure."
  
  
• Phil on PaaS: "Traditional ISVs like BMC are facing competition from SaaS-companies like ServiceNow. I'm wondering whether BMC can use a multi-tenant platform like Force.com to come back? Established vendors like PaaS because they can put their existing business logic on an established technology platform."
  

• Narinder on the role of startups: "Look at electricity: The guy who invented the waterwheel isn't the one who made public utilities happen. It's shocking how often that we assume the existing players will sustain themselves-- history has shown that it hardly ever happens. The likelihood is very high that out of Microsoft, Oracle, SAP, and IBM, at least one will be irrelevant by the end of the decade. The odds are stacked against them."

Two other fascinating topics: The first was security and risk, a topic all agreed is often misunderstood. "Security is often an excuse to say no," said Narinder, "Not a valid discussion of overall risk of a new environment vs. a legacy environment." Vinnie agreed: "Most on-premise shops are down 10-15 hours a week. What kind of SLA is that? But when a cloud vendor goes down for 15 minutes, its all over the evening news."

The second was data and benchmarks. "SaaS vendors are building incredibly valuable databases of business metrics," claimed Vinnie. "We don't even know what to do with these connections." Dennis agreed, arguing that there is more value in this data than in the applications themselves. The challenge is as much business as technology-- how can this data be harvested in a way that's consistent with the expectations of users.

So what will the world of cloud look like if even some of these predictions come true? One thing is for certain, the cloud is ready for mainstream enterprise adoption. Nicholas Carr famously compared the transition to cloud computing to the transition to public electric utilities. It took companies in the U.S. 50 years to move from generating 90 percent of their own electricity to consuming 90 percent from public utilities. Technology shifts happen even faster today. While it's not clear how long the shift to the cloud will take, it is clear that the time to get started is now.

Top 5 CIO's Guide to Cloud Computing Posts for 2009

As we get ready to end 2009, here’s a view into the top 5 blog posts our readers found most interesting:

5. Amazon VPC: Private Clouds aren't Clouds and Public Clouds aren't Public

August 26th - Amazon's announcement today on Virtual Private Clouds (VPC) and Werner Vogels' enthusiastic blog response have been used by advocates to validate positions for and against the notion of the "private cloud." We've been part of that debate ourselves (see Rise and Fall of the Private Cloud, Beware of the Wolf in Blue Clothing, and in a dialogue here with Christopher "Fire Hydrant" Hoff). While we strongly advocate technologies like virtualization, we're critical of the notion that a private cloud can be at the center of a future state IT strategy...

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4. Short the Global SIs

January 28th - In January of 2007, we published an article, Services 2.0, which highlighted the shifting sands in deploying SaaS solutions such as Salesforce.com, Google Enterprise and Amazon Web Services. Two years later, Global SIs such as Accenture, Cap Gemini, TCS and others are still shackled by their dependence on old-school, on-premise partnerships with SAP, Oracle & Microsoft. While they may be paying lip service to cloud computing, most offer SaaS-based solutions at 2-3X the total cost necessary, are nowhere to be found in the relevant communities and developer ecosystems, and have few true SaaS enterprise reference customers to speak of...

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3. Top 5 Things About This Year's Gartner Symposium

October 23rd - After spending 5 days talking technology with thousands of CIOs and some of the industry’s most insightful analysts, we thought we’d reflect on the top 5 and bottom 5 things about this year’s Gartner Symposium in Orlando, FL. Here’s our “Top 5” list, and the implications for enterprise CIOs...

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2. Do Your Most Strategic Apps Belong in the Cloud?

May 11th - I've been in a number of conversations over the past few weeks where I've been asked which business processes or apps belong in the cloud. There are obviously some technical considerations, but I'd like to focus on the strategic reasons for making the decision and how things have changed in the shift from traditional IT architectures to IT in the cloud...

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1. Cloud Computing Savings - Real or Imaginary?

April 16th - The venerable management consulting firm, McKinsey & Company, released a thought-provoking analysis yesterday on cloud computing economics. The piece has generated a fair bit of attention because it's been taken to mean that migration to cloud platforms is actually more expensive than what large companies currently spend on their own datacenters...

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