Lost withOUT the Cloud - NY Times on Cloud Computing

Mark Tognetti

Recently Jonathan Zittrain, a law professor at Harvard, and the author of “The Future of the Internet — And How to Stop It” published an op ed piece “Lost in the Cloud” in the New York Times. The article was forwarded to me by a number of IT security colleagues along comments like “I told you that cloud computing is risky.” I’ve ordered Professor Zittrain’s book, ironically from Amazon, a cloud computing pioneer, to more fully explore his ideas. But in the meantime, let's take a look at the "real dangers" that Zittrain claims come with the cloud.

The typical fears: financial stability, security and data privacy in the cloud

In the article, Zittrain cites the typical fears about financial stability, security and data privacy and backs these up with examples about online subscription services going out of business, the recent hack of a Twitter employee’s account, the Feds abusing the authority granted by the Patriot Act and the admittedly egregious Internet monitoring by the Chinese government. Each of these examples has more nuance than suggested, and represent a phases of growth vs. being "showstoppers."

1) Financial stability/long-term viability of online services: My local newspaper or manufacturing company is just as much, if not more, at risk of going out of business (they just stopped printing a Monday edition) than a reputable cloud provider. Last check, iTunes and Google, are a safer bet. As with any business relationship, choose your partners carefully and have a backup plan... but don’t fail to act.

2) Security of online services: The Twitter hack was great example of user naivete about strong passwords, but any company that provides remote access to their internal systems would be equally vulnerable. In addition to teaching users how to make good password choices, options exist to improve login security via multi-factor authentication from companies like Ping Identity and MyOneLogin. What the cloud does is provide more transparency around "what is secure" across people, processes and technology. It also provides a better view of where risk lies so that companies can take the right actions. For security addressing only the subset you know about doesn't make things better - in this case ignorance is not bliss.

3) Data privacy: Without debating what constitutes appropriate governmental access to private data, it is fair to say that governments can overstep their bounds. I agree with Professor Zittrain that my data on the cloud should be afforded a degree of legal protection equivalent to my data stored in my house. As with any disruptive technology, the cloud will require adjusting (or perhaps rewriting) existing laws and regulations. His comments that “With a little effort and political will, we can solve these problems” certainly rings true. Cloud providers will need to develop corresponding capabilities to ensure compliance with the intent of regulations.

A more concerning fear: does the cloud really reduce our ability innovate?

The most concerning statement by Professor Zittrain is that the cloud puts “the freedom to innovate" at risk. His concern about the cloud is that “the vendor of a platform has much more control over whether and how to let others write new software”. His cited examples are Facebook and Apple. Perhaps SAP and Oracle would be his examples of inspiring innovation ?

I grew up with the PC revolution. I wrote my first line of code at 12 on an Apple II which my parents paid several thousand dollars to acquire. I worked within the limitations of 48KB RAM, 140KB floppy disk drives, and Apple BASIC (with the occasional peek in to 6502 Assembly to do the tricky stuff). Today, because of the cloud my 8-year-old son has virtually infinite access to compute power, languages, databases, open source tools, etc. for free or pennies to use. Not only does he have significantly greater freedom to innovate, he will be able to innovate much more rapidly than his old man, because the cloud has eliminated the burden of building, maintaining and understanding the infrastructure (hardware, operating system, etc.) required.

Professor Zittrain’s concern is that the market could settle in to a handful of “gated” cloud communities who control the availability of new code. He believes that software developers are writing “less adventurous, less subversive, less game-changing code under the watchful eyes of Facebook and Apple”. But, as Professor Zittrain himself cites, far less restrictive development environments exist in Amazon Web Services, Salesforce's Force.com, Google App Engine and Google Android to name just a few. Although the ecosystem of cloud providers will certainly evolve over the next decade, I cannot imagine that we will end up with a few “gated” providers that are anywhere close to the level of restriction imposed by today's enterprise software vendors and architectures. The Internet and the cloud change the drivers for the vendor - it still wouldn't be in their best interest to stifle innovation (as David Schatsky explains in his response to Professor Zittrain).

Our conclusion: the cloud will drive enterprise IT innovation

The ability to innovate has and will be lost without cloud. The contrast between consumer and business driven technology innovation over the last decade is a staggering proof point - online banking and trading, job search, finding where I am going and what to do, e-commerce, social networking and a score of other innovations ranging from mission critical to just fun have made it nearly impossible to remember how we survived pre-Internet. The cloud can bring that level of innovation and productivity to enterprise IT. After all, its hard to imagine my eight year old or anyone in the future workplace settling for less than the near infinite scale and freedom cloud computing.

NetSuite buys QuickArrow: Should we expect Oracle-style acquisition or a SaaS platform for small businesses?

Ryan Nichols

Yesterday's announcement of NetSuite's acquisition of QuickArrow was more significant than the $20M price tag would indicate, for anyone who follows cloud computing but especially for existing customers of QuickArrow and OpenAir, the other point SaaS app for Professional Services Automation (PSA) that NetSuite scooped up last year.

For the industry, this acquisition is a proof point for the power of on-demand platforms vs. silo'd SaaS applications. Building and maintaining a point SaaS application like PSA from the ground up is hard work. QuickArrow and OpenAir have poured tens of millions of dollars of VC funding into each and every level of their SaaS application stack... hardware and network infrastructure, database and application servers, and lots of horizontal application functionality like UI, analytics, and security. Contrast that with what we do here at Appirio - we're building a superior application for professional service firms with a fraction of the effort on the Force.com platform, because we're able to focus 100% of our development effort on the needs of professional service firms, and 0% on infrastructure. More from Appirio on that topic in the coming weeks.

But what about the existing customers of QuickArrow or OpenAir? They need to consider whether they should expect any better behavior from NetSuite than they've come to expect from their on-premise counterparts.... especially since NetSuite is partially owned by none other than Larry Ellison. NetSuite now has 3 different SaaS platforms to support professional service firms, with significant overlaps in functionality and fundamental differences in design. The question is whether we should expect NetSuite to take the low road and become an Oracle-like consolidator of SaaS applications, or whether NetSuite will invest what's required to become a cloud platform for small business.

Let's look at what the two alternatives mean for customers:

1. NetSuite does an Oracle-style roll-up: If this acquisition is mostly about acquiring customers and squeezing more dollars out of them over time, then NetSuite will be following the tried and true footsteps of Oracle. Expect little rationalization of this confusing portfolio. Instead, existing customers of QuickArrow and OpenAir should expect increasing pressure every quarter to pay more for the products they need and buy "bundled" products they don't need, and receive less and less innovation from their solution as the R&D teams of the acquired companies experience "synergy." A great deal for NetSuite, not so great for the customers of OpenAir and QuickArrow.
   
   
2. NetSuite assembles a SaaS platform for the small business: NetSuite also has the option to take the best-of-breed functionality from each of their existing solutions and build it into a new solution built on the same platform as NetSuite financials. This path will require more investment from NetSuite, but certainly has a more positive outcome for small services businesses that don't have an existing financial solution other than QuickBooks and are ready to make this sort of switch. Naturally, it will take NetSuite a while to get to this end state, and customers who want to take advantage of this functionality will have to perform a migration of their current, end-of-life PSA solution. But this approach will give NetSuite a compelling offering for small services firms just getting started building out their technology infrastructure.

Of course, many customers will lose in either of these scenarios - especially enterprise-class service organizations currently using QuickArrow. What does this acquisition mean for companies like Adobe, Advent, Borland, Genesys, Informatica, Software AG, and Symantec (all QuickArrow customers according to their website)? These are companies that run Oracle or SAP for their financials, not NetSuite. These are companies that are going to have to take a hard look at how they want to support the needs of their services teams going forward whether Zach Nelson follows in Larry Ellison's footsteps or not. Enterprise service companies are between a rock and a hard place.

If you fall into this category and are concerned about the affects of the QuickArrow and OpenAir acquisition on your professional services business, drop us a line. We'd love to show you what we're up to.

Learning from our customers - ThomasNet

Learning from our customers: ThomasNet's migration to the cloud

Inspired by what Marc Benioff said at Structure 09 last month, we've begun a new series on learning from our customers. We are kicking off the series with Brian Makas, Manager of Business Intelligence at ThomasNet. Brian helped ThomasNet move sales, marketing, support and recruiting to the cloud over the past few years. ThomasNet is the leading online industrial marketplace and business-building site connecting buyers and sellers worldwide.

Brian is a frequent speaker on marketing and cloud computing. He spoke at a marketing ROI panel at Dreamforce last year and also presented the ThomasNet story (with us) at a recent salesforce.com executive event in Falls Church, Virginia. In his spare time, Brian is an NHL and UFC fanatic. He shares his thoughts on all four of his interests (marketing, cloud computing, NHL and UFC) on Twitter (@brianmakas).

What problem was ThomasNet looking to solve that lead to using salesforce.com?

We had two very specific problems to address: managing existing prospects and distributing new leads. For prospect information, we used to print out massive book directories that were created once a year. These were then mailed out to regional sales representatives who used that information for the year. It was a nightmare, as we had no centralized place to store prospect information and of course the information would get stale pretty quickly. When it came to distributing new leads, our previous process was based around a "fire and forget" mentality - after we distributed a new lead to a sales representative we really had no way to enrich that record, that is to add more contacts, activity history, etc. that we might acquire after it was first sent out.

In order to solve these problems, we evaluated a number of CRM solutions and salesforce.com's solution had a strong functional fit. The fact that Salesforce is in the "Cloud" was more of an afterthought at the time, but turned out to be critical. We have an independent sales organization; worse than just not being on a single active directory, each office has their own preferences for what computers they use and how they set up their network. Not only would it have been complex and expensive to rollout an on-premise application but the burden of maintenance (especially with an application that needs to be upgraded several times a year) would have severely limited our ability to focus on actual business needs.

What were the results of the rollout?

Once we rolled out Salesforce, our prospect management and lead distribution processes changed completely. Salesforce gives us one place to maintain our prospect and customer information and track all our touch points with them. This is incredibly powerful because we're all working from the same information, can get a full view of the customer and can eliminate inefficient manual processes like our annual prospect book creation process. One very tangible example of this was something that happened recently. I needed to filter all our prospects by a specific set of criteria and get it out to our reps in each region. In the past, this
would've been an extensive process starting with collection of data from multiple different silos, to the development of numerous Excel sheets used to segment data by territory and ending with hundreds of emails flying around to the sales reps. With Salesforce, which already includes all of the relevant information, I was quickly able set the criteria and create reports by region that I could send directly our reps. What would've taken weeks took me hours - start to finish. Salesforce's reporting and built-in filtering capabilities are a lifesaver, in this and many other instances.

One of the interesting things that happened within our company is that the success we had with Salesforce in Sales and Marketing became infectious. Other departments saw how successful the Salesforce effort was and were begging to be a part of it. I've done my fair share of server-oriented programming in my career and I've never been part of a project that people begged to be a part of! We now use Salesforce across many of our core functions including: Sales and Marketing, Sales Resource Helpdesk, Telemarketing, Web Solutions and Recruiting.

As we've expanded our use of Salesforce internally at different departments, we're able to close the loop in terms of customer interactions: "Web2Lead" forms / Force.com Sites / Telemarketing / Helpdesk / Updates from the Editorial team ... Nearly every time a prospect or customer is touched by a member of the ThomasNet team, it's documented in Salesforce.

Salesforce has helped us generate a lot of savings but it also enables us to do things that we couldn't have done before. A great example of this the careers page that you guys built for us Without salesforce.com, we couldn't have built that careers page. Like most of us, our recruiting manager already has a full plate, the last thing he wanted was more work and managing content on a website certainly falls within that category. What really made http://careers.thomasnet.com a success is that is it is not only an applicant tracking system, but also a content management system. What this means is that as our recruiting manager manages current openings, the magic of Force.com Sites not only takes this structured data and auto-populates the website but the applications to those openings are automatically associated as well. With this detailed information, our qualified resume submissions went up 5X and it's transforming the way we recruit.

What has been your experience with Force.com, salesforce.com's platform for building custom applications?

In server-oriented programming, you always had to worry about scaling, it wasn’t enough to know what the initial audience was, you had to predict what the audience would look like several years down the road, before development even started. With salesforce.com’s software as a service (SaaS) offerings, we can focus on the business problems first, rather than worry about servers, hardware restrictions, databases and networks. This reduces our development time because we can start small and work more iteratively with the business. This alignment significantly reduces upfront costs and time-to-market.

In addition, we're almost “forced” into using best practices by using Force.com. When I previously approached business problems, I often found myself forced to treat each development request as its own distinct project, while this approach often met the stated needs of that project, it ended up putting both code and data into silos which didn’t meet business needs as a whole. With Force.com, while it will allow you to build silos and there’s very little you can’t do if you’re willing to bend the rules, there’s often a simple, point and click solution that meets most of your needs. The standardization on Force.com helps us define better solutions because we’re working with common development practices and a common set of business objects and workflows.

The other thing that's cool about a cloud platform like Force.com is that it's always improving and we get more and more new capabilities. It's not like older platforms where you have to upgrade to get the latest functionality or apply patches to get the latest security. With Force.com, we're always on the latest and greatest version.

My advice to anyone who's looked at salesforce.com and discounted it in the past is that you have to reevaluate it again. With the addition of APEX Code, Visualforce, Force.com Sites and more, the salesforce.com of a year or two ago is barely a shadow of what the Force.com platform is today.

Which applications would you say are best and least suited to the salesforce.com platform?

There are a number of areas that I think are particularly well suited to Salesforce. First off, Customer-facing processes are an obvious place to start. Applications or processes that you're currently using to interact with customers can typically be moved to Salesforce with great benefits. Sites has changed my philosophy about what Salesforce is suited for. Other than massive data processing, I'm not sure there's much it can't do. Any situation that requires an interaction between web and company data is now also a good fit, with the new Force.com Sites technology. Related to that, situations where you're collecting information from your users and displaying it back to them are also great fits for Salesforce, e.g., customer surveys, applicant forms, etc.

The only application that isn't particularly well-suited is large scale data processing. Salesforce is not a datawarehouse, or I should say, not yet anyway.

Please detail any unexpected benefits and challenges you came across during your implementation:

Unexpected benefits include how easy it was to expand Salesforce to different areas based on need - lots of synergy in terms of data and training, and automatic centralization of our key information. I also noticed synergy in our tool development, for example, a de-duplication tool we created for lead management worked seamlessly with our recruiting application as well.

In addition, salesforce.com's AppExchange has been a lifesaver, allowing us to take advantage of generic de-duplication tools and lead nurturing applications as packaged programs rather than trying to build our own custom apps.

Unexpected challenges were around the limitations we faced having to follow salesforce.com's development methodology since it's very structured. In the long run though, this challenge is minimized and far outweighed by the benefits realized via abiding to these structures.

What were the initial concerns upon your rollout?

First thing people are afraid of is a loss of control. There are also worries about downtime, but quite frankly, it's much less so than in a traditional IT environment. As much as I’d like to believe our IT department would respond to any problem 24/7/365, without a platform like Saleforce, it’s very rare to have that amount of support.

What would you recommend to those who are getting started with a transition to Salesforce?

(1) Getting started - You must have well-defined problems with well-defined defined solutions. Then you can move on to solving data management problems.

(2) Do the right things - Start small, pick a specific problem and solve it. Don't worry about how big it needs to be, with Salesforce, size and scalability aren’t issues. Don't over-engineer, keep adoption in mind as you move along.

Many thanks to Brian for a lively and insightful discussion. We're excited about many more of these and learning from you, our customers! If you'd like to be a part of this series, please leave a comment below or contact me directly.

Part II - Beware the Wolf in Blue Clothing

Narinder Singh

IBM's mixing metaphors in the cloud slows innovation and enterprise success with the cloud

In Part I of our blog we shared our thoughts on the debate between public and private clouds. Here we want to share what to expect when entrenched vendors muddy the waters in the cloud (and reissue our offer to a public webinar to debate the topic).

The Legacy Vendor Playbook
The effort for a giant to play catch up on cloud computing (or other disruptive technology innovation) normally involves three main components.

Step 1 - Name everything the same
Step 2 - Claim progress through standards
Step 3 - Build a few real, innovative solutions, but use them as a part of many existing strategies

All the while, the center of these organizations still sound like the advocates of the previous paradigms so insightfully described in Clayton Christensen's "Innovator's Dilemma."

Step 1 - Name everything the same
At one point IBM had more than a dozen (maybe 20+) products that were called DB2. SAP has similarly pulled everything into their suite whether integrated and relevant or not. This enables vendors to ensure that statements that their "product (e.g. DB2) can do X" is inevitably true.

Step 2 - Claim progress through standards
As we have noted before, a search for web services standards returns IBM as the top result with a page with over 30 WS* standards. On average a very small number of those standards are being used within enterprises to allow two systems from different vendors to inter-operate. The open cloud manifesto from IBM followed a similar pattern, it allowed them to jump closer to the center of the discussion around cloud computing without having a single proven offering related to it. The most proven demonstrable cloud innovations have come from vendors like Amazon, salesforce.com and Google. They have used proven web standards to promote interoperability without slowing innovation.

Step 3 - Build a few real, innovative solutions, but use them as a part of many existing strategies
IBM has the ability to and will deliver true, innovative, multi-tenant solutions. We have seen it before with other standards and areas of development. Yet rather than being disruptive, this innovation is cornered and primarily used to make less relevant, non-cloud based solutions appealing to enterprises and to demonstrate technology leadership in the market. Similarly, Microsoft will certainly provide interesting capabilities through Azure to allow existing .NET solutions to plug into cloud services. But their motivation is primarily to protect their investments, not their customers.

How should enterprises respond?
Now that we know what tens of millions of marketing dollars will promote, how should enterprises respond?

1. Use technology advancement from legacy vendors where it makes sense - as we mentioned, IBM (and others) will deliver some real innovation, and many of the technologies are applicable to helping you create a more efficient IT environment. In those scenarios, continue to explore offerings old and new to help reduce costs and increase flexibility. At the same time, expect incremental improvements to your current solutions - not giant leaps forward.

2. Don't believe the hype - it's one thing to use technologies where they make sense, its quite another to use them to accelerate your path towards the wrong destination. Continue to invest in exploring and deepening the understanding of the real cloud computing solutions and ecosystems (obviously we think salesforce.com, Google and Amazon are great starting points). Even if you are currently skeptical of (public) cloud computing, it will allow you to draw the right contrasts and clarify what is really different.

3. Use pure plays to increase knowledge, get real benefit and put pressure on legacy vendors - We have had many prospects and customers begin to explore public cloud
apps like Google simply to place pressure on their legacy vendors (Microsoft Exchange or Lotus Notes). In some cases, this resulted in dramatically lower renewal costs of those products; in others it led to a deeper understanding of and eventual selection of Google Apps. Either way, it's a clear benefit to the enterprise. And over time it inevitably increases the rate of adoption of the solutions delivering superior value (i.e. the cloud).

While legacy vendors take steps to participate in the next generation of technology, they will often do so while belittling it. SAP in the past weeks has simultaneously aggressively promoted the cloud and then deemed it mostly inadequate for enterprise solutions. To cut through this alternative approach to holding on to the past, enterprises can ask a few simple quations. Is the cloud more or less capable than it was three years ago in handing our needs; will it be more or less capable three years in the future of handling our needs? Regardless of your evaluation of where it stands today, answering these questions for yourself will indicate where you should invest going forward.