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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2010 Predictions - Wisdom of Crowds and the Cloud Community

Ryan Nichols

At the core, the power of cloud computing is the concept of shared infrastructure. Fitting that our 2010 predictions about cloud computing be powered by a shared infrastructure of a different sort-- the collective knowledge of Appirio employees and customers.

Think about how a prediction about the future (or any strategic decision, for that matter) is usually made-- by "experts" in a room with a whiteboard. Contrast that with how we come up with our predictions-- we canvas our team of nearly 200 cloud practitioners, on the ground as we speak, accelerating the adoption of cloud computing at hundreds of real-life customers. Our shared experience drives improved insight-- despite 2009's uncertainties, we think a CIO would have been well guided by our predictions last year. We were even more provocative in our predictions for 2010, but think that a compelling set of ideas rose to the top of the voting. Check out the full list here, but here's a summary:

2010 will be a year of maturity for the cloud, especially the business of cloud computing for the enterprise. We think that cloud providers will tackle the issue of lock-in, but will be too busy innovating to agree on any type of standards. We're bullish on cloud integration, but bearish on enterprise collaboration as a stand-alone category (it needs to be integrated). We expect Google to expand its enterprise footprint, and actually expect Microsoft to start letting Azure cannibalize its enterprise accounts. Overall, we think 2010 will be a year of consolidation among the vendors in the cloud ecosystem-- Oracle is likely to use this opportunity to buy their way into cloud computing. That's better than Accenture-- the most innovative thing we expect from them next year is a replacement for their Tiger Woods marketing campaign.

As interesting as these 10 predictions are the ideas that didn't rise to the top-- watch for a post next week on the more controversial ideas that didn't make the cut for our top 10 predictions.

So that's the collective wisdom of our team-- but why stop there? We've reopened the voting, and are inviting our customers, partners, and the cloud community at large to join in the conversation. Let us know what you think-- your perspective can only make us collectively smarter.

Also, why stop at using the community to make predictions about the cloud? Appirio has always been about tapping an extended set of resources to actually accelerate the adoption of the cloud: We use a the global community of talent, including a fantastic offshore team in Jaipur, a network of independent cloud strategists, and a distributed base of employees in over 22 states (we're convinced we have the absolute best cloud talent in Montana, for example). But this is just the beginning. One of our predictions for 2010 is that the "Cloud developer community grows faster than open-source." Tapping the power of the community will be a powerful weapon to accelerate enterprise adoption of the cloud, one that we intend to take full advantage of.

After all, the cloud is powered by shared infrastructure. Why should the "human cloud" be any different?

2009 Predictions - Year in Review

This time last year, we put pen to whiteboard in an attempt to predict what 2009 would look like for enterprise adoption of the cloud. Needless to say, 2009 was a tough year for predictions (among other things).

We had no idea how deep the economic crisis would go, what the changing political atmosphere would mean for technology, or how traditional technology vendors would react to the pending disruption of their on-premise business.

Yet we were pleasantly surprised by the accuracy of many of our predictions - some of them deliberately provocative.

When we look back at the 10 predictions, we believe 7 of them turned out to be accurate. And we'd still stand by the all the remaining 3 - just not for 2009.

So as we polish our crystal ball and attempt to glance into 2010, we wanted to revisit last year's predictions:

1. The "cloud of clouds" expands but sees traction revolve around open platforms.
YES. The trend towards "connected clouds" certainly continued throughout 2009, with important announcements between Salesforce and Twitter, between Salesforce and Google, and with Google Secure Data Connect. Even LinkedIn, the ultimate "closed cloud" demonstrated a willingness to open up. The concept of a single cloud that can power the enterprise is dead - everyone acknowledges that a cloud of clouds will be required (with the possible exception of NetSuite).

2. At best, Microsoft Azure will be a better platform for Exchange.
YES. The market certainly saw very little from Azure this year - general availability was delayed until November's PDC event in Los Angeles. But Azure increasingly looks like it might be worth the wait - we liked what we saw at PDC and definitely see market demand for an enterprise-class PaaS that enterprises can use with existing development resources.

3. Google doubles down on the enterprise, enterprises return the favor by racing to Google Apps.
YES, but the race is a marathon, not a sprint. This week's decision by the City of LA to adopt Google Apps is a watershed moment, on par with Genentech's landmark decision to adopt Google Apps last year. Google now reports 2M organizations paying for Google Apps, with 3,000 new companies signing up every day. Of course, its not trivial for any company to switch to Google Apps, so the rate of adoption has not been as quick as we'd initially expected. However, with companies like Valeo (38,000 users), Motorola (20,000 users), and Johnson Diversey (14,000 users) going Google in 2009, there's no question that large enterprise are making the move and this is only the beginning.

4. A major SaaS 1.0 company will fail.
YES. We look at the acquisition and inevitable sunsetting of Quickarrow and Open Air by Netsuite as the perfect example of how hard it is to offer a standalone, silo'd SaaS solution. The investment required is massive, and customers are demanding integrated offerings. Building on cloud platforms, such as Force.com or Google App Engine, is clearly a far more efficient and powerful way to build SaaS applications than the traditional approach of building your own multi-tenant stack.

5. A rise in serverless companies with 1000+ employees.
NO, so far. We haven't seen evidence of this trend, although clearly its just a matter of time. We'd love to be proven wrong - if you are operating a company of more than 200 people and run your business entirely on cloud platforms, let us know at cloud@appirio.com.

6. The rise and fall of the private cloud.
NO, so far. We've certainly seen the rise in hype around private clouds, and even consensus among the analysts that expectations for the benefits of building a private cloud should be tempered. But to date, the market doesn't seem to have realized that the private cloud is just a data center with a fancy name.

7. Business Intelligence (BI) becomes the next functional area to SaaSify.
NO. We were just too early on this one - in fact, one of the leading on-demand BI companies has disappeared, and we haven't seen much traction from the others. BI as a service is tough - there are huge and specialized infrastructure requirements and cloud platforms aren't yet ready to support such a data-intensive application. But the market is ripe for a reinvention of the entire BI category for the cloud-based enterprise.

8. SAP or Oracle gets into the PaaS game.
YES. SAP's Influencer Summit in November made public what we've suspected for a while - that Business ByDesign is not just a SaaS application, but SAP's attempt to launch an on-demand platform. As next year's releases of ByDesign incorporate multi-tenancy and extensibility, it has the potential to raise the bar for what we might legitimately call "PaaS."

9. Enterprises will figure out how to use social networks in the right way.
YES. Companies such as Avon, Starbucks and Comcast have all shown the impact social networks can have, even within traditional businesses. Avon and Starbucks have used social networks such as Facebook to broaden their reach and Comcast has used social networks to respond more quickly to customer issues. The common thread across these three innovators was combining the use of social networks with enterprise applications to manage and measure the impact.

10. There will be at least one $100M software product built on Force.com.
YES, although only because we predicted the potential for a $100M run rate. 2009 saw the launch of FinancialForce and our own PS Enterprise. Both products clearly address huge market opportunities, financials and services management respectively, and are already seeing traction in the market. Not only that but traditional software vendors also committed to Force.com, with both BMC and CA jumping into the game. There's little doubt that the next generation of applications, whether built by innovative startups or the establishment, will be built on cloud platforms such as Force.com.

2009 was a year when cloud computing matured as an industry and became a contender in the enterprise IT landscape. 2010 promises to be even more exciting. Watch for our 2010 predictions tomorrow!

Update: Appirio's 2010 predictions can be found here

Dreamforce 2009: What We'll Remember

Dreamforce 2009 was a super exciting event, not only for us, but for an entire industry.  19,000 people descended upon Moscone Center in San Francisco and brought an infectious energy to the place that even noted curmudgeons like Dennis Howlett couldn't help but be swept along with.  It's a tremendous vote of confidence for cloud computing that Salesforce was able to almost double attendance from last year in a climate when most conferences are excited to be at 60-70% of where they were in years past.  There's no doubt that cloud computing is past the tipping in the enterprise and the number of fantastic conversations we had only reinforced that for us.

Salesforce announced a lot of exciting things at the conference including major enhancements to the Sales and Service Clouds and most significantly, Chatter.  Now that we've had a few weeks to reflect on the event, we'd like to share our top 3 highlights from Dreamforce 2009:

1) The launch of Chatter: It was truly exciting to see Salesforce's emerging vision for enterprise apps with the launch of Chatter.  We have long believed that there's a lot to be gained from connecting enterprise apps with the way people communicate and collaborate, but Chatter goes far beyond that.  Some commentators have missed the point by making facile comparisons to Facebook and Twitter.

There are three things that make Chatter completely different than anything that has come before it.  First, Chatter brings the metaphors and user experience of the fastest growing collaboration platforms, Facebook and Twitter, to Enterprise apps.  Second, Chatter liberates data and insight that stayed imprisoned in enterprise apps by giving enterprise apps a way to communicate directly with the business user.  Third, since Chatter is a part of Force.com, every application that has ever been written on Force is automatically "chatter-ized".  (more in our post Chatter:Enterprise Apps Break their Long Silence)

2) Showing a real-life use case of Chatter on the big stage: While it was great to see the excitement in the audience when Chatter was announced on Day 1, it was hard to beat the excitement of actually working with the Chatter toolkit, "chatter-izing" our own PS Enterprise app to create Social PS Enterprise, and showing it on stage with Marc Benioff.  In the case of professional services management, Chatter has the potential to take a primarily administrative application and turn it into one that is part of the way every consultant does their job.  We're excited about the possibilities!  (more in our post Chatter Matters: Adding Social Capabilities to Enterprise Apps)

3) Seeing our customers' success celebrated in 20+ sessions and the keynote: Appirio has helped over 150 enterprises adopt the cloud and each and every one of those stories is exciting to us.  This year at Dreamforce, it was amazing to see so many of our customers' successes celebrated.  Highlights included a keynote by Avon as well as sessions by Thomson Reuters, BMC, ACI, Qualcomm, Genentech, Starbucks, Innovapost, TransUnion, Perceptive Software, Rehabcare, Convio, and many more. (more on Dreamforce Central)

On a lighter note, our cloud computing video contest was a huge hit and the winning Cloud Computing rap was hilarious.

Conclusion

Dreamforce 2009 demonstrated the industry shift toward cloud computing and the excitement it's generating for enterprise customers and ISVs (even huge ones such as BMC and CA).  The launch of Chatter as part of the platform is not only exciting in itself but makes a strong case for why people are excited.  In no other form of computing is innovation happening at the same rate, and even in the rare cases where it is, it's certainly not free or easy to absorb the innovation.  The best advice we can give enterprises is that if you aren't yet evaluating the cloud, there's no time like the present to get started!

Enterprise SaaS Working Group: Identity Management in the Cloud

Ryan Nichols

We were flattered to participate in today's Enterprise SaaS Working Group session on Identity Management in the cloud, with Chris Bedi from Verisign, Peter Dapkus from Salesforce.com, Steve Coplan from the 451 Group, Scott Bils from Conformity, Michael Amend from Dell, Doug Harr from Ingres, and Scott Carruth from Initiate. It was a great discussion-- you can catch a replay here.

Scott Bils did a great job of laying out the identity and access issues that SaaS applications create in the enterprise. These challenges are real-- a big part of what we do at Appirio as we help enterprises adopt cloud solutions is figure out how to incorporate SaaS identity into the overall enterprise access and identify framework (Here's a post from our own Jeff Douglas describing one approach we've used at Appirio to solve this problem).

Given these issues, Scott posed a question to the panel: Are SaaS identity issues a speed bump or a show stopper in the enterprise?

The consensus of the panel seemed to be that these issues are much more of a speed bump than a show stopper. But Doug Harr, the CIO of Ingres, pointed out that cloud identity is as much of an opportunity as it is a problem. We wanted to dig into that here-- let's talk about how identity issues have the potential to actually accelerate the adoption of SaaS over time.

We've all seen identity issues be an albatross for enterprise IT for as long as there's been more than 1 system in the data center-- so SaaS isn't creating this problem, but it DOES offer a new way out.

This is an opportunity to rethink what identity means in an open, standards-based, multi-tenant environment. Let's think about what's different:

• Not just systems identity and access -- with platform capabilities like Salesforce Chatter, you have a much richer, integrated, sense of who someone is from a business perspective
• Not just employees-- you have the potential to understand and manage identity and access for customers and partners as well
• Not even just your enterprise-- you have the potential to manage identity across trusted providers throughout a supply chain

Most importantly, its not just your problem as a CIO-- identity becomes something that a community of cloud providers can solve. When you move an application to a cloud platform, you'll just inherit an identity solution. That's something we see already within platforms-- that's one reason to move a 2nd or 3rd app to force.com or google app engine, for example -- and one that we'll increasingly see across platforms as well.

And we've seen this before: customization used to be a "show stopper" for SaaS, now its an accelerator. We're seeing the same thing with security. Identity will be next. Think about how much the concept of identity has changed in the consumer world, now that I use my google, facebook, or twitter account to identify myself to hundreds of websites. When, and how, will this cross over to the enterprise?

Look at a start-up like Appirio-- we had a chance to white-sheet the identity problem when we decided to run our operations as a serverless enterprise (our entire business runs on Salesforce, Google, and other cloud applications). That gave us a chance to rethink what it means to have a corporate directory. Part of the new "directory" for our employees is in Salesforce, where we track our organizational structure, roles and profiles. Part of it is in Google Apps-- the key to your identity at Appirio is your email address. This actually puts Google in an interesting spot as the potential center of a federated enterprise identity, and they're moving in that direction with the concept of a public and private Google profile, and their support for Open ID and OAuth.

Are our enterprise customers ready for this today? Not yet. But as cloud platforms incorporate a rich, open, federated identity model, identity and access becomes a reason TO move more of your infrastructure to the cloud.