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.