Moving Beyond the Theoretical at Cloud Connect

By Michelle Swan

Last week, Appirio presented at the Cloud Connect conference in Santa Clara, Calif. as one of the conference's four LaunchPad finalists. Overall, it was a well-attended, interesting event with lots of debate around the various definitions of cloud computing, the benefits of private vs. public clouds, and the evolution of cloud standards.

All of these are valuable conversations, but at some point, I was itching to get beyond the theoretics of the cloud and hear more from real enterprise customers who were already using cloud computing in their business. What had they done so far? What was the motivation pushing them forward? What were the barriers holding them back? That was about the time I walked into the panel - Enterprise Adoption of the Cloud - which featured practitioners and strategists from the likes of ING US, Boeing and Morningstar and Stratafusion (doing work with VMware) talking about their use of cloud computing. Full disclosure, Appirio has been involved with some of these customers, but that aside, I still found the conversation refreshing on many levels.

1. Although there was some theoretical debate in the panel, the bulk of the conversation focused on the practicalities of moving to the cloud. They discussed security, availability, licensing and such, but more importantly how they were getting beyond those issues with pilots, proof of concepts, partnering with cloud experts, or just making the leap.
2. This panel (finally) got beyond the Infrastructure-as-a-Service (IaaS) focus that dominated much of the show's agenda and talked about what the business was actually able to do on top of cloud environments. There was even consensus at the end that Platform-as-a-Service (PaaS) was where they were expecting major advances.
3. The benefits they pointed to weren't solely focused on lowering costs. Sure that was why many started on the path, but it was business agility and speed to market that ultimately prevailed. This is something Appirio hears from our own customers quite a bit.
4. Here were a group of senior IT professionals who were very candid about how cloud computing has changed their job, and the legacy thinking they still struggle with in their teams. It was enlightening to hear (and I quote) "gone are the days of a CIO coming in and building a new data center. Moving forward, we'll put a router in the corner, give everyone money for a laptop and rent everything else as a service." This fits well with Gartner's prediction earlier this year that 20% of all companies will own no IT assets by 2012, but nice to hear from large enterprises as well.

While it's important to have the kind of theoretical debate that dominates cloud computing events and coverage, it's even more important to hear the perspective of companies actually going down the cloud path. This is what will inform vendors like ourselves in our own offerings, and will help the space evolve.

On that note, we'd like to highlight a few customer case studies on this blog going forward. Respond here or tweet us @appirio to let us know if you're interested in telling your story more widely.

Keeping Up with the Cloud

Cisco, Carriers, and the FCC Invest in Broadband

Mark Koenig

Last week, in the middle of discussing cloud migration strategy with one of our clients, a Systems Director asked "If everyone is moving to the cloud eventually, won't the Internet come crawling to a stop?"

Well the conversation crawled to a stop long enough to remind me why - in an effort to try to slow cloud computing adoption - many cloud detractors (and I wouldn't count my smart client among them, he is just doing his due diligence) are predicting Internet traffic jams of major proportions. We tend to take high-speed broadband for granted today, but many of us have memories of the days not so very long ago when accessing the Internet could be an hours-long ordeal, and then when finally connected, the transfer speeds were really really really slow. No one wants to go back to those days, especially when it comes to critical business applications. Such predictions of doom and gloom can be very effective. Fortunately, its very unlikely that the detractors are correct.

Last week we observed that the the largest cloud solution providers are investing billions of dollars to build data centers to run their cloud-based applications. As it turns out, they are not the only ones investing in cloud computing: billions of dollars are being also invested to build the next generation Internet. This means that when we talk about who is going to help address this fundamental bridge to cloud computing, there are many involved. Let's look at three:

Cisco: Though many people yawned when their big game-changing announcement earlier this month turned out to be a router, Cisco's new CRS-3 Carrier Routing System is about as exciting as it gets when you are talking about plumbing. The new router is designed specifically to handle the additional demands of scale and load-balancing required by cloud computing. With regard to scale, consider that the CRS-3 has enough capacity (322-terabits) to handle simultaneous video calls by every person in China. And the router is designed to handle the type of multi-directional traffic generated by VOIP-enabled web conferencing and video chat, applications that are central to the success of collaboration services such as Cisco WebEx or Google Apps, which added video conferencing to its service this year.

Carriers: In 2008, with the purchase of billions of dollars of 700MHz of wireless spectrum, carriers - and in particular Verizon and AT&T, the big winners at the auction - began preparing for an exponential increase in data passing over their networks. Handling voice traffic has become a commodity, and in their search for growth, carriers see data transmission as the golden egg, which means applications are the goose. And that means that all the investment and innovation is designed to encourage the adoption of applications that will generate the data traffic for their network. Consumers and businesses should start reaping the rewards of this investment by the middle of 2011 as 4G network capabilities become available.

The Federal Government: On the same day I was meeting with my client, the US Federal Communications Commission was announcing its National Broadband Plan, which will pour $15.5 billion dollars over the next 10 years into broadband deployment across the country. Among the goals of the plan are to deliver 1-Gbps service to public institutions such as hospitals, schools and government buildings in every US community by 2020, and to implement 100 Megabits per second (Mbps) broadband connections in 100 million (out of an estimated 114 million) American households within the same time frame. Additionally, there are plans to auction additional wireless spectrum as early as the first half of 2011.

Considered together, the scale of investment in broadband capacity and access by these players means that cloud solution providers will be building innovative new applications and services for consumers and businesses alike, without fear of lack of access to these services. Further, it should be noted that this level of investment only focuses on the US market, and that many analysts believe the US is lagging infrastructure buildout overseas. Should the FCC make moves to improve competitiveness in the US market - the chief criticism of the National Broadband Plan by those who believe it does not go far enough - then we shall see even more investment and innovation in this area.

In short, it appears that there will be plenty of broadband to support the growth of cloud computing. At Appirio, we can't wait: we are building next generation applications for the next generation Internet now. And we are helping our clients map out their paths to the cloud.

How about you? Are concerns about broadband capacity slowing down your plans for cloud computing? Does the announcement of them National Broadband Plan mean you'll accelerate your investment in the cloud? Let us know in the comments below.

Introducing Dr. Cloud Strategy

Or: How I learned to stop worrying and love the cloud
Mark Koenig

As I start my new role working with the team to expand the cloud strategy practice here at Appirio, I wanted to share some thoughts on why I made the switch from the (sometimes) comfortable life of an analyst to the whirlwind world of a cloud computing start-up.

Over the last nine years, I helped build Saugatuck Technology into the leading market strategy consulting and industry analyst firm on SaaS, Cloud Computing and other disruptive technologies. At Saugatuck, I researched and wrote about the evolution of Cloud Computing. At first (this is 2003-2004 mind you) there was a huge expectation gap between what buyers wanted and what vendors said they could deliver. Over time however, that gap has closed, and regardless of what it is being called (pay-as-you-go IT, on demand, Software as a Service, cloud computing) it is clear that the cloud represents a new and powerful business model for the delivery of computing capabilities. Cloud Computing is having a game-changing impact up and down the stack, from applications to the platform layer and all the way through to infrastructure layer, which is why companies like Apple, Amazon, Google, Microsoft and salesforce.com are investing billions of dollars in state-of-the-art data centers and sophisticated application platforms. In short, Cloud Computing can no longer be dismissed as an SMB or a CRM phenomenon, and the impact of Cloud Computing goes beyond technology, enabling the formation of entire new businesses and industries.

At Saugatuck, I was briefed by the leading vendors driving this industry-wide disruption, from software startups who are capitalizing on the new and disruptive cloud-based business model to some legacy vendors who are now trying to catch up. These executives talked about their need for business partners who understood the business value of the cloud and who could help their customers get there - quickly and successfully.

I also had the opportunity to survey and speak with hundreds of senior business and IT executives about which applications solutions they were migrating to the cloud and why, and what they were doing to get there. Many were reluctant to begin, not knowing which solutions would be best to cut their teeth on; those that had begun talked about the challenges they faced when it came time to integrate the new cloud-based solution with their existing business processes and application architecture. They needed a cloud roadmap and business case to help them answer these questions and migrate to the cloud with confidence. Others - like this writer - expressed their fears and doubts about the readiness of the cloud for enterprise computing, only to admit in the end that cloud computing will be the dominant paradigm for enterprise IT in ten years time.

When I came across Appirio-- the pieces all came together. The prospect of helping companies move to the cloud at a next-generation cloud solution provider was too compelling to pass up. The four weeks since I joined Appirio have indeed been a whirlwind:

• our Social PS Enterprise product for the services industry has been named a Launchpad finalist at next week's CloudConnect conference,
• we debuted PS Connect, an extension to PS Enterprise that allows service professionals to run their business directly from their GMail inbox at the exclusive Google Campfire, and
• we were named one of America's "Most Promising Startups" by BusinessWeek magazine.

I'd like to think there is a cause-effect relationship between these events and my decision to join Appirio, but I know better. Instead, my contributions at Appirio will focus on building our Cloud Strategy Center of Excellence. I'll spend my time working closely with our clients and delivery teams so that we are ready to help CIOs answer the question that so many are being asked today: "What's our Cloud Strategy?" To answer this, some CIOs will need to build a business case for migrating to the cloud, others will need a detailed roadmap, and still others will require some combination of the two. But Cloud Strategy is more than that; it goes beyond whether an application is based on- or off-premise. If we allow our customers to get away with only asking that question, then we miss the chance to help them fully leverage the potential of the cloud. I have long believed that there is more to the cloud story than better, faster and cheaper. Of course, there is nothing wrong with better, faster and cheaper, but in a time when CIOs are being asked more and more to find ways to help drive revenue growth and faciilitate organizational transformation, Cloud Computing offers plenty of opportunities to help meet those objectives as well. Take for example, the accomplishments of Appirio customers ranging from Japan Post to Author Solutions, all of whom have built game-changing and transformative solutions in the cloud over the course of the last year. And in the coming year, we expect to see more and more companies take advantage of the opportunity afforded by Cloudsourcing.

You will be hearing more from me in the coming weeks and months about our cloud strategy offerings. And as we deliver them with our customers, I hope to uncover new and creative ways to take advantage of the opportunity afforded by the Cloud Computing business model and will share those success stories with you as well. In the meantime, if you are looking to build a business case-driven roadmap to the cloud, you can find me at mark.koenig@ appirio.com.

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?