October 29th, 2009

Cloud cuts everyone's cost of ownership

Posted by Phil Wainewright @ 8:14 pm

Categories: Customer experience, On-demand, Platform as a service, Utility computing

Tags: Software-as-a-service, ISV, Infrastructure, Software As A Service (SaaS), Managed Hosting, Cloud Computing, Emerging Technologies, Phil Wainewright

Speaking in the opening keynote of SIIA OnDemand in San Jose this morning, SuccessFactors CEO Lars Dalgaard let slip a statistic that set several attendees a-twittering. He revealed that the SaaS provider’s multi-tenant application infrastructure supports its 2,850+ customers and 5.4+ million users on just 150 servers.

The ability to achieve such enormous economies of scale demonstrates the huge power of multi-tenancy and gives the lie to the line, so often peddled by the conventional on-premise software vendors, that SaaS is just a delivery option. SuccessFactors would not be able to run its operations with anything like the same low overhead if it had to separately maintain the ability to ship on-premise instances of its software.

The conventional software model perpetuates a scandalous wastage and duplication of resources. Every single customer of an on-premise platform or application installs their own custom implementation. Every one of those implementations builds in enough spare capacity to support unexpected usage spikes and peak load at the organization’s busiest period of the year — yet remains idle the rest of the time. Its IT staff acquire a huge store of learnings and experiences that are solely revelant to their own environment. All of those needless investments and expenses are replicated across thousands of an ISV’s customer base. The aggregate waste adds up to a burdensome cost of ownership spread across its customer.

With SaaS, the customer base shares a single infrastructure, eliminating Read the rest of this entry »

September 21st, 2009

Computing by the people, for the people

Posted by Phil Wainewright @ 3:08 pm

Categories: CRM, Collaboration, HRM, Platform as a service, Social computing, Web 2.0

Tags: Social Software, Computing, People Management, Phil Wainewright

Sometimes you’re too close to the wood to see the forest. Across several different sectors of computing, participants are talking about a trend to add social, collaborative or self-service features to certain application categories. Perhaps it’s now time to join the dots. As I wrote last week, these are all facets of a broad trend across computing towards the democratization of IT — the people that actually use computing, as opposed to those that make or manage it, are taking control.

For those who haven’t seen it yet, here’s a roll-call of the different categories of business computing where this is in evidence.

Social CRM is the term for a new trend in customer relationship management software that acknowledges (in Paul Greenberg’s words) “the customer’s ownership of the conversation.”

Enterprise 2.0 is (in Andrew McAfee’s words) “the use of emergent social software platforms within companies, or between companies and their partners or customers” to allow user-driven sharing of knowledge and information.

People management is another application category where social computing and user participation is creeping into various aspects of HR and talent management, from social recruiting to performance management.

Ad hoc customization is becoming a staple offering in SaaS applications and is an integral component of platform as a service. Meanwhile, cloud computing is making compute power available on demand to anyone who needs it.

What have I missed out? Add your examples in Talkback below.

September 10th, 2009

Survival of the fit-most

Posted by Phil Wainewright @ 2:18 am

Categories: Ecosystems, On-demand, Platform as a service, Utility computing, Web 3.0

Tags: Web, Survival, Cloud, Cloud Computing, Channel Management, Virtualization, Marketing, Hardware, Phil Wainewright

In the emerging Web era, connectedness reigns supreme. Competitive survival is no longer the preserve solely of the strong, the quick and the nimble — the attributes popularly associated with Darwin’s adopted motto, survival of the fittest. The Web emphasizes connections, sharing and community, enabling a further advance in the evolution of homo sapiens as a social creature.

In this environment, the individuals, tools and organizations best adapted to thrive are those best able to connect. Not the fittest so much as the fit-most.

This change may seem to be the consequence of technology innovation — in this case, the Web — having an impact on society. But perhaps the rise of the Web is itself a reflection of a change that was already taking shape, a reaction against the individualist creed that culminated in the 1980s notion that ‘Greed is good.’ Today we see a generational shift towards shared endeavor and a backlash against excessive intellectual property protection.

A fresh example of this emerging collaborative mindset came last week when online backup vendor Backblaze published the specifications it uses to build low-cost storage devices for its data center. Ten years ago, this would have seemed a crazy revelation of a proprietary secret. Today, it looks like a smart move because we have a better understanding of the notion of crowd-sourcing. We realize that Backblaze aims to tap the collaborative expertise of the Web community to hone and refine the savings it can make on its physical storage costs. It’s a rational decision because the company isn’t giving away the operational details of its core service offering — it may even strengthen its selling power by publicly demonstrating the viability of its prices compared to such low capital spending costs (”three-tenths of one penny per gigabyte per month over the course of three years”).

Yet making the most of the doctrine of the fit-most means overturning long-held instincts to act privately and secretly, and instead making a conscious effort to share and use communal assets, whether as providers or consumers. The pressure to conform to deeply ingrained behaviors and customs is hard to resist (Zoho recently became the latest in a long line of SaaS and cloud providers to cave in to the clamor for a ‘private cloud’ option). We know why we want to keep things private — the arguments are well-rehearsed and almost a universal folk memory — whereas the impulse to share is much less well documented and understood.

Sharing and community are nevertheless at the heart of our success as a species, and ’survival of the fit-most’ is all about replicating that success in the cloud computing environment. Instead of trying to do everything alone as a hermetically sealed entity, the cloud encourages us to reach out and utilize the services of others that do what they do better than we can do it ourselves — which is exactly how human civilization works. We are all individually stronger and more potent when we rely on each other.

In cloud computing, survival of the fit-most emphasizes attributes such as: Read the rest of this entry »

August 26th, 2009

WebEx chief quits Cisco for Salesforce.com

Posted by Phil Wainewright @ 2:35 am

Categories: CRM, Collaboration, Platform as a service, Salesforce.com, WebEx

Tags: Salesforce.com Inc., WebEx Communications Inc., Collaboration, Cisco Systems Inc., Phil Wainewright

Doug Dennerline, a long-serving Cisco insider who took the reins at web conferencing leader WebEx several months after Cisco acquired it, has quit his job as senior VP and general manager of Cisco’s Collaboration Software Group to become executive VP, enterprise sales Americas at Salesforce.com [disclosure: both WebEx and Salesforce.com are former clients].

I interviewed Dennerline in January last year, just weeks after he took up the collaboration software role at Cisco, and he outlined four priorities for that year:

• Get Cisco’s sales team selling the WebEx service
• Finish preparations for a production launch of WebEx Connect, the company’s on-demand collaboration and composite applications platform
• Harness Cisco’s partner channel to sell WebEx
• Tap Cisco’s resources to bolster research and development of new WebEx services

Although WebEx has continued to grow and has brought out some Cisco-inspired enhancements to its offerings, progress on all four points has been lukewarm and it’s no surprise Dennerline found himself tempted by the more vibrant pastures at salesforce.com. (As an aside, I’m also intrigued to see Salesforce.com hiring again at that level after cutting some senior sales management roles just six months ago — as well as wondering what Cisco, one of Salesforce.com’s banner customers, thinks about its supplier poaching one of its top executives).

To see Dennerline jump ship no doubt compounds the demoralization Read the rest of this entry »

July 1st, 2009

WebEx augurs ill for Cisco's cloud ambitions

Posted by Phil Wainewright @ 1:04 pm

Categories: Collaboration, Ecosystems, Platform as a service, Utility computing, Web 2.0, WebEx

Tags: WebEx Communications Inc., Cisco Systems Inc., Phil Wainewright

Color me skeptical, but I feel the detail behind yesterday and today’s Cisco Live event hasn’t matched the aspirations set out in executive keynotes. I like the vision set out by CEO John Chambers of providing a technology infrastructure that (as Oliver Marks puts it) does a better job of connecting people. I’m highly supportive when CTO Padmasree Warrior looks ahead to a future fabric of ‘intercloud’ interoperability standards — ending lock-in by individual cloud providers — and talks about ‘federation’ between cloud and on-premise. But when I look at the map of where Cisco claims to play in the cloud, I’m struck by how feeble its tenure is at each level, from the underlying foundation all the way up to both Paas and SaaS, where WebEx is its undernourished poster child, as I’ll discuss below.

First, there’s what Cisco calls the ‘IT Foundation layer’ — the underlying hardware and virtualization platforms on which cloud services run. Cisco expects to play a big role here with its Unified Computing System (UCS). I’m sure there’s a huge potential market for UCS among enterprises, telcos, IT services providers and many other established data center operators that want to transition their existing enterprise infrastructure into more of a quasi-cloud environment. But I can’t help thinking that most of them are missing the point when they try to scale up familiar enterprise technology instead of scaling out to a more web-scale architecture.

I’m also suspicious that Cisco is falling into the trap of over-engineering UCS so that it ends up too-clever-by-half to really deliver the promise of cloud computing. I would be more convinced if Cisco had productized the existing web-scale infrastructure that it acquired with WebEx. But just as Microsoft has developed its Azure cloud platform with a whole new set of design objectives rather than productizing the existing web-scale infrastructure it had already built for its Live properties, so Cisco is shoe-horning UCS Read the rest of this entry »

June 3rd, 2009

Intuit makes two-pronged PaaS and SaaS push

Posted by Phil Wainewright @ 2:41 am

Categories: Ecosystems, Intuit, Marketplaces, Platform as a service

Tags: Software-as-a-service, Intuit Inc., Platform, PaaS, Cloud Computing, Sales Force Management, Sales, Phil Wainewright

Hard on the heels of its $170 million acquisition of SaaS vendor PayCycle (which I hope to post some further commentary on later today), Intuit is also announcing today an extension of its Intuit Partner Platform — a platform-as-a-service offering first launched a year ago — to support third-party development platforms [disclosure: I'm hosting a sponsored webcast later today with Intuit's Alex Barnett about application development in the cloud]. Read further coverage on Techmeme, AccMan, CloudAve.

The significant element of Intuit’s PaaS announcement is that it is a land-grab to capture mindshare among developers on other cloud platforms, who can take their AppEngine, Amazon Web Services or self-hosted applications and make them available using Intuit’s single sign-on, billing and QuickBooks integration infrastructure. Market reach being one of the key attributes developers look for in a new platform, perhaps the most appealing factor is that applications will be showcased within the Intuit Marketplace, with a potential reach to the four-million-strong installed base of QuickBooks accounting software customers and their estimated 25 million employees.

One of the five partners who are live on this new Federated Applications option at launch is Vertical Response, which was one of the first companies to be successful on Salesforce.com’s AppExchange partner directory. The company grew rapidly by piggy-backing on Salesforce.com’s existing market reach, offering an email marketing add-on that was a natural and simple extension to the core sales automation application. Vertical Response played an important role Read the rest of this entry »

May 27th, 2009

Intalio takes multi-tenancy on-premise

Posted by Phil Wainewright @ 4:07 am

Categories: Architecture, CRM, On-demand, Platform as a service

Tags: Salesforce.com Inc., On-demand, Customer, Intalio Inc., Managed Hosting, Cloud Computing, Phil Wainewright

I’ve been writing about hybrid cloud models recently, making the case for extending cloud infrastructure on-premise in certain circumstances. I did so with foreknowledge of an announcement that BPM vendor Intalio has had in the works for several months. Last Tuesday, I was in Palo Alto for the public unveiling of Intalio’s new application platform, which is available both on-demand and on-premise — but in a model that reverses the normal polarity of such offerings and challenges the received wisdoms of cloud purists and on-premise diehards alike. It does this by taking some of the core principles of multi-tenancy and moving them on-premise. Read James Taylor for a detailed and thorough write-up of the product announcement. Perhaps most surprising, this challenge to on-demand orthodoxy is led by Intalio’s founder and CEO Ismael Ghalimi, a long-term evangelist for the on-demand model and organiser of the annual Office 2.0 conference, a mecca for advocates of on-demand computing.

As I’ve discussed in previous posts, there are two equally valid ways of achieving multi-tenancy. The first, espoused and evangelized by Salesforce.com, is to share as many tenants as physically possible on a single instance, right down to and including the database layer. The second model, adopted by NetSuite, SuccessFactors and many other leading SaaS players, is to replicate instances across large numbers of low-cost commodity hardware machines, sharing databases for smaller customers but having larger accounts run on their own virtual database instance. This is still multi-tenancy because the replicated database schemas are identical. There is nothing that ties any customer to a specific instance, leaving the provider free to distribute and manage instances in whatever way it sees fit.

What Intalio has done is to borrow this principle of replicated instances and apply it to its on-premise implementations, as Ghalimi explained last Tuesday:

“One of the lessons that we’ve learned in the past 20 years is that letting customers change application schemas is a very bad idea. We’ve learned that lesson and the way we implemented our CRM application is, you cannot change the standard objects. All you can do is expand them. You can add fields, but you can’t remove them. You can rename a field but you can’t change its logical name. So any modifications customers do will not break the schema. We’ve learned a lot from Salesforce.com. They did a really great job there.”

This is a perfect illustration of a principle that — in opposition to Microsoft’s ‘Software-plus-Services’ rhetoric — I prefer to call services-plus-software. In other words, architect for the cloud first, and then (if you must) Read the rest of this entry »

April 9th, 2009

Opening the kimono on Salesforce.com's green crystals

Posted by Phil Wainewright @ 10:10 am

Categories: Architecture, Platform as a service, Salesforce.com

Tags: Salesforce.com Inc., Marketing, Database, Multi-tenancy, Sales Force Management, Sales, Phil Wainewright

Last year, a discussion at OnDemand Europe (which this year I’m helping to organize, see disclosure and video) prompted a couple of posts here on the importance and degrees of multi-tenancy. Those postings in turn prompted fellow-Enterprise Irregulars blogger Bob Warfield to liken multi-tenancy to the green crystals apocryphally used in soap marketing:

“… multi-tenancy is much more of a marketing event than a technology event. Whoa! That sort of thing will get me excommunicated from the SaaS Church of Benioff. Well, I’m sorry, but it’s true. Multi-tenancy is all about what we used to call ‘green crystals marketing’ at Borland … When you’re having a hard time differentiating, you find something unique and make it your green crystals. They provide a reason to believe why your offering is better even if they aren’t the whole reason or even most of the reason.”

Whoa indeed, Bob, I thought at the time, that’s a bit extreme. But Bob’s words started ringing in my ears the moment Salesforce.com co-founder and chief technology guru Parker Harris stepped up on stage at Cloudforce London this week to pronounce Salesforce.com the leading force in cloud because, quote, “We chose the right algorithm for multi-tenancy.” [By the way, I should also mention Salesforce.com is a recent client. See disclosure.]

Harris went on to map out the secret sauce that makes the company’s multi-tenancy so special — and I know many readers will want to know what it is, so I’ll get to that in a moment, bear with me — but the first question in my mind was, why does Salesforce.com decide that now all of a sudden it wants to start opening up the kimono and exposing details of something it’s always previously kept schtum about? (’Green crystals! Green crystals!’ whispered Bob’s avatar, excitedly jumping up and down on my left shoulder).

“Customers, especially from larger enterprises, have started asking us to tell them more about it,” explained EVP of marketing George Hu when I caught up with him as the keynote crowds dispersed. Fact is, I suspect we’re going to hear a lot more discussion about multi-tenancy this year. Larger enterprises are looking at cloud technologies and seeing that they can implement private clouds internally, so no wonder many of them are asking what’s so special about Salesforce.com. They’re probably wondering whether they can replicate what Salesforce.com does on their own private clouds, and sidestep the need to entrust their application infrastructure and data to a third party.

So are Salesforce.com’s green crystals just a marketing ploy, or is it really something that customers can’t easily replicate in their own private clouds, or by adopting rival cloud platforms? Read the rest of this entry »

March 31st, 2009

LongJump puts PaaS on-premise

Posted by Phil Wainewright @ 1:03 pm

Categories: Development, Platform as a service, Software licensing

Tags: Phil Wainewright

In a move that will horrify purists but bring a smile to the face of many conventional ISVs desperate to launch SaaS offerings of their own, platform-as-a-service provider LongJump is today making its platform available as customer-installable licensed software.

The move is designed to meet demand from enterprises and ISVs that want to run their own cloud development platform rather than entrust their fate (and a monthly per-seat subscription) to a cloud provider. But it will prove controversial with rival platform-as-a-service providers such as Salesforce.com and Zoho, whose argument has always been that the unique benefits of their multi-tenant platforms can only be realized by running on the cloud provider’s own shared infrastructure.

LongJump takes a different view, and will offer its software for customers to install under either single-tenant or multi-tenant licenses, for an annual fee ranging from $60,000 to $240,000 per CPU. Customers will also be able to choose their preferred degree of multi-tenancy, for example whether to assign an individual database to each downstream customer, or how many different application instances they operate (allowing them, for example, to operate regional instances to cater for variations in data privacy requirements). LongJump is restricting support to its preferred operating environment of Red Hat Enterprise Linux and the mySQL database, and customers will have to keep pace with the company’s quarterly release cycle, as it will only support the current and most recent version.

The most unique element of LongJump’s proposition lets developers adopt a hybrid strategy, using LongJump’s servers as a development or pilot platform while maintaining larger-scale production applications on their own in-house servers. This means an enterprise can Read the rest of this entry »

February 28th, 2009

Appirio, shafting the global SIs

Posted by Phil Wainewright @ 11:09 am

Categories: Development, Ecosystems, Platform as a service, Venture capital

Tags: Software-as-a-service, SiS, Appirio, Software As A Service (SaaS), Managed Hosting, Cloud Computing, Emerging Technologies, Phil Wainewright

VCs placed another $10 million bet this week that global SIs will crumble in the face of the enormous change being wrought on their businesses by the advent of SaaS and cloud computing. Jeff Richards of GGV Capital, who is joining the board of cloud integrator Appirio after the VC backed a new $10 million funding round, told me this week that Appirio is “building a leadership position” at the expense of established big-name integrators. [Disclosure: Appirio is a recent client].

“Appirio has very large customers that are signing on for multi-million dollar contracts,” he said. “When a company like Japan Post wants to do something [in the cloud], they’re turning to Appirio and not to the global SIs.”

A recent blog posting by Appirio’s CEO Chris Barbin discussed this phenomenon under the heading, Short the Global SIs, and inspired my more aggressive title, above. Forget shorting, these BigCos are utterly shafted (along with some others I could mention). Barbin recounts several examples of how woefully out of their depth they show themselves to be when pitching for SaaS and Paas implementations, summing up:

“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…

“… enterprise executives are simply bypassing the Global SIs because of their bloated costs models, old school methods, multi-billion dollar partnerships with legacy vendors, or systemic lack of knowledge of cloud computing products and services.”

This at a time when many large corporations are starting to get deadly serious about Read the rest of this entry »