Software as Services

Blind to the elephant in the cloud

Posted in:

Oracle
Utility computing

It always happens with new technology. People can't quite get their heads around it, so they latch on to some feature or another and assume they've understood the whole thing — a modern replay of the parable of the blind men and the elephant. So we have Larry Ellison in fine form at the Churchill Club last week, the audience apparently rolling in the aisles in this edited video clip at his assertion that cloud is just "a computer attached to a network ... it's databases, and operating systems, and memory, and microprocessors, in the Internet." We also heard last week that Oracle, the company Ellison leads, is planning to offer the option of subscription-based pricing for its midmarket JD Edwards line of business software, responding to customer demand for more SaaS options. (Whether the plan will see the light of day is another matter; the proposal is stalled while Oracle co-president and finance chief Safra Catz crunches the numbers). Meanwhile, any number of software vendors are adopting Amazon EC2 or similar platforms as a new cloud-era take on what I used to call SoSaaS. As Gooddata founder Roman Stanek wrote yesterday, this is a backward step:

... a new way how to 'throw software over the wall' again. Many software companies have repackaged their software as Amazon Machine Image (AMI) and relabeled them as SaaS or Cloud Computing. It's so simple, it's so clever: Dear customer, here is the image of our database, server, analytical engine, ETL tool, integration bus, dashboard etc. All you need it is go to AWS, get an account and start those AMIs. Scaling, integration, upgrades is your worry again. Welcome back to the world of enterprise software ...

So what is SaaS and cloud computing? Is it computers on a network, in the Internet? Is it subscription pricing? Is it virtualized infrastructure? Is it multi-tenancy? It is all of those things and yet so much more. What makes it unique and disruptive is the way that it combines them all and how they behave in that context. When people take one feature or another and examine it in the context of their own experience, they inevitably miss the point. What they fail to understand is that computing changes when it's immersed in the cloud. The most crucial attribute of any computing that aspires to the 'SaaS' or 'cloud' title is how well it is adapted to a connected environment. Ellison is simultaneously right and wrong: he's right to say it's just "computers in the Internet" and yet oh so wrong to say this is nothing different from what we've always had. PS: I started telling people this, by the way, a decade ago. About the same time that Ellison was warning (with admirable prescience), "The software business is on its way to becoming a service business ... If you don't understand this [as a software vendor], you're going to be in a lot of trouble." Whatever jokes he cracks about the way our industry markets itself, Larry Ellison knows very well which way the wind is blowing, and always has. But if no one else can see the elephant that threatens to trample all over Oracle's licensing and maintenance revenue stream, why should he of all people bother to draw attention to its existence?

posted by Phil Wainewright
October 2, 2009 @ 7:18 am

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