Wednesday, 6 January 2010

IT utility and Cloud. And why Salesforce.com is stuck


IT utility is a widespread misconception. Whenever we name utility, we think of our own utility: gas, water and electricity
We cement those into the walls, floors and ceilings of our house, and feel perfectly happy about that. Why?

Because they're boringly static products. Water nor gas nor electricity have changed in the last 50 years nor are they going to change in the coming 50 years. Redefining the meaning of static. And boring.
But, we don't have TV's, ovens or microwaves coming out of the wall. Nor phones, PC's, lamps, etcetera. Only the stuff that feeds them.

Now, over to IT utility. The more boring the IT, the better you can "Cloud It Out". Infra comes to mind,
storage, disks, security protocols, connectivity. You do know the IP protocol was written in 1981, right? And hasn't changed since? Well there's IP6 along the way of course, and the very reason why that's been around for 5 years already, and is not being picked up at all, is that it is, indeed, IT Utility.
IT utility is never going to get past the infra level: network, storage, security, all boringly static stuff, far far away from the user. The user is close to the business, the business is dynamic, so forget it, don't even think about it!

So, can you Cloud ERP? Heck no, you just spent zillions on consultancy tailormaking that for your company. CRM? Maybe if you sell apples. HR then? Sure, if you didn't tailormake that too. But usually, that's just utterly boring stuff, perfect for SAP-ing or Clouding: standardised

So, that's why Salesforce is where it's at. At the edges of static, about to trip over the dynamics. They were tempted, and fell for it, and made their first mistake. And a big one it is: they reinvented and built in stuff like Chatter in stead of plugging already existing social networks into their own app: they IT Utilised a very dynamic piece of business, viz. social networking. They're leading now, but it will cause them to significantly trail in the years to come

It's all about business rules versus business exceptions. We're moving from one to the other, thus actually moving away from Cloudability
Governments? Always leading the way in the new business rules world; which at that point are exceptions, of course

When to Cloud? If it's static. And not dynamic (saying the same there on purpose).
Is it boring? Toss it in the Cloud if that will make you save money on it.
Is it large and can it be automatically provisioned? Toss it in the Cloud if that will make you save money on it.
Is it new and a try-out or pilot? Toss it in the Cloud and demo away at will, perfect business case for that kind of stuff
Is it anything else? Think about twice. And again. And again

Last but not least: don't inhouse or decloud what should be Clouded. It will cost you money, flexibility and marketshare. Salesforce.com...

4 reacties:

Peter Evans-Greenwood said...

I think there's a hole on the market for cloud services which someone will drive a truck though, in line with your thoughts above.

Salesforce.com and the other U.S. based cloud applications seem to be taking a boxed software approach to growing their products, continuously piling on features to try and create a competitive position. They treat cloud as an all-or-nothing decision, when really, as you pointed out, only some business services/activities makes sense in a utility model.

Given that cloud really makes sense as a utility model, there's an opportunity for someone to simplify their products, plugging it into every app or service under the sun to achieve scale, and then undercut the rest of the market. Remember, you don't buy power from the power station (data utiity), you buy it from the distributor (SME app).

This does a couple of things:
1. Make it easier for them to achieve scale. They become a "information asset management service", which is easier to build out.
2. Make it easier to buy. It's not longer an all or nothing decision.
3. Makes it easier to partner, which improves their route to market.
4. Lets them do less, which give's the cost lever a good hard yack, and cost of is the most potent weapon they have.

It's a strategy of plug the CRM data into your existing wiki and/or social network, rather than attempt to build a new social network around your CRM.

Let's face it: the vast bulk of enterprise functionality is a commodity. Play to that strength, rather than work against it.

r.

PEG

Martijn Linssen said...

Thanks PEG, you got a great point there.

If, for argument's sake, an auto-IP4-to-IP6 converter were possible, that would be a nice layer to squeeze in between...

Yes, the vast bulk is commodity. But we're just car salesmen that can influence, drive and dictate the car factories to make that very unique car each and every time. And we do.

Cloud will drive down that particular form of standardisation though: just saying no to the customer. In that way, it will make IT more mature

developinthecloud said...

I mostly agree with you as long as we're discussing platforms that serve boxed-type solutions in the cloud, broadly speaking I disagree.

Salesforce offers two major areas in their cloud offering, the CRM, and the Force.com platform. The second is far from the boxed software paradigm, and can be used to create any type of web application, or plug in any 3rd party application (built on the platform or not). I think that hole in the market you're talking about is already filling up with the likes of the Force.com platform, Google App Engine as well as Microsoft Azure.

Don't get me wrong, these players are not there yet, but they're on the doorstep and each of them is powerful, flexible, and quick enough to evolve with your business. As a developer I'm involved in business-process evolution, and the cloud-based platforms facilitate this evolution more quickly, cheaply and efficiently than that of legacy systems.

Martijn Linssen said...

Thanks developinthecloud, I agree with your explanation. The Force.com is a real PaaS, and does fit in the Cloud

Of course a great advantage of Cloud-based platform is that they have no legacy, so don't fool yourself here about speeds and ease of development. I am very curious to see where the twain will meet, but it will surely be in the area of Web Services

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