Google, Salesforce.com vs. Microsoft Headlines Cloud Computing Battle for 2009
Google, Salesforce.com vs. Microsoft Headlines Cloud Computing Battle for 2009
Opinion: This time of year brings the usual glut of high-tech prognostications from research firms all over the
Invariably, there is one category that stands out during the waning year that is expected to continue to bloom in the next year. With all apologies to Oracle CEO Larry Ellison, this year's prize goes to cloud computing, comprising infrastructure software hosted on the Internet and applications delivered as SAAS (software as a service).
Research firms tend to render their educated guesswork in generalities, staying away from naming specific vendors, acquisitions or other moves.
Fortunately, SAAS service firm Appirio, which does useful things such as synchronize cloud platforms from
Salesforce.com and Google, gets a little more candid in its top 10
predictions for the evolution of cloud computing in 2009. These conclusions are
"loosely based on what Appirio is hearing and seeing first hand from
industry insiders around the globe-from a base of over 2,000 customers,
partnerships with leaders in this space, and conversations with industry
Disclaimer: Appirio is biased toward partners Google and Salesforce.com, so take the criticisms of Microsoft's forthcoming Windows Azure platform as lightly as you like in the absence of Microsoft's finished product yet. Here is the list, supported by my own feeling about each talking point.
1) Appirio said that while "Microsoft and other traditional software players invest even more in new but closed cloud platforms," proponents of a more open approach, like Amazon, Facebook, Google and Salesforce, will push more and deeper "cloud connections." This will create a more heated debate between the value of closed versus federated platforms.
My take: This is undoubtedly true. We've seen this already, with Google and Salesforce.com creating integrations between Force.com and Google Apps and Google App Engine, and Zoho integrating Google App Engine. These are buds of a cloud computing platform that Microsoft Windows Azure will be geared toward the Windows development community.
2) Appirio says Windows Azure will see limited adoption from ISVs and customers, disappointing users and remaining well behind established cloud players until 2010. Even then, it will serve "primarily as a better foundation for Microsoft Exchange and existing on-premises .NET applications."
My take: Correction: I originally assumed that Appirio, like Google and so many other SAAS vendors, believes Microsoft "doesn't get" the cloud. Appirio quickly corrected me on this score, noting that it believes Microsoft will struggle with Azure because it already has an entrenched on-premises software business. This will make it hard for Microsoft to serve both SAAS and traditional customers without cannibalizing its own revenues. I respectfully disagree. That's SAAS bias talking if I ever heard it and not necessarily true. Then again, the task before Microsoft is unprecedented in the era of Web-driven software. I do know that if Microsoft fails to impress the Windows developers, it will severely damage the company. Microsoft can't afford this kind of failure, so I expect Azure to wow folks and offer flexible, competitive pricing to challenge Google, Salesforce.com and Amazon Web Services. Microsoft's SAAS will complement its on-premises apps until customers are ready to move entirely into the cloud. When will that be? If I knew that ... well, I'd be in the predictions market.
3) Enterprises flock to Google Apps because Google will boost its security, transparency and development languages for businesses. "We expect to see at least three times the number of enterprises evaluating and moving to Google Apps, at the direct expense of Microsoft Exchange, Office and Lotus Notes," Appirio claims.
My take: Eh. That's what I believed would be the case for 2008 after a promising 2007 saw the launch of Google Apps Premier Edition, the acquisition of Postini, and the signing of big contracts such as CapGemini. While hundreds of thousands of businesses are paying for Google Apps, the big contracts are either elusive or top secret. While innovation in Gmail on Google Apps has been superb, enterprise momentum has cooled, in my humble opinion. There is little to no buzz around GAPE among enterprises the way there was in 2007. With Microsoft Online Services coming on strong in the latter half of 2008, I agree with Appirio that Google could double down on the enterprise in 2009, telling customers Microsoft just doesn't get SAAS and the cloud. Will this include acquisitions? It could, provided they come at a recessionary bargain.
4) A major SAAS 1.0 company will fail. Although SAAS and cloud investments will increase next year, a number of SAAS 1.0 companies-stand-alone companies who built their SAAS products from scratch on their own-will falter. Appirio says Salesforce.com's momentum with its Force.com platform will suck the life out of rivals.
My take: Presumably, Appirio means SugarCRM or NetSuite. Funny though. Other than Salesforce.com, I don't see a major SAAS 1.0 company, do you? In any case, 2009 is bound to be rough for a lot of vendors, on-premises or SAAS focused. That Salesforce.com could play anaconda to a smaller SAAS 1.0 mammal wouldn't shock me. The question: Which mammal will it be?
Oracle, SAP to Delve in PAAS?
5) A rise in serverless companies with 1000-plus employees. In 2009,
the market will start to hear about more and more companies going completely
My take: In other words, medium to large enterprises will creep into the cloud. Why not? Serena Software, which is increasingly moving to Google Apps via Gmail, has told me it could conceive of being serverless one day. Why wouldn't other high-tech or bleeding-edge companies outside high tech move completely into the cloud? It's the future, though I expect Microsoft's vision of a hybrid model to more accurately reflect IT for the next five years.
6) The rise and fall of the private cloud. While private clouds will continue to generate a significant amount of hype, customers in most cases will realize they are little more than a better data center implementation. They will be valuable for customers who have significant transaction volumes and stringent regulatory or security requirements.
My take: I haven't given much thought to this, to be frank. Appirio's argument makes sense, but should we care? How much of the overall could computing market will the private cloud segment compose?
7) Business intelligence (BI) becomes the next functional area to "SAASify. While CRM and HRM applications became poster children for the shift to SAAS these last few years, we'll see the same thing happening with on-demand BI."
My take: Yes! I absolutely agree. Panorama, PivotLink, LucidEra, Business Objects and others are gaining momentum. BI has been such a big market in on-premises software for years. Why wouldn't companies moving to the cloud also want to hook BI to the cloud the same way? There is a bright future here. Again, though, with 2009 as bleak looking as it is, you'll get no finite market figures from me.
8) "SAP or Oracle get into the PAAS [platform as a service] game and start at least talking about a new cloud platform they're building over the next few years."
My take: Oracle and SAP already do some SAAS, but joining Microsoft as a Johnny-come-lately in offering platforms and development environments around their products? That doesn't seem to fit either company's pattern, yet Oracle has such a big legacy of database software that it seems irrational not to offer a cloud database offering to keep Amazon and others from the door. SAP can hardly be accused of being cutting edge, but if it felt threatened enough by the cloud it could offer a big platform for app developers. However, I can't see either Oracle or SAP doing the cloud connections Google, Salesforce.com, Zoho and Amazon Web Services are doing. They'd be more like Microsoft Windows Azure; that is to say, closed ecosystems.
9) Enterprises will figure out how to use social networks. HR and marketing organizations will finally figure out how to utilize social networks in day-to-day operations, as business will come directly through business applications that tap into Facebook, Twitter, LinkedIn and other social networks.
My take: I believe this to be true, but I also acknowledge the morass of legal implications associated with using social networks in the enterprise. There must be a number of ingredients in this pie, including responsibility, trust, accountability and common sense.
10) There will be at least one $100 million software product built on Force.com. The myth that it is impossible to build a big business on an on-demand platform will finally be debunked by the emergence of a PAAS-enabled application in 2009 that has the potential for a $100 million run rate.
My take: I disagree. Not in 2009, with the economy sucking wind. Of course, Appirio may have some inside information we don't. Does anyone else see a $100 million product coming out of Force.com next year?