Google, vs. Microsoft Headlines Cloud Computing Battle for 2009

SAAS integrator and consulting services firm Appirio has some strong opinions about the way cloud computing will evolve in 2009. In short, it sees open clouds from and Google duking it out with Microsoft's Windows Azure and Microsoft Online Services. Appirio sees big things for the cloud, from enterprise applications and business intelligence to enterprise social networks. What do you see for the cloud in 2009?

Opinion: This time of year brings the usual glut of high-tech prognostications from research firms all over the world.
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 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 influencers."
Disclaimer: Appirio is biased toward partners Google and, 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 creating integrations between 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, 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's momentum with its platform will suck the life out of rivals.
My take: Presumably, Appirio means SugarCRM or NetSuite. Funny though. Other than, 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 could play anaconda to a smaller SAAS 1.0 mammal wouldn't shock me. The question: Which mammal will it be?