Appirio - The CIO's Guide to On-Demand

Part II - Beware the Wolf in Blue Clothing

2009-07-07T08:36:00.001-07:00

Narinder Singh

IBM's mixing metaphors in the cloud slows innovation and enterprise success with the cloud

In Part I of our blog we shared our thoughts on the debate between public and private clouds. Here we want to share what to expect when entrenched vendors muddy the waters in the cloud (and reissue our offer to a public webinar to debate the topic).

The Legacy Vendor Playbook
The effort for a giant to play catch up on cloud computing (or other disruptive technology innovation) normally involves three main components.

Step 1 - Name everything the same
Step 2 - Claim progress through standards
Step 3 - Build a few real, innovative solutions, but use them as a part of many existing strategies

All the while, the center of these organizations still sound like the advocates of the previous paradigms so insightfully described in Clayton Christensen's "Innovator's Dilemma."

Step 1 - Name everything the same
At one point IBM had more than a dozen (maybe 20+) products that were called DB2. SAP has similarly pulled everything into their suite whether integrated and relevant or not. This enables vendors to ensure that statements that their "product (e.g. DB2) can do X" is inevitably true.

Step 2 - Claim progress through standards
As we have noted before, a search for web services standards returns IBM as the top result with a page with over 30 WS* standards. On average a very small number of those standards are being used within enterprises to allow two systems from different vendors to inter-operate. The open cloud manifesto from IBM followed a similar pattern, it allowed them to jump closer to the center of the discussion around cloud computing without having a single proven offering related to it. The most proven demonstrable cloud innovations have come from vendors like Amazon, salesforce.com and Google. They have used proven web standards to promote interoperability without slowing innovation.

Step 3 - Build a few real, innovative solutions, but use them as a part of many existing strategies
IBM has the ability to and will deliver true, innovative, multi-tenant solutions. We have seen it before with other standards and areas of development. Yet rather than being disruptive, this innovation is cornered and primarily used to make less relevant, non-cloud based solutions appealing to enterprises and to demonstrate technology leadership in the market. Similarly, Microsoft will certainly provide interesting capabilities through Azure to allow existing .NET solutions to plug into cloud services. But their motivation is primarily to protect their investments, not their customers.

How should enterprises respond?
Now that we know what tens of millions of marketing dollars will promote, how should enterprises respond?

1. Use technology advancement from legacy vendors where it makes sense - as we mentioned, IBM (and others) will deliver some real innovation, and many of the technologies are applicable to helping you create a more efficient IT environment. In those scenarios, continue to explore offerings old and new to help reduce costs and increase flexibility. At the same time, expect incremental improvements to your current solutions - not giant leaps forward.

2. Don't believe the hype - it's one thing to use technologies where they make sense, its quite another to use them to accelerate your path towards the wrong destination. Continue to invest in exploring and deepening the understanding of the real cloud computing solutions and ecosystems (obviously we think salesforce.com, Google and Amazon are great starting points). Even if you are currently skeptical of (public) cloud computing, it will allow you to draw the right contrasts and clarify what is really different.

3. Use pure plays to increase knowledge, get real benefit and put pressure on legacy vendors - We have had many prospects and customers begin to explore public cloud
apps like Google simply to place pressure on their legacy vendors (Microsoft Exchange or Lotus Notes). In some cases, this resulted in dramatically lower renewal costs of those products; in others it led to a deeper understanding of and eventual selection of Google Apps. Either way, it's a clear benefit to the enterprise. And over time it inevitably increases the rate of adoption of the solutions delivering superior value (i.e. the cloud).

While legacy vendors take steps to participate in the next generation of technology, they will often do so while belittling it. SAP in the past weeks has simultaneously aggressively promoted the cloud and then deemed it mostly inadequate for enterprise solutions. To cut through this alternative approach to holding on to the past, enterprises can ask a few simple quations. Is the cloud more or less capable than it was three years ago in handing our needs; will it be more or less capable three years in the future of handling our needs? Regardless of your evaluation of where it stands today, answering these questions for yourself will indicate where you should invest going forward.

Structure 09: Cloud Computing is Changing the World, But My Old Products Will Still Work

2009-06-29T08:09:00.001-07:00

Balakrishna Narasimhan

Last week, I attended GigaOM's Structure09 conference, which was an interesting and well-run conference. It was fun to see industry thought-leaders like Werner Vogels, Marc Benioff, Chuck Hollis, James Urquhart and many others. For me, the conference confirmed many of the things we've written about recently:

1) Broad acceptance that enterprises are interested
There's absolutely no question that cloud computing has moved into the mainstream of enterprise technology. Everyone from Microsoft to Accenture to HP to IBM to SAP admitted as much. With the worsening economic conditions and the maturation of cloud computing services, enterprises are actively investigating cloud computing. The main differences of opinion between the legacy vendors and companies like Salesforce and Amazon lie in how quickly and broadly companies will adopt cloud computing.

2) Big vendors still at conceptual level, and trying to constrain the cloud
Large vendors like HP, IBM, SAP and Microsoft are still grappling with cloud computing at a conceptual level. It's clear that they recognize the importance of the profound shift that's happening in the industry but are not sure what to do about it.

Russ Daniels, HP's CTO of Cloud Services, talked about cloud computing as the brain that sits above the nervous system of the internet, and HP's vision of "everything-as-a-service". While interesting conceptually, there was little beyond abstract concepts in Russ' talk. If you were listening closely, there were also hints of how HP wants to preserve the status quo. While saying that the cloud was transformational, Russ made a point of saying that the cloud is best for solving new problems rather than for business automation, which current systems and processes do very well. I agree that the cloud can help solve new problems or enable new processes but it's also very disruptive to the status quo. Current approaches to business automation are expensive, brittle and leave CIOs managing the entire stack. Cloud platforms and applications change this completely and enable nimbler, faster processes.

Microsoft's Yousef Khalidi admitted that every enterprise he's talked to recently wants to move to the cloud but are held back by concerns about trust, performance and availability. He went on to say that enterprises have a variety of workloads, many of which will stay on-premise for a long time. It's hard to disagree with that premise but the question is whether Microsoft is really going to accelerate the movement of the majority of workloads to the cloud, given what that would mean to their revenues and profits.

SAP's Vishal Sikka continued along the themes he used in a recent CIO.com interview. He acknowledged the importance of cloud computing, but at the same time said that it's best suited to "simple transactions" and edge process within enterprises. Japan's largest employer would beg to differ with Vishal.

IBM's Willy Chiu talked about how IBM is approaching cloud computing from the ground up. They're partnering with universities to improve education on the topic and creating global innovation centers to explore use cases. I was impressed by the comprehensiveness and ambition of the approach. However, I was disappointed by the conclusion - companies can adopt cloud computing by purchasing a "Cloudburst" appliance, then having IBM build them a private cloud, and eventually by moving to IBM's public cloud. This sounds an awful lot like a "cloudwashing" of IBM's current offerings.

3) Too much discussion of clouds at the infrastructure rather than platform layers
The entire cloud conversation at Structure was very focused on infrastructure. As Daryl Plummer of Gartner has noted, Cloud computing is not about infrastructure. It's about a new delivery and consumption model for IT services that are elastic, metered and abstract away the SW stack. The conference was mostly focused on the lowest layer of the stack and didn't really talk about how the cloud enables transformation at the business process level. Greg Papadopoulos of Sun was one of the few people to talk about this, although he didn't dwell on it.

The thing that excites us most about cloud computing is its ability to help companies achieve the impossible. A great example of this is Starbucks' Pledge5 campaign. 21 days before the inauguration, Starbucks decided that they wanted to launch a national campaign (online, in stores and on Facebook) to drive community service across the nation. They needed to build a massively scalable infrastructure and application to do this. Before the cloud, this would've been hard to pull off even in time for the next inauguration. With Salesforce's Force.com platform, we were able to quickly build an application that performed flawlessly in supporting over 1M transactions across 10,000 store locations and millions of Facebook and Twitter fans.

The danger with just talking about infrastructure is that we miss the broader opportunity to engage the business and turn this into a conversation about achieving business outcomes faster and cheaper, rather than conversations about bits and bytes, which causes every business owner's eyes to glaze over. The cloud enables IT to change the conversation and it was unfortunate that this was rarely mentioned during the day.

4) Little mention of customers until Marc Benioff
The highlight of the day was Om Malik's interview with Marc Benioff. Marc brought not only brought his trademark humor to the event but brought a much-needed pragmatism and focus on what really matters. Customers. Marc was literally the first person all day to mention customers. He gave the room, which was largely composed of vendor marketing types, the best advice that we'll get - "Customers have been sold to by vendors for 30 years and they're tired of it. Customers want to talk to other customers and learn from them." Great advice and something we should take to heart.

In fact, we're turning that idea into action in the coming weeks when we'll start a new series of posts with our customers. If you're interested in being featured, leave us a comment below.

5) A few fun highlights of the day
Marc on Larry Ellison
Larry said something really zen on the earnings call - without on-demand, there's no on-premise and without on-premise, there's no on-demand.

Marc on Microsoft
I hear Microsoft is coming out with an Azune cloud.

and finally, Om's fly threads

Part I - Beware the Wolf in Blue Clothing

2009-06-22T07:54:00.001-07:00

Narinder Singh

Its not unexpected, a look back only a few years tells a similar story. When left trailing in disruptive innovation, large legacy vendors muddy the market while trying to play catch up. IBM's push of the private cloud concept is analogous to their and other providers 'leadership' in 'helping' develop web services standards, In reality they created substantial complexity until they could catch up. This led to a bottoms up revolution that brought about alternatives like REST. We are now seeing a dangerous repeat of this pattern, with an even bigger set of stakes - the rate of the cloud computing revolution.

Before examining how forces like how and why its dangerous for the market, we want to lay out our core beliefs on how enterprise CIOs can actually pragmatically view hybrid cloud models (view a great intro video on what cloud computing is).

Private Cloud, Private Internet?

Private Clouds make as much sense a having a private Internet. Leveraging concepts, standards and technologies from the Internet makes complete sense for enterprises large and small. However that is not equivalent to creating a private Internet; nor could it be a substitute for the real Internet. Similarly, technologies like virtualization, elastic infrastructure, interoperability between internal systems and public clouds all make sense. Yet, these are not the same as being a cloud provider or a substitute for public clouds.

This is not simply a matter of semantics. Companies that pursue primary strategies of attempting to replicate the approach of public clouds for purpose of bypassing them may gain some cost advantages and perhaps even some business benefits (quicker scaling) but it's an incremental change. Moving to public infrastructure/platforms is transformational from a cost and activity/focus perspective - especially at higher levels of the cloud stack. Improving the performance of your fleet of horses is no substitute for exploring the benefits of a car.

We strongly encourage companies to pursue improvements to their own IT capabilities through concepts and technologies from cloud computing - but without looking at it as a long term substitute for what real clouds can deliver. It will always be important to make sure public clouds work seamlessly with existing IT infrastructure and applications. The danger lies in falling prey to focusing on private clouds and letting IT teams and organizations preserve the status quo (for the most part) while telling leadership that they're doing something about cloud.

Private Clouds, Public Clouds - Is there anything in between?

At the same time, not all clouds will be "open to the public". We do expect very large, unique special cases to exist. At the MIT CIO forum we heard how DISA was providing certain cloud services only to government agencies. Hearing them describe the processes, policies, technologies, independence, and challenges - it was clear they were a cloud provider.

Over time, we could see very large groups or collectives pushing the creation of cloud providers that serve more specific segments (pricing models alone could be one such segmentation). However, a successful cloud provider must have a large, diverse base of customers, massive scale, and a unique angle. We expect this scale and expertise to be beyond all but the very largest organizations, only be focused on narrow threads of what is available in public clouds, and require technology expertise that rivals the best commercial technology providers.

Even where this edge case nuance applies, the reality is that the fastest route to benefit, that also aligns with the long term industry direction, will be to take advantage of what true cloud platforms like Amazon, salesforce.com and Google provide today - after years of refinement. Enterprise architects will quickly see that clouds will operate at different levels (infrastructure, platform and applications), should be analyzed accordingly, and have a substantial set of benefits it would be costly and less effective to try to replicate with private clouds.

In Part II we will discuss how large entrenched vendors like IBM and SAP go about creating confusion in the market and how enterprise CIOs should react.

PS - At Appirio we are genuinely excited about the innovation occurring in our industry and believe that vigorous, candid debate (vs. massive promotion) helps accelerate information dissemination and results in technology professionals making better decisions. To that end, I'd like to issue an open invitation to relevant executives from IBM to participate in an unscripted public webinar to directly share their perspective and debate its merits with us. We look forward to hearing from you !

What Force.com Free Edition & Force.com Sites Mean for the Enterprise

2009-06-15T12:14:00.001-07:00

Balakrishna Narasimhan

Today's launch of Salesforce's Force.com Sites and Force.com Free Edition makes it even easier for companies to get started building applications in the cloud. Force.com Free Edition enables companies to build an application on the Force.com platform and deploy to 100 users at no cost, and Force.com sites lets companies build and scale websites without any investment in infrastructure. This is a perfect opportunity for companies of all sizes to build their first cloud-based application...the question is where and how to get started.

The Challenge
We've written before about the benefits of moving your application portfolio to the cloud. The benefits can range from cost savings and a higher level of innovation to strategic advantage in the case of business-critical applications. With the worsening economic conditions, the maturation of companies like Salesforce and the growing drumbeat of successes at large enterprises, more and more CIOs at large enterprises want to evaluate cloud computing.

A CIO's job of charting a path to the cloud is complicated by three things:

Complexity of current IT portfolio: Any large IT organization has a plethora of custom and packaged applications, multiple databases, one or more types of middleware and lots of datacenters. Given such complex application and infrastructure portfolios, it's not clear where to start or what the right path forward is.
Size and scope of the cloud ecosystem: The ecosystem of cloud applications, platforms and infrastructure has grown rapidly over the past few years. TripleTree research estimates that there are 2000+ SaaS applications, let alone all the platform, infrastructure and service providers.
Confusing marketing messages and FUD: The growth and interest in cloud computing have led everyone from IBM to SAP throw their hats in the cloud ring. Each company has their own spin on cloud computing ranging from IBM's "private clouds" to Microsoft's "software + services". Since every vendor talks about cloud computing from their own perspective, it's hard to parse what it actually means to the customer.

The Cloud Portfolio Mapping Approach
We've worked with a number of large enterprises to build the business case for cloud computing, map their application and infrastructure portfolios, and help them chart their path to the cloud. Based on this experience, we've identified 3 things that every enterprise can do to get started on the path to the cloud.

1) Current State Assessment:

The first step is to assess the current state of your IT portfolio and organization. This involves collecting and analyzing budget data, inventorying your projects and infrastructure, understanding where your team is spending time, assessing skill levels and readiness for change across your team and understanding how the IT organization is performing from the perspective of your internal and external customers (we've created a checklist here). The objective of this effort is to identify where your team is spending time and effort, understand how this aligns with your organization's priorities and understand where your major pain points are.

2) Opportunity Identification and Prototyping:

The next step is identifying the areas in your portfolio where cloud computing could help you achieve your goals more quickly and efficiently. It's critical to understand the major cloud computing platforms and typical use cases. Cloud computing is a delivery model that enables you to purchase compute power, storage, application platforms and applications in a fundamentally different way. Cloud computing can be purchased in the form of Infrastructure as a Service, e.g., Amazon Web Services, Platform as a Services, e.g., Salesforce's Force.com or Google's App Engine, or Software as a Service, e.g., Salesforce, Workday, SuccessFactors, Coda, etc. The 150+ enterprises we've worked with use the cloud in many different ways to achieve their business objectives.

After developing a baseline understanding of cloud platforms and use cases, you can identify opportunities in your own portfolio. It's best to develop a long-list of opportunities (based on your pain points and priorities) and get started with a prototype. We've typically focused prototypes on areas that address an immediate pain point and are relatively self-contained. Examples range from an IT project portfolio management application (shown in the screenshots above), to a floor-level manufacturing capacity management application to a Gmail or Salesforce pilot.

Prototypes are critical to demonstrate the impact of cloud computing. We can talk about the benefits of cloud computing, but it's completely different to experience it in your organization. Whether it's the speed and ease of development on Force.com or the search experience in Gmail, experiencing the benefits first-hand creates significant excitement and drives momentum.

3) Roadmap and Impact
The final step is prioritizing the long-list of opportunities. We've typically done this by looking at the risk and reward associated with each opportunity and then sequencing the projects based on your appetite for risk and financial objectives. Turning the roadmap into reality will require a solid business case as well as a change plan for your organization. Prototypes go a long way toward demonstrating the benefits and can be used as real-life data points to support the business case. This makes the business case far more impactful than if it's based on academic assumptions.

Cloud computing is a significant mindset and skill shift within IT and more broadly within your business. To ensure success, it's critical to develop a communication and change plan, as well as a training program for your staff. When this is done well, we've seen IT teams energized and excited about the possibilities. Unlike traditional models like outsourcing, cloud platforms help IT teams get closer to the business, so there's plenty to get excited about.

Getting Started
Force.com Free Edition and Force.com Sites make it easy for companies to get started building applications in the cloud. We're excited to offer "Day in the Cloud" workshops to help accelerate this process. These 1-2 day workshops help you accelerate the cloud portfolio mapping process and quickly realize the benefits of cloud computing - quantifiable ROI, rapid time-to-value and innovation that drives the business.

Please email us at cloud@appirio.com or contact us with any questions about getting stated with cloud computing. We look forward to hearing from you!

Google Wave for the Enterprise

2009-05-29T08:46:00.001-07:00

Iein Valdez

Very exciting news from Google I/O over the last couple of days-- especially Wave, Google's vision for reinventing communication on the web. A lot has been written about the basics of Wave-- we like Mashable's summary and TechCrunch's analysis in particular -- but less has been written about Wave's implication for the enterprise. We thought we'd share some of our thoughts based on today's early look and our experience helping some of the largest companies in the world do more with Google technology.

Let's start with the obvious-- email (and collaboration in general) is far more of a problem in an enterprise than it is in people's personal lives. Filtering through hundreds of email messages every day has become an end in and of itself, instead of a means to getting real work done.

Gmail has been a much needed evolution in how we can do email at work-- features like threading, archiving, labels, instant search, and highly flexible rules and filters have already helped millions of workers get their jobs done faster.

Wave is the revolution-- changing the notion of what it means to communicate with colleagues and customers. By allowing a "wave" to morph from a traditional email to an IM to a wiki and back again as colleagues contribute to it, Wave will break down the silos of communication that define collaboration at work.

Perhaps most importantly, Wave is a platform. This is the most important part of yesterday's announcement for the enterprise. This will allow partners (including Appirio!), to turn Wave into a role-specific tool to get work done.

Imagine the following:

Project Waves: Bridge the gap between your under-used project wiki page and the day-to-day email and IM traffic among the project team. Get new project team members up to speed quickly by having them "playback" the critical waves in the project workspace.
Sales Waves: Collaborate on deals in an environment rich with context from your CRM system, embedded as gadgets within the wave. Turn everyone in your company into a member of a virtual account team that contributes ideas on how to do more business with your most important accounts.
Support Waves: Stop endless loops of customer support email. Engage your customers in a wave that evolves as their needs change. Resolve their issue faster, and create reusable waves for customers with similar problems.

Exciting days ahead for changing how work gets done in the enterprise-- especially when Wave is combined with a powerful back-end application platform like Force.com. We're excited to start playing with this exciting technology, and will keep you updated as we learn more. Leave a comment if you'd like to start a conversation about how to use Wave in your enterprise!

Do your most strategic apps belong in the cloud?

2009-05-11T08:29:00.001-07:00

Balakrishna Narasimhan

I've been in a number of conversations over the past few weeks where I've been asked which business processes or apps belong in the cloud.� There are obviously some technical considerations, but I'd like to focus on the strategic reasons for making the decision and how things have changed in the shift from traditional IT architectures to IT in the cloud.

Traditional IT department
In the past, the only way for a company to maintain control of their business process was to completely own the technology supporting the process.� The rationale was that a company's most strategic, differentiating processes are unique and therefore have to built by the company either from scratch or by heavily customizing packaged applications.� This also meant owning the entire technology stack supporting the process and the application.� So, while the intent was to create differentiated processes that were agile and differentiating, the reality has become that the technology stack is an albatross around the IT team's neck that prevents them from moving as quickly and as efficiently as they would like to.

The result is that while IT organizations are keen to support the business, they are unable to go much beyond providing basic services.� The solution to the problem of managing the entire stack was�traditionally either hosted/managed server services or outsourcing, but each introduces its own�problems.

Outsourcing
In the case of outsourcing, the enterprise gains cost savings but relinquishes control of their business process and has to adhere to the provider's "best-practice" process.� This clearly means that outsourcing can only be applied to commodity processes rather than any differentiating processes or processes where innovation is needed.� The IT team's role shifts to primarily vendor management with little ability to innovate or drive the business.

Hosted/Managed Servers
Hosting gets a bit closer to solving the problem because it reduces some of the IT team's pain in terms of managing infrastructure.� However, the IT team still needs to spend a lot of their time maintaining the application and the middleware stack, i.e., applying patches and bug fixes, implementing upgrades, maintaining integrations, etc.� In addition, the team also needs to manage their relationship with the hosting vendor.� So, again, the main impact is some cost savings but no real gains in terms of agility or ability to innovate or support the business.

IT department in the cloud
Cloud computing changes the decision process completely.� No longer do companies face a choice between relinquishing all control of their business process for cost savings or dealing with the high costs and complexity of supporting an entire software stack.

Platforms like Force.com and Google App Engine give companies a way to control the parts of the stack that matter most, the application and business process layer and abstract away the management of the infrastructure.� This means that the IT team can focus their energies on driving innovation and supporting the business.

A real-life example
In a past life, I was a partner at a major management consulting firm.� Since our business was our people, we believed strongly that our most critical processes were those that were related to managing our people, e.g., recruiting, employee performance management, compensation, project management, project staffing, etc.� The technology supporting many of these processes is available from outsourcers but we couldn't even consider those offerings because our processes were absolutely unique and core to our business.� The result was the that we spent significant amounts of money maintaining a brittle IT infrastructure that was great at running the business in a static state, but was difficult to adapt as we changed our business model, made acquisitions or entered new markets.

Fast forward to today at Appirio.� We run our entire business in the cloud.� A core part of our business is delivering professional services to our 150+ enterprise customers (and products to over 2500 companies).� We manage all aspects of our professional services business in a custom application running on Salesforce's Force.com platform.� The application is completely customized to our unique processes but runs in the cloud.� Therefore, we can quickly adapt the application as new needs arise and not worry about maintaining servers or managing infrastructure.� With no intervention from us on the infrastructure side, the application has supported our four-fold growth over the past year.� In addition, as we make changes to our internal organization structure or introduce new products or service offerings, we can make changes almost instantly.� Our IT costs less than a third of industry benchmarks AND we can run a better, more agile business.

That's why we believe that over time, companies should move not only their non-core processes but also their most strategic processes to the cloud!

Cloud Computing Savings - Real or Imaginary?

2009-04-16T17:11:00.001-07:00

Balakrishna Narasimhan

The venerable management consulting firm, McKinsey & Company, released a thought-provoking analysis yesterday on cloud computing economics. The piece has generated a fair bit of attention because it's been taken to mean that migration to cloud platforms is actually more expensive than what large companies currently spend on their own datacenters.

As usual, the problem is not in the analysis or the research but in the question that is being asked. The question that the McKinsey analysis answers is about the comparative economics between running your datacenter on your own hardware vs. running it on Amazon's hardware (offered as a service). We aren't going to question their analysis or numbers (we'll leave that to experts like Vinnie Mirchandani), but we also don't think this really answers the question about what cloud platforms can do for a business.

Cloud platforms exist at three levels (Click here to enlarge image)

At the lowest level, infrastructure-as-a-service is purely computational power for rent, which is what services like EC2 offer. It abstracts the physical infrastructure but you still need to do the work of mounting a database and an app server on the infrastructure, building and maintaining your app, etc. Therefore, the only savings are those that come from the delta between how efficient your datacenters are vs. those that Amazon runs. As you talk about large, well-managed datacenters that are operating at scale, it's plausible that savings are not significant.

It's at the next level, Platform as a Service, and beyond, that we start to see significant savings. Once you move up the stack to PaaS, there are significant savings because you no longer need to run a datacenter (physical or virtual as in the Amazon case) or maintain infrastructure software (database and app servers). Within our 150+ customers, we see savings of over 30% on operating costs and 2-3x improvements in time-to-market when building on cloud platforms. For example, for a publishing client, we built a custom application that automated the entire publishing process in less than 6 months. Their estimate for doing this using on-premise platforms was over 3 years. In terms of ongoing cost/productivity improvements, they have estimated a 50-75% reduction in the time and effort it takes to add new products. Additionally, since the application is built on the Force.com platform, upgrades are seamless and the platform gets better over time, all for no additional cost.

At the highest level of the stack, the benefits get multiplied further, since you get all the benefits of PaaS, plus you get freed from 22% maintenance and costly (to implement) upgrades every 3-5 years. The savings have been well documented: 25-40% in terms of implementation costs (by freeing yourself from the clutches of the dreaded Globals SIs) and operating cost savings, e.g.,50%+ savings running your mail on Google vs. Exchange.

Cloud platforms provide savings at each layer of the stack, and McKinsey's analysis focuses on just the lowest levels of the stack, thus missing most of the savings potential.

We have seen the benefits of cloud platforms first-hand at over 150 customers, including companies like Avago, Genentech, Japan Post, Qualcomm, Starbucks and Dolby. Once customers experience the benefits of cloud platforms - quantifiable savings, rapid time to value and innovation that drives the business, they seldom want to go back. This is why 90%+ of customers plan to increase their spending on cloud platforms. In these economic times, there is no greater vote of confidence for cloud platforms than that!

A View from the Tipping Point

2009-04-16T09:00:00.000-07:00

Dave Orrico

Read the Press Release On Dave Orrico and Jim Emerich Joining Appirio Leadership

Over the last 20+ years I have had the privilege of helping sell and deliver technology to many fantastic companies. When I first joined salesforce.com, I knew something was different. SaaS (which is quickly morphing into cloud computing) was something much more than just another technology change. It was a new model that forced a renewed focus on customer service and once again put the customer (not the vendor) at the center of value.

Nearly six years have passed since then, in which I had the opportunity to interact with leaders at many of salesforce's most strategic accounts - Dell, ADP, Bank of America, Cisco, Citibank and many others. The business benefits we were delivering to these companies were remarkable when contrasted with the legacy alternatives, but I was even more struck by how the SaaS model made it so much easier to align a company around serving the customer. Because we earned the customer's business through subscriptions (vs. big up front licenses), I never had to fight uphill internally for my customer's best interest.

The market is finally starting to see something that Marc (Benioff) has been saying for some time - that salesforce.com's success is about more than it being a great company. In fact, it's the fundamental advantages of cloud computing for both the vendor and the customer that have allowed it to prosper. Google Apps, Amazon Web Services, even Facebook are using those same core tenets to expand their services to the largest companies in the world.

We've reached the tipping point. It's becoming clear that most companies will eventually shift to this new model, and this is what made Appirio such an exciting opportunity for me. Here is a company focused from its inception on answering not "if people will make the switch to the cloud", but "how can we help them get there." While at salesforce.com, I admired Appirio's passion and commitment to cloud computing; and their focus on building trusted advisor relationships with both their partners and their customers.

I joined Appirio to help accelerate this transformation to the cloud and to create a new breed of company that could pragmatically answer customers' tough questions on how they can get there (benefits of the cloud). I truly believe we are at a transformational point in the evolution of IT; analogous to the change and benefits that the Internet brought to us as individuals. The Internet has had a profound impact on the the way we find things, shop, create and even interact. Cloud computing can have the same level of impact on business. I want Appirio to be your trusted advisor in your journey to the cloud, and help unshackle your entire business from the constraints of the past.

Google's Campfire for App Engine Warms the Cloud Ecosystem

2009-04-07T21:06:00.001-07:00

Ryan Nichols

Appirio was thrilled to participate in tonight's Campfire One event, hosted by Google to showcase the new capabilities of Google App Engine (covered here). Google gave 3 partners (IBM, Oracle, and Appirio) early access to these capabilities, and asked us to kick the tires. We used this opportunity to develop a lightweight applicant tracking application that extends our Viral Recruiting product.

Bottom line? We were impressed with the capabilities of the platform, and look forward to using Google App Engine to help our customers do more with the cloud.

Read more about our technical experience with App Engine here, and more about Appirio's App Engine offerings here. In this post, we wanted to highlight why we think the new capabilities of Google App Engine are important for the industry.

Google complements existing cloud platforms

At Appirio, we make our living building custom and packaged applications using on-demand platforms. While there are dozens of different companies claiming to offer on-demand platforms, there's been a well recognized gulf between the 2 leading enterprise-oriented platforms, Force.com and Amazon Web Services.

Most of our application work for customers is done on Force.com-- a rich application platform with built in business objects that allow our applications to inherit a broad swath of functionality. But some applications don't require this functionality, and would benefit from greater control and direct access to "lower levels" of the platform. At the other end of the spectrum is Amazon Web Services. S3 and EC2 are powerful because they give application developers the ability to control their own infrastructure without the headaches of hardware ownership. But many applications don't require this level of control of the infrastructure-- a higher level of abstraction would make development more efficient.

With tonight's enhancements, we see Google App Engine filling the void between these two market leaders. There's no built-in notion of business objects, leaving Force.com the go-to-choice for most of the process-centric applications we build for customers. But App Engine offers abstraction over several layers of infrastructure that we'd prefer not to deal with in the applications we build today on EC2-- not having to worry about the size of the machine we spin up, for example.

With App Engine's new capabilities, we're excited to add Google App Engine to the set of tools we use to help our enterprise customers do more with the cloud. TechCrunch asked several weeks ago whether we are "on the verge of a new set of platform wars that will make the Windows vs. Mac war look like Tiddlywinks? Or will all the different cloud platforms which are emerging create an interwoven fabric of Web applications that draw from each cloud as is convenient?"

We've argued before our belief in a future of connecting the clouds, NOT cloud warfare. That's what makes today's announcements on App Engine so exciting.

Google is keeping its friends close, but its enemies closer

Marc Benioff, CEO of Salesforce.com, has reminded us of the real battle going on in cloud computing today: "The real platform war is still against the old paradigm. The masses out there don't know that they don't need to buy software and hardware anymore."

For that reason, we took particular delight in seeing IBM and Oracle participate in tonight's Campfire. Let's look at what they demonstrated:

Oracle's Social CRM VP showed us Google gadgets operating with on-premise Siebel data. Remember that this very same functionality was demonstrated almost two years ago (by Appirio), using Google Gadgets and Salesforce.com. Exhibit A in the differing rates of innovation between on-premise and on-demand software. But we're glad Oracle has caught up. Why? Because once Siebel is relegated to be the on-premise data store for a rich set of online gadgets, the benefits of replacing this on-premise backend with a modern on-demand platform will be clear.
IBM's Cloud Strategy practice showed us how easy it is to port an application from Google App Engine to WebSphere. This is very cool to see, but for the opposite reason than they intended: Anyone care to predict how often companies will be moving off the low cost, highly scalable App Engine environment and onto WebSphere versus the other way around? Application portability is an important topic, and we're glad to see IBM contributing to the conversation... even if it is a bit jarring to see a WebSphere Server running at a Campfire event.

Most important of all? The simple fact that Oracle and IBM are on-stage, endorsing Google's vision and integrating App Engine with their offerings...even if it is to integrate with on-premise applications. Their very presence validates for every enterprise the fact that cloud computing will play an important role in their IT infastructure.

And that's the real point. As that message gets through to the Fortune 500, today's Campfire will indeed burn bright enough for all of us in the cloud.

Server Sighting at Google Campfire: Why is there an on-premise server on stage with our colleagues from IBM and Oracle?

Cloud Computing - the next evolution or another dot com?

2009-03-16T11:52:00.000-07:00

Balakrishna Narasimhan

Right now "Cloud Computing" inspires more emotional and conflicting responses from IT consumers and providers than any other. Amongst one of the fastest rising search terms on Google, its most often accompanied by the words "what is." Goldman Sachs tells us that "software continues its unstoppable shift from on-premise to on-demand delivery" - while panels of technology visionaries evaluate if it's today's dot com.

Everyone seems to recognize that there's a fundamental shift that's taking place in the industry. However, there's still a lot of confusion about what "cloud computing" actually is and why it's relevant to customers now. Some want a future based on the past, others contend that there must be a clean break. The reason for this confusion is because everyone in the IT industry has recognized that words do matter and will define the paradigms under which they operate. Thus we end up with many trying to redefine "cloud computing" to support their strengths.

Company	What they say	What they really mean
IBM	"Private" clouds offer many of the same benefits as "public" clouds but are managed within the organization. These types of clouds are not burdened by network bandwidth and availability issues or potential security exposures that may be associated with public clouds. Private clouds can offer the provider and user greater control, security and resilience. [More ]	Cloud computing is a better datacenter
HP	Cloud research is focused on delivering an application and computing end-state of Everything-as-a-Service: billions of users, accessing millions of services, through thousands of service providers, over millions of servers, processing exabytes of data, delivered through terabytes of network traffic. [More ]	Cloud computing means more hardware and networking
Oracle	"We�ve redefined �cloud computing� to include everything we currently do. So it has already achieved dominance in the industry. I can�t think of anything that isn�t cloud computing." [More ]	Cloud computing is nothing new
SAP	"the integration of on-site and off-site software on the vendor's "loosely coupled, asynchronous" SOA platform" [More	Cloud computing is a better Enterprise SOA
Microsoft	"The future is a combination of local software and Internet services interacting with one another. Software makes services better and services make software better. And by bringing together the best of both worlds, we maximize choice, flexibility and capabilities for our customers. We describe this evolutionary path in our industry as Software + Services." [More ]	Cloud computing is desktop software, enhanced with internet-delivered data and access
Google	"It starts with the premise that the data services and architecture should be on servers. We call it cloud computing � they should be in a �cloud� somewhere. And that if you have the right kind of browser or the right kind of access, it doesn�t matter whether you have a PC or a Mac or a mobile phone or a BlackBerry or what have you � or new devices still to be developed � you can get access to the cloud" [More ]	Cloud computing is internet-enabled apps on a massively scaleable platform
Salesforce	"Cloud computing offers almost unlimited computing power and collaboration at a massive scale. With Force.com Platform-as-Service, we are providing the necessary building blocks to make cloud computing real for the enterprise." [More ]	Cloud computing is SaaS + PaaS
Amazon	"cloud computing is that you can have all the resources that you want, could be storage, compute, networking, with an infinite amount of capacity, available to you to use on the internet, the only thing you need to use it is a credit card" [More ]	Cloud computing is raw computing power, storage and networking as a service

It's enough to make anyone's head spin. Let's first look at some of the key elements of cloud computing in terms of the benefits to customers, since that's ultimately where the rubber hits the road, especially in these economic conditions.

Focus on the Business Process Layer of the Stack - Stop worrying about provisioning/managing/maintaining hardware, networking and middleware
Pay for what you use, scale up and down smoothly - Purchase computing and application (process) capacity in granular increments. Convert capital expenditures to operating expenses - this allows improvements to business processes even in today's capital constrained environment
Benefit from multi tenancy - Get the latest features and enhancements without expensive upgrades - build applications that get better over time without incremental effort from you
Speed up development time - make agile development a reality with rapid prototyping and iteration (because of #3)
Access applications and data from anywhere on any device - make the virtual office a reality
Mash together data from different sources to create new business processes - Because cloud platforms are multi-tenant and meant to prevent breakage via upgrades, it is possible to create stable integrations which lead to new categories of business applications, e.g., combine social graph data with lead information or share real-time data with partners - create more flexible and innovative processes

There are three technical enablers that are critical to realize the benefits above:

Shared infrastructure and middleware on massively scaleable shared infrastructure
A multi-tenant application platform
Open, standards-based APIs

Here at Appirio, we are dedicated to helping companies do more with cloud computing. That's why we partner with companies like Salesforce, Google, Amazon, and Facebook, who are truly delivering on the promise of cloud computing . We help our clients steer clear of near-cloud concepts like "private cloud" and "software + service" because we believe they mitigate or eliminate many of the benefits of cloud computing.

Having served over 120 enterprises and having worked with Salesforce and Google on some of their largest accounts (e.g., Japan Post, Avago, Genetech), it is clear to us that a meaningful definition of cloud computing can drive incredible value for customers. In the coming months we look forward to providing more concrete examples of how the cloud can drive real value for large enterprises, even through these turbulent times.

Whose cloud is it anyway? Appirio's takeaways from presenting at TechCrunch's Cloud Computing Roundtable

2009-03-02T10:27:00.000-08:00

Ryan Nichols

We were invited to demonstrate our Referral Management Solution at Friday's Cloud Computing Roundtable, put on by TechCrunch. The provocative title of the event was "Whose cloud is it anyway?", and TechCrunch invited a who's who in cloud computing to help resolve the issue.

TechCrunch asked this question ahead of the event : "Are we on the verge of a new set of platform wars that will make the Windows vs. Mac war look like Tiddlywinks? Or will all the different cloud platforms which are emerging create an interwoven fabric of Web applications that draw from each cloud as is convenient?"

Our presentation was meant to illustrate that we firmly believe in a future of connecting the clouds, NOT cloud warfare. The Referral Management Solution we demonstrated happens to draw on the capabilities of 4 different on-demand platforms: We use the workflow and process management of Force.com, the social graph of Facebook, the computing power of Amazon EC2, and the communication and collaboration capabilities of Google Gadgets. Thanks to these platforms, Appirio was able to focus on solving our customer's problems, NOT rebuilding these underlying capabilities. Best of all? Our customers don't need to know where our application runs in order to capture the benefits.

This is definitely a new model of delivering applications. Because we use the platforms of others, much of our solution is invisible. Our users think they are using Salesforce and Facebook, not "Appirio." This naturally brings up the type of questions we got from the judges on Friday: in essence, do you need to own a platform in order to build an interesting business on the cloud? Our view? Of course not. Interesting companies result from solving important problems. If you don't have to start from scratch, even better.

The roundtable discussion afterwards illustrated how much cloud computing has already changed the business of writing applications. Our favorite (paraphrased) quotes from the round table illustrating this point:

Vic Gundotra, VP Engineering at Google, on the idea of cloud warfare: ""Paradigms of the past skew our vision of the present-- that's what's going on here. Maybe 10-15 years ago, the platform you were on influenced the applications you could run. Platform lock-in really mattered. The Internet has changed that. Through the web, we've created a platform that's open enough that you can just expect these apps to work together."
Gina Bianchini, CEO of Ning, on the question of whether startups should use cloud platforms: "Markets are moving so much faster today. If you make the decision to use the old paradigm, not only are you spending a lot more money, you just can't compete."
Paul Buchheit, Co-founder of FriendFeed and creator of Gmail, on the power of bringing together multiple cloud platforms: "The Internet is a single computer. When working with one machine, I no longer need to worry 'where is my data'-- end-users don't need to care"
Amitabh Srivastava, Corporate VP of Windows Azure, laying out a surprising perspective on the future of cloud platforms: "I think you'll see a new set of platforms come in, each will be open and inter-operable."
Werner Vogels, CTO of Amazon: "The real value comes from aggregation of these resources...this will enable a whole new generation of applications that could never be built before."
Lew Tucker, CTO of Cloud Computing at Sun Microsystems, on whether interesting businesses can be built on the cloud platforms of others: "The next Google is going to be built on the cloud. If you were starting today, you'd start directly on the cloud."

The consensus from the roundtable on these points was so strong, that the topic of "platform warfare" was almost taken off the table. It took Marc Benioff, CEO of Salesforce.com, to remind us of the reality at most companies today. "The real platform war is still against the old paradigm," he reminded us. "The masses out there don't know that they don't need to buy software and hardware anymore."

Even those stalwarts of the old world, SAP and Oracle are starting make more SaaS/PaaS noise . A topic we'll explore further later this week as part of our 2009 predictions series.

You can watch the entire three hours of the event here.

You can also watch it on co-presenter's ooyala's neat player.

C is for Cloud: Appirio raises Series C from GGV and Sequoia

2009-02-25T06:00:00.000-08:00

Chris Barbin

Given today's headlines, we're humbled to announce our Series C funding from GGV Capital(formerly Granite Global Ventures) and�Sequoia Capital.� Amidst all the uncertainty confronting business and IT in today's economic climate, one thing remains certain: enterprise IT is moving to the cloud.� That single idea is at the core of Appirio's business, and is an idea that's worth investing in precisely because we're in the worst spending environment any of us can remember.

The headlines for most venture-backed startups are grim: "Tech start-ups call it quits," writes the Wall Street Journal, as GigaOm describes "VCs sowing panic in their portfolio companies."�� We remember the buzz created by Sequoia's all-portfolio meeting last fall, featuring a picture of a slaughtered pig with all the fat removed.�

Why is Appirio growing so dramatically in this environment?

Our market: Far more important than anything about Appirio's business is the market opportunity that we've targeted.� Cloud computing will disrupt $1 trillion of IT spending-- great things happen when you're able to accelerate an industry transition of this magnitude.
Our model:�New markets call for innovative business models.� Traditional wisdom says you have to choose whether to be a services company or a product company.� We believe that the availability of web platforms makes a truly hybrid business model not only possible, but advantageous.� Consider our new product offerings in 2009, Services Management and Facebook Referral Management�--� neither would have been possible without the opportunity to directly serve and learn from leading customers in these markets.� Our model of delivering high end professional services, innovative software products and compelling cloudsourcing solutions is what we like to call a 'next generation IBM without the baggage of hardware'.� Customers need alternatives to the Global SI's and traditional enterprise software - our hybrid model directly addresses that need and has delivered repeatable results for our customers.
Our team: There's something special created when you assemble a team of professionals passionate about transforming an industry.� We've been able to quadruple the size of our team in the last 12 months (and remain hiring now), because our #1 goal has been to hire the best and brightest change agents in the industry.� "The Appirio Way " comes through in every interaction we have with customers and partners, whether through sales, services, support, or R&D.�

Its a cliche that the easiest time to raise money is when you don't need it.� Appirio's business model is strong and our services business has been profitable since our founding in October 2006.� We create substantial value for our clients and share in the rewards of their success.��

But it is still "early days" in the business of accelerating the adoption of�on-demand in the enterprise, and we're excited to have our new partners at�GGV Capital on-board.� GGV specializes in deploying expansion capital, and today's investment from GGV and Sequoia Capital will be invaluable in our continued efforts to invest in products built on Force.com & Google App Engine, supporting and evolving our team of cloud computing professionals and investing in and innovating along side our strategic partners Salesforce.com, Google and Facebook.�

Consider, for example, our other announcement today-- Appirio's expansion into Japan, the second largest IT market in the world, barely penetrated by traditional packaged application vendors.� We believe that Japan has the opportunity to completely leapfrog on-premise packaged software and migrate directly to custom applications developed on an on-demand platform.� Being part of this process (and the largest Force.com deployment in the world) is tremendously exciting.�

We invite you to get involved.� Schedule a discussion with us, take a trial of one of our products, look into joining our team, or even just contribute an idea.� The transition to cloud computing is one thing to be certain of, even in these very uncertain times.� We look forward to working together!

The 'Value' of Friendship

2009-02-02T17:06:00.001-08:00

Narinder Singh

Today, Appirio released our new Referral Management Solution. You may have seen some of the positive coverage of the product already, but we wanted to provide a deeper look into why we created it and why it's so valuable for helping enterprises connect with customers, partners and employees in a Web 2.0 world.

In a world that is more interconnected than ever and that offers more information than people can actually consume, the commercial value of 'friendship' and word of mouth referrals is at an all time high. This is why LinkedIn has become such a boon to recruiters looking to fill open job positions. Why enterprises are investing in social software both inside and outside company walls. And why recent PEW research shows an increasing number of adults choosing to join Facebook, which is already up to 150 million users and growing every day.

Over the past two years, Facebook has become the medium for keeping large networks of people up-to-date on your life. Facebook is a different animal than LinkedIn, where user profiles are mainly updated only when someone is looking for a job change. On Facebook, contacts are kept up-to-date on your life by default - the events you're going to, what you're reading, your personal and professional interests and more. This, combined with a more open approach to interfacing with other applications, ultimately makes Facebook a better opportunity for companies looking to tap into the value of these networks to hire new employees, spread the word about new offers, build brands or solidify relationships.

HOWEVER, there must be a careful balance in tapping into the commercial value of a friendship. In the physical world, we are appreciative when a friend recommends a potential career connection, a valuable discount, or a product they think you might like. Yet we can feel repulsed when we know someone is using the guise of friendship just to try to get something out of us. Interacting with online social networks requires preserving the same level of trust and integrity.

That's why when Appirio created our Referral Management Solution, we had two key prerequisites: to maintain the trust inherent in these social networks and to provide relevant value to users (as well as companies). This is why we designed our solution to:

Give the user full control over every decision to make a referral. The user decides whether to install the application and when to act on recommendations that the app surfaces in Facebook. This SlideShare presentation on the solution describes in more detail how this works.
Encourage people to make referrals because they make sense, not simply for the reward. The application helps make recommendations that are most relevant to your friends. After all, it's the quality of the product, service or offering that will ultimately determine how often it's referred and who chooses to act on it.

Appirio's new solution is designed to help companies tap into the commercial value of friendships by incorporating the use of social networks in a mature and responsible way. The days of email spam, where marketers send thousands of useless emails with abysmal response rates are (hopefully) fading. For despite generating a return for the spammer, the net result of mass email on the entire community of recipients is decidedly negative. We instead relate our solutions to a next-generation Nielsen. Without interfering with the experience of the end-user, we allow them to make judgments on what they are seeing and make referrals to their friends.

For these types of viral and word-of-mouth campaigns to work, we also believe it's important for companies to have a way to manage and measure the effectiveness of their approach. Our new solution looks to address this issue by providing the ability to understand how your users talk about your product through recommendations, and offering native integration to back-end enterprise systems so companies can quantitatively measure the effectiveness of these campaigns.

We hope Appirio's Referral Management Solution can help people find jobs, learn about products and services their friends love, and allow companies to listen better to their customers, partners and employees. After all, those attributes are as timeless as the value of friendship itself.

Short the Global SIs

2009-01-28T06:30:00.000-08:00

Global SIs Continue to Struggle with SaaS � Enterprise Executives Abandoning Accenture, Cap Gemini, & TCS

Chris Barbin

In January of 2007, we published an article, Services 2.0, which highlighted the shifting sands in deploying SaaS solutions such as Salesforce.com, Google Enterprise and Amazon Web Services. Two years later, 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.

In this down economy, we have seen a dramatic shift of enterprise customers looking to accelerate their SaaS & cloud computing initiatives--they have seen results from prior efforts and are eager to expand efforts to "do more for a lot less." Having served over 100 enterprise customers including Dolby Laboratories, Qualcomm, Harrah�s, Starbucks, Genentech, Plantronics, Japan Post and others, Appirio has seen a continued movement from simply replacing one or two on-premise apps with their SaaS alternatives, to enterprise-wide, C-level mandates. Here's some of the things we're hearing customers demand:

"Eliminate 15% of our IT spend with SaaS"
"Cut $100M in expenses by moving to the cloud"
"Help us define a path to the server-less enterprise within 3-5 years"

When confronted with these mandates, the Global SIs that we see and hear competing for these deals seem flat-footed and ill-equipped, trying to meet these new challenges with dated on-premise technology and techniques. In the past 60 days alone we have witnessed 3 examples of this:

Global SI #1: Quoted a basic SFA, Call Center and Partner Portal implementation for a $1B manufacturer @ nearly 3X the necessary amount. To justify its high cost of sales and hamstrung delivery model, the bid "added" unnecessary roles and services. They could not adapt to new rapid and iterative development methods - now a standard in SaaS development and deployment.
Global SI #2: Quoted a global SFA requirements phase at 1.5X the necessary cost EVEN WITH A LOWER AVERAGE HOURLY RATE. Again, a dramatic misunderstanding of how to define requirements in a SaaS world, compounded by a lack of repeatable assets, IP and methodologies for SaaS deployments.
Global SI #3: Quoted a PaaS initiative for an existing customer @ 2X its necessary amount. In this case, the quote was driven by a combination of exorbitant rates, a comfort level with an established client, an army of under-utilized resources already on-site, and a blatant misunderstanding of how to define, develop, deploy and support a PaaS initiative.

We see this list of examples growing every day, and it does not even include the dozens of customer relationships where 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. The discussion around "private clouds" is a perfect example-- Global SIs trying to teach an old data center new tricks.

More evidence? Search the discussion groups and forums for relevant case studies and success stories from these companies. While Accenture, Cap Gemini, TCS and others claim strategic partnerships and deep SaaS practices and expertise in cloud computing, the facts and relevant case studies prove otherwise. A few examples:

A quick search in the Salesforce.com developer discussion forum for "Accenture" yields a grand total of 49 hits, "Cap Gemini" 30 hits and "TCS", 25 hits � for a total of 104 hits. The equivalent search for Appirio and our competitors yields well over 1,000 entries.
The number of solutions offered by the Global SI community on Google Enterprise Solutions Marketplace � ZERO. When the TCO of the Google Enterprise solution is 1/10^th the TCO of Microsoft and/or Lotus Notes, is this any surprise?
The number of enterprise SaaS success stories and testimonials on the Global SI�s websites � less than 10 based on our review. Appirio and our competitors have well over 200 true enterprise success stories.

When we launched Appirio just over 2 years ago, we suspected that the Global SIs would "get it" in 2-3 years, have significant assets, teams and relationships in the world of SaaS -- luckily, we are being proven wrong. Our new forecast, we have at least 2 more years. Or, perhaps Global SIs won�t ever be able to disrupt their traditional business, and the new Services 2.0 players will continue to outbid, out-deploy and out-innovate. If we are missing something and there is evidence of real SaaS growth at the Global SIs � we�d love to hear from you.

UPDATE, 3/11/09: We were flattered to receive a request from Accenture to remove their copyrighted image of Tiger Woods from this post. We are more than happy to comply-- we replaced it with this creative commons image.

UPDATE 2, 3/11/09: After the above, we received another request to remove Tiger's image altogether (from his people). We certainly never mean to cause the commotion, just to point out that Global SIs are focused on the wrong things, and they are lacking in getting behind something that genuinely is better for the customer.

Are you In? Unshackling Your Aspirations.

2009-01-22T12:27:00.000-08:00

Narinder Singh

Certain points in time provide a special opportunity to reflect and aspire to be better. For many of us, this comes with each new year - as we make resolutions to improve some part of our lives or who we are. As a nation, inaugurations provide a similar chance. In these moments, the collective consciousness of a country can define their resolutions for the future.

The Starbucks I'm In campaign has a simple idea, "What if we all did something". Leveraging an incredible brand with reach into nearly every community; partnering with voices for change like the Hands On Network, Service Nation (and even Oprah !); and doing more than just talking about corporate responsibility - the I'm in campaign can play a powerful role in placing service into the collective psyche of a nation.

Pledging five hours of time to giving back and celebrating the commitment with a free cup of coffee is a simple first step. Undoubtedly those hours can have a substantial impact on the world around us. But the ripple of change caused in each person who participates is the real trojan horse of this strategy. How many of us have said, "Helping out at the food bank / hospital / children's center / halfway house / community organization gave me a better sense of what's really important in life?" Giving back can change how we interact with our family, neighbors, co-workers and broader society. Inspiring us to do this collectively can make the question "How are you helping?" as ingrained in our common sense of what's normal as asking a person about their job, home, hobbies, place of worship or favorite sports team. That's the big idea that can start with a simple pledge.

Appirio was fortunate enough to be a part of Starbucks' vision by helping them use Force.com to tap into this collective voice. The press release describes what we built and the site itself provides a window into the details.

Yet what is most powerful about this story is how the cloud helped unshackle the creative minds at Starbucks from the legacy constraints of technology. Brilliant teams of people at Starbucks and the Salesforce.com Foundation thought about how connecting people could help them with their lofty vision. Their first, second or third thoughts were not on the mundane details of how to scale hardware/software/networks to accomplish this. They didn't have the luxury of reinventing an architecture for integration. They did not have the option of being constrained to a waterfall approach that would expect the "requirements" be defined at the onset of the process. Instead "Building on the Cloud" with Force.com let them focus on the user experience and allowed one creative idea to build on another throughout the process.

We have written before that the future of how people in a business work together will be defined by understanding how people collaborate when they're not working. A connected world requires that technology be built in a way that allows information, processes and ideas to be shared and collectively improved. Facebook, Google, Amazon, Wikipedia, Twitter, YouTube and others have led the way in proving the power of the collective. Salesforce.com, Google Enterprise and other dedicated pure SaaS vendors bring that same vision to businesses. No longer can organizations settle for systems that are designed to be physically and emotionally closed. The opportunity to bring together your people, your partners, your customers...is just too important to constrain. We hope everyone will be inspired by I'm In. Most importantly to instill a sense of giving back into our collective consciousness, but also as an inspiration for how the cloud can help companies dramatically change their own futures.

We're In, are you ?

2009 Prediction - Rise and Fall of the Private Cloud

2009-01-15T15:17:00.001-08:00

#6 in our series of 2009 predictions

2008 Recap

2008 saw massive hype around the concept of a �private cloud,� roughly defined as a adopting the technology and practices from public cloud providers for a single company behind the firewall. �Private clouds are the future of corporate IT� declared Gartner. �Private Clouds Take Shape,� gushed InformationWeek, citing the funding of companies like Elastra and Parascale. �Get off my cloud� said eWeek, questioning the security of public cloud environments compared to private clouds.

2009 Prediction

Here�s the rub: Private clouds are just an expensive data center with a fancy name. We predict that 2009 will represent the rise and fall of this over-hyped concept. Of course, virtualization, service-oriented architectures, and open standards are all great things for every company operating a data center to consider. But all this talk about �private clouds� is a distraction from the real news: the vast majority of companies shouldn�t need to worry about operating any sort of data center anymore, cloud-like or not.

The idea that somehow companies can use �private cloud� technology to offer their employees web services similar to Google, Amazon, or salesforce.com will lead to massive disappointment. Here�s why:

Private clouds are sub-scale: There�s a reason why most innovative cloud computing providers have their roots in powering consumer web technology�that�s where the numbers are. Very few corporate data centers will see anything close to the type of volume seen by these vendors. And volume drives cost�the world has yet to see a truly �at scale� data center.
You can�t teach an old dog new tricks: What do you get when you move legacy applications as-is to a new and improved data center? Marginal improvements on your legacy applications. There�s only so much you can achieve without truly re-platforming your applications to a cloud infrastructure� you can�t teach an old dog new tricks. Now that�s not entirely fair�. You can certainly teach an old dog to be better behaved. But it�s still an old dog.
On-premise does not equal secure: the biggest driver towards private clouds has been fear, uncertainty, and doubt about security. For many, it just feels more secure to have your data in a data center that you control. But is it? Unless your company spends more money and energy thinking about security than Amazon, Google, and Salesforce, the answer is probably �no.� (Read Craig Balding walk through �7 Technical Security Benefits of Cloud Computing�)
There�s no secret sauce: There�s no simple set of tricks that an operator of a data center can borrow from Amazon or Google. These companies make their living operating the world�s largest data centers. They are constantly optimizing how they operate based on real-time performance feedback from millions of transactions. (check out this presentation from Jeff Barr and Peter Coffee at the Architecture and Integration Summit). Can other operators of data centers learn something from this experience? Of course. But the rate of innovation will never be the same�private data centers will always be many, many steps behind the cloud.

There�s also something very suspicious in all this discussion of private clouds�. private clouds are advocated mainly by companies who make their money from selling or operating data centers, and risk losing their shirts as real cloud computing drives more and more computing onto shared infrastructure. I understand why these companies are reluctant to embrace true cloud computing: Imagine being the junior partner in IBM Global Services pitching a client to develop an application on Amazon, Google, or Salesforce. Not only are you taking money out of the pocket of your colleagues in hardware and software�.. you are also taking money out of the pocket of your colleagues in professional services, since integration and app development are so much easier using on-demand platforms.

That�s not to say that there�s no place for the technology behind private clouds. In certain cases where it simply isn�t an option to utilize a public cloud, this technology can have a significant impact. But those use cases are few and far between, and the benefits to be achieved are insignificant relative to the benefits of moving to a public cloud. Here�s who should be thinking about private clouds:

Cloud Providers: This is an easy one� companies that plan on being in the business of providing cloud computing capabilities to others need to think about how to effective provide their own cloud. But we�d argue that very few companies actually need to be in this business (e.g., we believe most on-demand BI vendors should be running on public cloud infrastructure).
Highly regulated industries: Government regulation will always lag behind commercial application of technology. There will inevitably be instances where nervous politicians or policy makers write up requirements that can only be met through a private cloud.
Companies in the process of moving to a public cloud: Of course, no company of any significant size can move its IT infrastructure to the cloud all at once. In fact, Appirio specializes in helping companies figure out what the right first step is away from their on-premise infrastructure. For the IT infrastructure that hasn�t yet moved, it definitely makes sense to think about how to use �private cloud� technology. But that means the private cloud is a temporary stop-gap, not the �future of enterprise IT.�

Implications for customers.
Of course any customer with a data center should be thinking about how to use the technologies behind �private clouds� to improve their efficiency. But this should be a minor element of your long-term IT strategy. The most important thing any IT department can do in 2009 is chart out a thoughtful plan to migrate significant portions of your IT infrastructure to the public cloud. Don�t let �private clouds� be a distraction from that goal.

2009 Prediction: Google doubles down on the Enterprise

2009-01-07T13:05:00.000-08:00

#3 in our series of 2009 predictions

2008 Recap

2008 was a fantastic year for Google's enterprise apps. They successfully made the transition from something small companies might dabble with to apps that large corporations rely on. In 2008, large corporations like Genentech and government organizations like DC government successfully made the transition to Google apps and became public advocates.

2008 was also a year of great innovation for the rest of Google's enterprise-relevant technology, with the introduction of their App Engine development platform, great new APIs like the visualization API and significant new features like adding video to Gtalk. Google also got serious about becoming part of the enterprise application ecosystem. They did this through integrations between Google Apps and Salesforce.com in April, and integration between App Engine and Force.com, late in the year.

2009 Prediction

We believe that 2008 was an inflection point in Google's adoption in the enterprise, particularly for mail and calendar. Google will double down on the enterprise in 2009 and see massive adoption. We believe this will be driven by 4 things.

Google continues to demonstrate commitment to the Enterprise
Google has publicly highlighted the enterprise as a strategic area in 2009. They have also made concrete moves to address enterprise needs, including obtaining SAS-70 certification, integrating with Enterprise class clouds like Salesforce and providing SLAs. We expect this to continue and accelerate in 2009 with expanded offline access, greater support for enterprise-class programming languages and more. Google's mission is to organize the world's information. Much of that information is generated as we all go about our daily jobs-- those who suggest that Google isn't serious about the enterprise have too narrow a view of their ambition.

Economic conditions drive evaluation of alternatives to Office/Exchange
Companies everywhere are re-evaluating their budget in the light of the stormy economy. In this environment, companies are scrutinizing all spend, particularly spending on non-strategic activities. Mail and Collaboration software, while necessary, require a disproportionate effort and cost for most IT departments. CIOs, who will be under pressure to do more with less, will be more open to evaluating alternatives to Exchange and Sharepoint. Forrester recently released a report titled "Should your email live in the cloud?" (More detail from RWW). The answer for nearly all companies was an unequivocal "YES."

Source: Forrester

Enterprise references establish Google as a viable alternative
Google adoption and endorsement by the Genentechs and DC Govts of the world are changing the way CIOs think about Google apps. They're no longer a curiosity but a viable alternative to Exchange. We've seen this shift over the course of the year in our own client base. Earlier in the year, questions were raised about about whether Google's corporate culture is really "enterprise ready." We stand by our assertion that it is the culture of traditional IT vendors that is no longer fit for the enterprise.... and predict that more and more of the world's largest companies will agree with us.

Google apps functionality leapfrogs Exchange
One of the barriers to Google apps adoption has been companies fearing that their users will have to adjust to a lower level of functionality because of the shift to Google apps. While this might've been true in the past, Google has not only closed the gap but actually provides a superior experience for core messaging. A few key advantages are large mailboxes (10s of Gigabytes per user), the ability to search all messages using Google's fantastic search capabilities, native iPhone/Blackberry access and integrated chat/video chat. And these features are available instantaneously: when Google introduced video chat, our clients started using it that same day. In an on-premise world, this would've required upgrades to each instance of the software before it was available to all users at the company.

Implications for Customers
Google apps are here to stay and are a viable, potentially superior alternative to Microsoft Office/Exchange. However, there are two important caveats. First, Google Apps, while sufficient for the needs of 80% of a company's business users, will likely not completely replace Microsoft Office, especially Excel and Powerpoint. Here at Appirio, we continue to use Office for a lot of our document creation, but then move documents to Google Apps to share, revise, and present (instead of using email and GoToMeeting).

Secondly, mail and calendar migration is non-trivial from both a technical perspective as well as organizationally. So, careful planning and a sequenced approach incorporating pilots are critical to success. We've held Google Apps "Bootcamps" to explore these issues, with speakers from companies like Genentech talking about their success (click here for a video).

What do you think?
Which of our predictions do you agree or disagree with? Please let us know by voting in our poll or commenting below.

2009 Prediction: Business Intelligence goes SaaS

2008-12-26T14:13:00.001-08:00

#7 in our series of�2009 predictions

2008 recap

Business intelligence is an unsolved problem.�At every company we�ve ever worked with, managers lack the information they�need to make intelligent decisions.� Why�is this, after the rise (and eventual fall) of an entire industry around business�intelligence technology?� Will Cloud Computing�change the sorry state of business intelligence for customers?

2008 saw a number of next-generation BI providers move their�offerings from niche to mainstream.� Companies�like PivotLink, LucidEra, Good Data, and Panorama announced a maturation in their offerings and important customer wins. �Even Business Objects and Cognos were able to advance their on-demand�offerings from within their on-premise�parents.�

But most business still lack basic access to critical�information. �For most people in most companies, it takes a request to IT�(and perhaps a call to your implementation parter) to do something as simple as�add a field to a report.� In our eyes, this�is a market ripe for disruption from cloud computing in 2009.

2009 Prediction

Despite the fact that on-demand business intelligence has�been slow to take off, there are fundamental problems in business�intelligence that, in our view, can only be solved through cloud computing.� We believe that the increased availability of�cloud computing platforms in 2009 will make BI the next application category to�reach the tipping point of on-demand adoption, fueled by data from SaaS applications.�

Why BI?

BI is a classic �bursty� application.� BI�requires infrequent access to massive computing power-- a perfect application for cloud computing.

Thanks to Google, users have been trained to expect nearly instantaneous�access to any piece of information.� Instead of�spending hours formulating a carefully crafted query to run once, users expect�to be able to navigate iteratively through their business information.� They expect to run an initial search, see�what comes back, and explore from there.�

This is simply not possible with any legacy BI system: vendors brag about�achieving sub-minute response time� a far cry from the sub-second response time�that an interactive application requires.�

As a result, BI's impact in the enterprise has been limited... only a few power users are able to use it effectively.� The impact and value of BI would be exponentially greater if business users could search and navigate their company's data in the same way they search and navigate the information on the internet. �

Why can't in-house IT departments deliver this level of performance and usability using legacy BI systems? �In part, the issue is infrastructure. �BI infrastructure is overpriced and tremendously�under-utilized.� Many BI systems sit completely�idle 90% of the time, only to be hammered on well beyond capacity in the days�(or hours) leading up to a management meeting or end-of-quarter analysis.

These are perfect conditions for the shared infrastructure�of cloud computing. Shared computing power is the only way that companies can�deliver the responsiveness their users demand without a prohibitive investment�in hardware. �On-demand BI vendors, with their roots in modern web-based technologies and user interfaces are well positioned to create usable BI applications that will finally unlock the value from companies' transactional data.

Why BI from SaaS data?

We also predict that the winner in on-demand BI will emerge from an initial strength in analyzing data from SaaS business applications. �Why?� Analyzing data from SaaS�applications overcomes 3 of the key barriers to adoption for on-demand BI: Security,�transformation, and integration. � ��

Security: �Your business data are your crown jewels, and�nobody wants to be the first to put that into a shared infrastructure.� That�s why we think that data generated by�on-demand business applications is the likely starting point for on-demand BI�.�After all, this data already lives in shared environment.�

Transformation: Query,�reporting, and analysis is not the hardest part of BI�getting data into a�format suitable for analysis is a far harder challenge, especially for an on-demand�solution that�s trying to bring together information from behind the firewall.� This is less of an issue for BI running off SaaS applications where the data is already in the cloud.�

Integration:�Most analytical applications require bringing together business data from multiple sources. �Most modern SaaS applications offer�more open APIs than on-premise software.... on-demand BI has the potential to be better integrated, and therefore more valuable, when paired with a SaaS application.

Implications for�customers

Of course, it will be difficult for customers to�justify investing in an entirely new BI infrastructure, especially since most�are still trying to justify the investment they made in their last round of on-premise�BI infrastructure and 2009 looks to be a year of frozen or�slashed IT budgets.

That�s why we expect to see on-demand BI enter the�enterprise from the line of business, not the IT department.� Business users will be fed up by the�inability of their IT department to support their basic demands for�information.� If they�re already using a�SaaS solution, they�ll be tempted to try an on-demand BI solution that they can�get running without IT support, out of their operating budget (exactly how�on-demand CRM initially penetrated the market). ��

This is what we expect to see in 2009:� Low ticket, low risk, on-demand BI solutions,�built on cloud platforms, with adoption driven by business analysts hungry for�information.�

Our advice for enterprise IT?� Let it happen.� There isn�t yet a clear winner in on-demand BI,�and you have much to gain and little to lose from these experiments.� These are not requests you�ll be able to�service in 2009 anyway, and early experimentation will leave you well�positioned to jump on a winning solution. �

What do you think?

Which of�our predictions�do you agree or disagree with? Please let us know�by�voting�in our poll�or commenting below.

2009 Predictions: Azure Disappoints

2008-12-22T21:41:00.001-08:00

#2 in our series of�2009 predictions

2008�Recap

We�re not�sure exactly what there is to recap about Microsoft Azure in 2008, other than the launch event,�which certainly generated a lot of buzz.�

A closer look�by many��generated more skepticism. Phil�Wainewright said it best: �Whereas real cloud vendors release working services in beta on the�same day they announce them, Microsoft simply announces what it�s going to do a�year or two off in the future�. �Ray Ozzie confessed�that �the maturity of the�things that we�ve got on them as this point in time is limited. It will be a�different story a year from now. But I wouldn�t want to hold it for another�year. So, we�re getting in the game.��

2009�Prediction

So we�re keeping our expectations in check for Azure in�2009.� CNET doesn�t expect web-based�Office on Azure until 2010. There are only a�handful of applications (nearly all Microsoft built) being demonstrated on Azure�.the next generation of Live Meeting is supposedly up next.�

Why the slow pace?�Part of the explanation is certainly the scope and ambition of the Microsoft�vision.� Microsoft has a history of being�late to markets that it eventually dominates, and we certainly don�t want to�under-estimate the power of the resources Microsoft has at its disposal. Ray�Ozzie is a visionary, and he�s charted out an ambitious course that will take�decades to fully realize.��

But we think there�s more to it than that.� The last 2 years have shown us how challenging it is to play�in both the cloud and client-based worlds. �We�re�written about the challenges SAP has faced building new business models without�disrupting their core business. Microsoft will face the same challenges. �This tension between wanting to play in the�cloud without damaging its cash cows is the reason that it has taken Microsoft so�long to even start talking about Azure.

Given�this conflict, we don�t expect much from Azure in 2009.� Microsoft will use it as a platform for some�of its own services, but will face huge go-to-market conflict in rolling these�out to customers.� Microsoft�s developer community�will face the same conflicts, and will be unsure how to focus their
investments.� The hundreds of companies�that make their living hosting Microsoft Exchange servers have the most to lose�Exchange�and Sharepoint are likely to be the first applications ported to Azure (exhibit�A of the types of conflict Microsoft will encounter as they roll out Azure).

What�it means for customers

The big news for customers out of Microsoft Azure is validation�of the cloud computing model.� The entire�IT industry is FINALLY unanimous in acknowledging that the future of enterprise�computing lies in the cloud.� Microsoft, IBM,�SAP, Oracle�all have now told their customers that they need to be thinking�about cloud computing.�

So the real question for the enterprise is how to get�started.�That�s a question that we at Appirio love to help customers answer.� Unfortunately,�the answer is probably NOT with Microsoft Azure.

What do you think?

Which of�our predictions�do you agree or disagree with? Please let us know�by�voting�in our poll�or commenting below. �And follow a rich dialog on these predictions hosted by Clint Boulton at eWeek.

2009 Prediction: Enterprises will figure out how to use social networks in the right way

2008-12-21T21:16:00.001-08:00

Prediction #9 in our series of�2009 predictions...covered out of order due to�New York Times Blog coverage.

2008 recap: In 2008, social networks exploded in popularity, but remained almost entirely a consumer phenomenon: 2008 was the year where�social networking was more popular than online pornography... "In 2008, if you're not on a social networking site, you're not on the internet,"�wrote the Interactive Advertising Bureau. �But while�96% of Millennials / Gen Y had joined a social network by the end of 2008, only 57% of overall internet users did. �And while there were�over 50,000 applications written on the Facebook platform,�nearly none help people be more effective at work.�

2009 prediction:
In 2009, we predict that companies will finally figure out how to use social networks in the right�way: by building up (NOT undercutting) the trust between employees and their friends. Your employees already use social networks to connect and exchange information with others in their personal life... there's no reason that this trend would stop at the office door.� In 2009, you'll see HR, marketing, and sales organizations at leading companies capture real business benefits from effective, trust-based use of the social networks of their employees:

Find and attract great talent for your�company by encouraging viral employee referrals
Create a "virtual account team" of friends inside and outside your company as you approach strategic accounts
Virally promote activities your employees, customers, and partners are excited about

Implications for customers
The underlying reason that social networks are valuable in the enterprise is simple: people trust their friends.� Messages that come through personal connections will always have a higher impact than corporate messages conveyed through traditional advertising.� This is what gives social networks such potential for viral sales, marketing, and recruiting.... and why maintaining the integrity and trust of the social network is so important.� Companies who want to use the social graph effectively need to understand 3 core principles of social networking in the enterprise:

The world doesn't need "yet another" social network:� Social�networks benefit from increasing returns to scale.� The larger the�network, the richer and more valuable the connections between its�members.� That's why efforts to create "behind the firewall" social�networks have failed.� Even the largest companies are too small to�sustain the diversity of social connections required to rival the level�of interactivity of a public service like Facebook.� Companies need to acknowledge that the�most valuable social networks live outside their firewall, and that�making the most of the social graph requires reaching out, not
replicating within.�
Lines are blurring between work and play:� Many of us�would like a clear line between our work life and our personal life....including a separation in these two social networks. But this separation isn't sustainable, and is already starting to break down. �One example: our grad school�classmates�initially�connected on Facebook--- even though we are all now doing business together, we still use Facebook to stay in touch.� Functionality wise, there's no reason not to (Facebook's interaction is just as effective with work friends).� And in any case, services like FriendFeed and Ping.fm make the notion of a separate, disconnected personal social network quaint.� What does this mean? �Companies need to get used to doing business on Facebook, and seeing personal information on LinkedIn. �Employees need to get better using the capabilities these services offer to show different things to different friends. �But at the end of the day, people are people, whether at work or at play-- there's no such thing as a purely social network. � � ��
Employees own their social network, not their employers:� Every marketing organization salivates over the prospect of privileged access to Facebook's 120 M users. But effective use of social networks requires an understanding that employees own their social networks, and will only allow their employer access if there's a clear value proposition to them AND their friends. The New York Times wrote up Appirio's Jobs4myFriends Facebook application, calling out the risks of inappropriately using an employee's social network. We couldn't agree more: that's why recruiting is such a great use case for an enterprise Facebook app--- our application puts control in the hands of employees, allowing them to refer friends they�d love to work with. YOU choose whether or not to refer a friend for a job, and your company will never see anything about your friends that isn�t public. Establishing this trust is critical to bringing social networks into the enterprise.

Companies need help applying these principles to their social networking efforts, and we will certainly see a lot of missteps and false starts.� But the trend is clear, and we are confident that 2009 will be the year that companies start to see major business benefits from trust-based use of the social graph.�

What do you think?

Which of�our predictions�do you agree or disagree with? Please let us know by�voting in our poll�or commenting below.

"Cloud of Clouds" - the first in a series on our 2009 predictions.

2008-12-18T09:26:00.000-08:00

2008 Recap

In 2008, we saw the early seeds of a "cloud of clouds" emerging. It started in April with Salesforce and Google announcing integration between Google Apps and Salesforce to bridge the gap between Google's productivity applications and Salesforce. Later in the year, at Dreamforce, Salesforce expanded the idea of a "cloud of clouds" by announcing integrations with Facebook (for social graph information) and with Amazon (for raw computing infrastructure). Salesforce ended the year with a bang, by announcing Force.com for Google App Engine. In a period of 12 months, Salesforce laid the seeds of a "cloud of clouds" bringing together the strengths of multiple, complementary, on-demand platforms to create a "virtual platform" for the industry.

2009 prediction

The "cloud of clouds" expands around connected platforms. We'll see increasing investment from Microsoft, IBM, and other traditional software players in new but siloed cloud platforms. At the same time, proponents of a more open approach like Amazon, Facebook, Google, Salesforce will push more and deeper �cloud connections� like they did this year - creating a more heated debate between the value of siloed versus federated platforms.

What this means for customers

Customers will face a choice in 2009 about where to focus their investment in cloud computing. Companies like Microsoft and IBM are building cloud offerings that recreate the old software paradigm using new infrastructure (both offerings warrant a prediction of their own, coming soon). This will offer customers some incremental cost-savings and slightly more flexibility, but does not enable anything fundamentally new.

What is unique about the "cloud of clouds" is the ability to connect realms of software that have never been connected in the past, e.g., business applications, collaboration applications and social applications. This enables increases in both efficiency (through improved productivity) and effectiveness (through insight and new connections between information). A few examples:

Allow communication and collaboration in the context of business information: On-demand solutions offer the potential to finally bridge the gap between the tools that businesses need to run and the tools that people use to get things done. Imagine an account team communicating and collaborating in the context of their live customer data. That's the power of bringing together Salesforce and Google.

Bring social graph information into sales and recruiting: Imagine a sales person seeing how they are connected to a prospect before they send out a critical email. This would result in a far superior interaction and most likely a higher close rate. Imagine an employee using Facebook to identify the best candidates for their company's open job positions. These employee referrals are likely to be of a significantly higher quality than typical applicants. That's the power of bringing together Salesforce and Facebook.

So, the choice for companies is clear. Closed clouds offer the opportunity for more of the same done slightly better, while the Salesforce/Google/Facebook/Amazon "cloud of clouds" offers the opportunity for order of magnitude improvements in core business processes!

What do you think?

Which of our predictions do you agree or disagree with? Please let us know by voting in our poll or commenting below.

Gartner Says SaaS is Taking Off!

2008-12-11T22:56:00.001-08:00

Balakrishna Narasimhan

Gartner recently released a survey saying that the majority of enterprises expect to increase their use of SaaS in the coming months and years. We've been seeing this for a while in the customers we work with, but it's great to get external confirmation that this is a broad trend.

The Stats - Accelerating Adoption

According to Gartner, 90%+ of enterprises expect to maintain or increase their investments in SaaS. Even more interesting, ~40% of the organizations that Gartner surveyed are changing their IT environments completely from on-premise to cloud-based solutions. This end-user trend is reflected in the tepid financial performance of the SAPs and Intuits of the world while Salesforce, Concur, Taleo and others continue to grow at 40%+ (Ray Wang has an excellent analysis of this here).

The Business Drivers - Lower TCO while Increasing Flexibility and Innovation

We believe strongly that 2008 represented an inflection point in the adoption of cloud computing in large enterprises. This trend has only accelerated with the current financial conditions. As Nick Carr has observed, on-premise architectures are inherently wasteful (80% of server capacity, 65% of storage capacity are unused) and represent a fantastic opportunity for savings. However, the benefits of SaaS and cloud computing go far beyond savings alone. The "black magic" of SaaS is that companies can reduce TCO while increasing flexibility and innovation.

At Appirio, we experience this every day. We have a completely server-less internal architecture which has enabled us keep our IT costs at <2% of our revenues while scaling smoothly from 20 employees a year ago to nearly a hundred employees today. In addition, we have access to new innovations instantly. For example, a few weeks ago, Google rolled out video messaging in Gmail. Since we use Google apps within our domain, we had access to significantly enhanced functionality from one day to the next with no added cost or administrative overhead. Almost unimaginable in the traditional software world!

Our Prediction - Large Enterprises will Migrate Much More than Mail and CRM to the Cloud

SaaS is past the trial phase in many enterprises. Gartner notes that 40% of enterprises have 3+ years of experience with SaaS platforms. Companies have now experienced for themselves the benefits of SaaS within specific areas like CRM or messaging. We're seeing within our client base that companies are ready for a more holistic cloud computing strategy. We're increasingly working with large enterprises to quickly map their portfolios and develop roadmaps for large-scale migration to the cloud. Happy to see that Gartner agrees that this trend will accelerate in 2009!

Force.com for Google App Engine: Apps "Native" to a Cloud Community

2008-12-08T13:31:00.001-08:00

Ryan Nichols

Salesforce.com made two fantastic announcements today at their CloudForce event in New York. The first is Force.com for Google App Engine (demonstrated on stage by Marc Benioff and our own Narinder Singh using an extension of our work with Harrah's). The second is Force.com Checkout for native apps (Appirio Adoption Accelerator is one of the 19 apps in the pilot). These announcements illustrate two important elements of Salesforce's platform strategy: "Connecting the cloud" and "Go Native." We think Salesforce is uniquely positioned to bring these two concepts together into a powerful platform. Here's what we mean:

1. Force.com for Google App Engine is a natural extension of Salesforce's strategy to �Connect the Cloud.� We�ve already talked about why we�re so excited about Salesforce�s recent partnership with Amazon and Facebook, and the deepening relationship with Google. If you've been reading this blog or following Appirio's own news over the last year, it's clear we share Salesforce�s vision of �connecting the cloud.� (And we�re flattered that Salesforce has adopted our term so enthusiastically!). Today's integration with Google App Engine takes that idea to the next level-- highly scalable, consumer-focused web applications built on App Engine fully integrated with Force.com.

2. Force.com checkout is a natural extension of Salesforce's strategy to encourage "Native" Apps. Salesforce rightly argues that there�s something unique about applications that run entirely on Force.com. Force.com is a powerful, trusted platform, and there�s a confidence that customers can have in applications that rely on that technology. That�s why Appirio has built dozens of custom applications for our customers entirely on Force.com, offers several 100% native apps, and strives to have all of our products that interact with Salesforce run native functionality.

Here's the power of the Salesforce platform strategy: Salesforce customers can now have the best of both worlds. Salesforce is combining the strengths of multiple, complementary, on-demand platforms, delivered through applications that customers can trust.

Here's why this is so remarkable: there are many types of applications that Salesforce is very good at supporting. There are other applications for Salesforce customers that wouldn't be effective to build entirely on Force.com. Salesforce.com recognizes this, and partners with Google, Amazon, and Facebook to create a "virtual platform" for the entire industry. This is game changing - and should scare the daylights out of the old big four of Microsoft, Oracle, SAP, and IBM.

Each of these on-demand platforms have different and complementary strengths:

Force.com excels at modeling business processes, workflow and UI
Google excels at scalable, consumer-focused applications that extend its strengths in communication, collaboration, search, and advertising
Amazon excels at highly scalable low-level computing power and storage
Facebook excels at viral applications that leverage a user�s social graph and its community of 120M+ participants

Salesforce knows this--they formed these partnerships to differentiate from the isolation of legacy "platforms." Salesforce customers know this�that�s why they are eager to use applications that bring together the best of multiple platforms. Just look at the number one app on Appexchange (Appirio�s Calendar Sync for Google Apps) as well as 5 of the other top 10 on Appexchange. These solutions draw on the capabilities of the Salesforce, Google, AND Amazon platforms. That�s what customers want and need, and Salesforce is in a unique position to deliver on this promise.

After all, there is still a huge difference between an AppExchange application that largely runs on a server under my desk (of course, not native) and a Force.com application like Appirio Calendar Sync that runs certain intense computations on Amazon's EC2 or Google's App Engine. One is running on a set of trusted platforms, the other is not. There is real value in Salesforce working with partners to build stable connections with trusted on-demand platforms, and recognizing applications that take advantage of these platforms in a way that customers can have confidence in.

Today's announcement of integration between Google App Engine and Force.com enables a new class of applications that are "native" to a community of trusted cloud providers. And at the end of the day this will be one of the key ways Salesforce will distinguish its own on-demand platform from that of Microsoft�. Look for an upcoming blog post on "Microsoft�is it lonely up there in your Azure cloud?�

What IS the "Hidden" Cost of Google Apps?

2008-11-21T12:11:00.001-08:00

Carl Krupitzer

In a recent article published on CNNMoney.com called "The Hidden Cost of Google Apps," Jonathan Blum discusses an 12-person experiment his company undertook with Google Apps. In the article, he outlines both the collaborative benefits of apps as well as some of the shortcomings. The premise of the article is that "throwing out" your current messaging and calendar solutions and replacing them with Google Apps is a potentially�disastrous�thing for a company to do.

Google Apps Disastrous? �Certainly possible. �But the potential for disaster DOES NOT lie in the product itself, but rather in how an organization introduces change. In the article Blum describe his users as "struggling", flat-out refusing to use the application, and floundering with login issues (which in his defense can be confusing...I'll clarify and offer some hints on that later). �Appirio, on the other hand, has executed successful Google Apps migrations for extremely large companies. �The cost savings have been in the millions. The most recent was a large biotech company which migrated their entire corporation from Oracle calendar to GCal. The migration was hugely successful, with 9,800 users successfully logged in on the first morning to do their work.�

So the question really is "what's different?" How did a company of thousands migrate users successfully while Blum had near rebellion with 12? �

The answer: a carefully planned rollout and an understanding that you are changing the game for your workers. Our customer took the time to identify champions and put forth a thoughtful communications and training campaign. They made change exciting and fun for their community. The results spoke for themselves. The support war room that had been planned to be open for several weeks after the deployment was closed because of lack of issues within 2 days.�

Our tough message for Jonathan Blum? You are asking your users to step away from the very tools that make them productive on a daily basis. You have to plan and train people for that change. You can't just "throw out" their tools and expect them to maintain their current work load, while learning new tools, and remember a long URL string! �Over the last decade, employees have invested time and energy in becoming proficient and productive with MS Office. �These type of communication and collaboration solutions are truly core to our productivity as knowledge workers. Change is never fun-- investing in the training and development of your staff is necessary to keep them innovating and productive.�

Google Apps represents a shift in mindset as much as it is a replacement of a tool. Instead of rolling out Apps with "tough love," you should encourage the adoption and foster the creativity that this tool set promises to deliver. �Recognize that employees want to do good work and be productive, and give them tools like Google Apps that millions of consumers love to use. �

But back to the login issue that Blum highlights in his article: No doubt at first glance the login situation with Google is confusing. You have the concept of personal Google Accounts and your Enterprise Apps accounts, and the two things can and often do have the same account name and password. A personal Google Account is similar to MS Passport, simply a means of verifying your identity. To add to the confusion you often do have many different logins for different services Google offers. It is clearly an area that has caused frustration for users and something that Google will have to address eventually.�

Much of the confusion can be eliminated however during the provisioning of your Apps instance. Setting up any messaging infrastructure takes planning and consideration. Google has included some great tools to help including�Single Sign On support and the ability to restrict access to a certain IP range. Many partners including Appirio, have created tools to bulk provision large numbers of accounts and provide synchronization with Identity Management systems such as Active Directory. Apps is a sophisticated solution and one that can and does meet the needs of many organizations. All it takes is a planning!

Here is some tactical advice to help Blumsday (free of charge!)

Create a Cname record, and train users to go to "mail.blumsday.com"�for email. It is much more intuitive than "www.google.com/a/blumsday.com/mail"
Spend some time and train your users. If all of your employees are spending 30 mins a day, it won't take much effort to improve their efficiency and your ROI by delivering a training class or two. Poll your users on what their issues are and address them...stop making them frustrated and unproductive!
Create help desk procedures. Treat Google Apps support just as seriously as you would any installed software support issues.

At the end of the day, Google Apps is not complicated-- the feature set is actually far simpler than the MS Office counterparts. �This simplicity of user experience, however, supports collaboration features that will change how your people work.�Video chat,�corporate video sharing,�online presentation capabilities,��having multiple people work on a single version of a document at the same time... �all in a package which gets better and better automatically every quarter. �Throw in the ability to shut off the Exchange servers and stop sending back up tapes to offsite storage, and the story becomes simply amazing for $50/year. �

The business case for Google Apps is fool proof - unless you approach the change and migration foolishly.

Microsoft and On-premise - Billions of Dollars Behind Google and Growing?

2008-11-17T09:08:00.000-08:00

Narinder Singh

Last week Google launched embedded video chat from within Gmail and chat. First of all, wow. It has been an instant hit at Appirio and other customers of Google Apps. Immediately you can get crystal clear video and voice without almost any effort (especially true for Mac users with our built in cameras). We've used it to connect our teams across the country and with India and Japan. It dramatically changes the communication experience because Google streamlined the user experience to make it simple to connect with anyone - inside or outside your company. In our very first video connections, our attention actually turned to this as another extreme example of the innovation gap between on-premise software and "the cloud". Rumor has it that even group video chat will be coming soon.

What would it take Microsoft to add such a capability into their traditional Exchange platform? How long until end users at customers would actually benefit from it?

1. Microsoft would have to build and test it - Given all the different versions of their software, hardware, OS combinations facing Microsoft, they would have to make some very tough choices or severely limit the options they supported. Given the precedent of Vista compatibility, this enormity of this can not be underestimated. Conservatively, it would take them more than 10x the effort for Google to do the same thing within Exchange.

2. Customers would have to then get the new version and upgrade all Exchange instances - With Google, it basically was a couple clicks and it worked. For Exchange / Outlook customers they would have to upgrade or install completely new software. If they wanted to chat with those outside their company, they would have to hope those folks had also upgraded.

With an estimated 500M Outlook users, lets assume that the fully loaded cost of the upgrade (license, support, rollout on the server and to each client) will be just $10 per user (an incredibly conservative number in our opinion). That means it would cost businesses at least $5 billion to gain the functionality Google just rolled out in a day. The likely case is that this would also take years to take hold, severely limiting the benefits because not everyone was on the same version immediately. You would have to wait for your friends company's to rollout the "new version" so that you could video chat cross company (or naively hope that Microsoft actually built it using a standards based approach).

3. They would have to fix security and synchronization problems - What major new capability released from Microsoft doesn't create new security holes? Lets say that 500M users represented 5M companies each of whom had to spend an additional $1000 (1-2 days over a year) to deal with the security patches, and the subsequent synchronization to OS, SQL Server, Exchange version, that would be needed. That's another $5 billion down the tubes. For Google, even when problems do arise, they are fixed by Google, once, for all customers (without the customer having to take any action).

So what's the answer? Microsoft will 'never' effectively add video chat to their on-premise Exchange platform. Instead they will try to mimic Google and eventually create an add on that leverages a single multi tenant platform to support this kind of capability. So what you say? Ray Ozzie already admitted Microsoft had to change dramatically, "It's (cloud computing) a transformation of our strategy." The real world challenges of attempting to "embrace the cloud" while preserving and even promoting their legacy is simply too much for even Microsoft to bear.

At a recent private event of medium size enterprise CIOs, one of the most senior Microsoft executives was left struggling to explain why a company should continue to invest in Exchange when Google was providing a broader (and growing) set of capabilities for 1-2 orders of magnitude less expense than Microsoft (Google Apps for mail, calendar, chat, docs, and sites lists for $50/user/year). The realities of attempting to preserve revenues from a legacy solution while promoting the new model is too much inner conflict for even Microsoft to wade through. As we have said before, the most likely path for company's like Microsoft to "transition to the cloud" is to set up an independent unit that can compete freely with their own solutions.

In the last year, Google has added more innovation to the messaging and collaboration space than Microsoft has in the last decade. To do this at a fraction of the cost for themselves and customers highlights the radical difference and inherent conflicts in on-premise vs. on-demand. With the current economic conditions, we expect to see a large set of studies and research that drill home the simple fact that real multi-tenant SaaS/PaaS solutions deliver much more value for a dramatically lower cost for both the provider and consumer. IT is simply too important and too costly to be left with solutions of a pre-Internet world.