They knew that the only way to tap into the sourcing and spending patterns that were evolving as the world went online was to become cloud-native. In the process of adapting to this connected, always-on, and now increasingly mobile environment, they have moved further and faster than most other categories of enterprise software vendor.

Today, the cloud is further transforming the nature of sourcing itself, enabling new crowdsourcing strategies in which prospective suppliers — not only of goods but increasingly also of intellectual labor and professional services — compete in a global marketplace on a contract-by-contract (or even microtask) basis. This form of online sourcing is still in its early stages of evolution, as it irons out the intricacies of automated reputation rating and price setting, while guarding against the constant attempts of participants to game each platform for short-term profit. Once these teething issues have been resolved, automation of the sourcing and spend management process will step up to an entirely new level of innovation, which will likely have repercussions across other application stacks they'll link into, such as HR and revenue management.

This overview of today's leading cloud supply chain and spend management vendors is the fifth and final in my series of blog posts setting out a cloud perspective on the old, established categories of enterprise software. Previous posts looked at what replaces ERP, the redefinition of CRM, the fast-changing landscape of collaboration, social and docs and the new, people-first nature of HR and talent management.

These reviews take a strictly cloud-only stance, and I focus on larger enterprise offerings rather than those for SMBs. Some vendors may be past or present consulting clients or work with me in the EuroCloud industry association, but know not to expect any favors from me in my independent writing. This is a necessarily brief overview, and if you feel I've missed any important players or points, please use Talkback below to add your feedback. If you want to drill in further, one expert I can recommend is fellow Enterprise Irregulars blogger Jason Busch and his colleagues at Spend Matters.

Concur. The granddaddy of expense management in the cloud, Concur Technologies was founded in 1993, had its IPO in 1998 and then completed the transition from conventional licensing to subscription-based cloud multi-tenancy in the full glare of public financial disclosure — "Don't do it as a public company," CEO Steve Singh later advised. Now firmly established in the cloud, Concur is continuing to grow its ecosystem of partnerships, ranging from travel providers such as hotels group InterContinental, to participants in its newly launched App Store. Its $120 million acquisition of travel planner Tripit in 2011 was the most noticeable of a number of steps it is taking to enable travel and expense management on the move. Today it is working to make sure that its mobile applications take full advantage of location awareness, recommendation engines and push notifications to act as an intelligent travel assistant to users on the road.

SAP/Ariba. Long before its acquisition by SAP, spend management vendor Ariba migrated away from its on-premise heritage to become a cloud applications vendor. It has now become the core of SAP's cloud offering for managing suppliers, although this is not the first time SAP has ventured into the cloud on the back of an e-sourcing acquisition. One of Ariba's srongest suits is its network of one million registered suppliers, which claims an annual transaction volume of close to half a trillion dollars. Such huge numbers demonstrate the value that can be amassed by building up a global network in today's networked economy, even if Ariba sometimes spoils the effect with high charges for processing electronic transactions. The challenge for Ariba and its parent SAP is keeping its offering relevant in a fast-evolving world.

Other supply chain. Moving goods and services around the world requires a vast hinterland of hidden support services in fields such a freight management, financial and customs documentation, warehousing and logistics, and much more. Among many innovative and specialist cloud players here, one to watch is GTNexus, which manages both physical and (after its merger with TradeCard) financial supply chain processes. Others to mention include B2B integration giant GXS, which operates a SaaS portfolio to manage supply chain activity, supply chain management vendor e2open and, on a different tack, cloud bill of materials management specialist Arena.

Coupa. The fastest-growing of the next generation of spend management vendors, Coupa has always led on bringing ease-of-use to business procurement. Over the past few years it has rounded out its offering with a range of spend optimization tools, including the acquisition last month of expense management provider Xpenser to add improved mobile functionality. It is becoming a serious challenger to the established enterprise vendors in its space.

Rearden Commerce. One of the most overlooked names SaaS players in the spend business, Rearden Commerce has been playing a long game to build its next-generation vision of automating connections between buyers and sellers, backed by $340 million of venture and strategic investment to date. In late 2010, it swallowed up smaller spend management player Ketera, although a later realignment saw Rearden doubling down on its core commerce network offering.

Other spend management. Other pureplay SaaS vendors in the space include Perfect Commerce and leading commerce network operator Hubwoo. Notable players serving the SMB market include Bill.com, which automates invoicing, bill payments and collections,, online invoicing, billing and accounting vendor Freshbooks, and ExpenseWatch.com (owned by Amazon CEO Jeff Bezos).

Other expense management. Despite the dominance of Concur, there are many others around, including Certify and SMB-focused webexpenses. Adding mobile functionality early has helped open up opportunities for more recent newcomers Expensify and Shoeboxed.

Crowdsourcing. There's an explosion of experimentation and innovation as the world of crowdsourcing matures. Traditional contingent labor sourcing providers such as IQNavigator should probably be looking over their shoulders at these uniquely cloud-powered providers who bring on-demand to the world of clerical and professional services. Beyond the more established freelance networks such as eLance and oDesk, there are a range of more specialized crowdsourcing marketplaces springing up, ranging from 99Designs for creative work and XTM Xchange for translation, through to Blur Group's platform for everything from artwork to accounting. Others such as CrowdSource and CrowdFlower focus on harnessing microtask labor. These services are not yet hooked into other enterprise procurement and workforce management applications, but their impact when that happens will be enormous. 

The main message from the analysis is that the world is still learning about big data, and that probably means we're in the early adopter phase and not yet at the peak of the notorious hype cycle. Here's a quick rundown of some of the most striking findings:

• After staying almost flat from Q1 to Q2, tweets about big data surged 25% in both Q3 and Q4.
• 72% of tweets included links, showing the conversations were mostly about sharing information resources.
• The most shared articles of the year were largely explaining, exploring or 'mythbusting' the topic.
• Hadoop ensured that Apache was the most mentioned vendor, but MongoDB developer 10gen was a strong second place.
• IBM's active content marketing strategy doubtless helped it beat out HP, Teradata, Oracle and EMC for mentions
• Splunk's IPO will have helped its visibility. Conversely, HP's spat over Autonomy generated the most negative tweets on big data.
• Japan's habitual preference for build-your-own solutions gave Cloudera prominence over rival vendors in that market.
• Splunk outperformed in the US, DataSift in the UK, SAP in Germany and (why?) IBM in France.

DataSift maintains what it claims is Europe's biggest Hadoop cluster (comment in Talkback below if you know different!). It says that every tweet is stored along with an average of 72 data items relating to it and it stores around four terabytes of data every single day. In its analysis of 2012 tweets on big data, it found over 2 million interactions involving just less than one million authors. Peak activity was just over 3000 tweets an hour — almost one per second — but that's literally just a drop in the ocean of 8000+ items per second that DataSift monitors in total.

I've seen a lot of definitions of big data over the past couple of years. I prefer a fairly loose interpretation: when it comes to industry buzzwords, my policy is to 'go with the flow' of popular usage, irrespective of what purists may argue. The underlying trends are what really matter, and the reason this particular buzzword has become commonplace is the confluence of cloud computing with smart devices:

• As well as providing on-demand access to a wealth of private and public data resources, the cloud delivers inexpensive storage capacity and elastically scalable, pooled computing resources that can be harnessed on demand and at very low cost. This has made it viable to perform sophisticated analytics over huge volumes of data that were never even thinkable before.
• The proliferation of intelligent devices is producing an explosion of data, whether it's location-based data from the cellphones people carry around with them, metrics from smart devices installed in homes and workplaces, or the activity streams of social media and other interactions in the cloud.

Put both of those factors together with the spread of automation out of core enterprise application silos into every aspect of business activity, and you have a perfect storm of data being created that is ripe for productive analysis — if only you can work out where the value lies.

That's the catalyst for interest in big data, and therefore the term is legitimately used for anything that answers those trends.

You don't have to be dealing with petabytes of data (though often you will be). You don't have to be running Hadoop or some other NoSQL platform (though it's often part of the picture). You don't have to be handling live streams of real-time data.

What you probably do have is a nagging feeling that you're missing out on valuable insights that are hidden in the data available to you today.

For cloud application providers, the opportunities of big data fall into three categories that are conveniently represented by the three speakers lined up for next week's meeting:

Enabling big data. Workday has added big data capabilities to its HRM and financials applications so that customers can bring in external data sources and analyze them alongside transactional data from their operational systems. Its CTO Europe, Annrai O'Toole, will discuss some of the use cases at customers, as well as some of the lessons learned in building the infrastructure.

Analyzing big data. Probably the biggest area of opportunity for cloud providers is analyzing the aggregated data they look after for their customers to find new sources of value-add. Collaboration vendor Huddle was able to use its archive of user behavior to develop a predictive algorithm that helps it decide which files users are most likely to need downloaded to local storage. CMO Chris Boorman will be talking about his experiences as well as bringing additional insight from his previous role at data integration vendor Informatica.

Productizing big data. A new wave of specialist providers are building products that harness big data sources for business advantage. Tim Barker, chief product officer of DataSift, will discuss how the company has harnessed the entire Twitter archive, along with other sources, to provide social data and analytics to enterprises. He will also speak about DataSift's experience of running one of the largest Hadoop clusters in Europe.

The event will be held in central London next Thursday April 11th from 4pm. It takes a business angle on big data: Economics of Big Data in Your Cloud Platform, and is aimed at product and business leaders of cloud providers. Admission is free to EuroCloud members and for a modest small registration fee to non-members — follow the link above to sign up. Or if you can't be there, join the Talkback discussion below.

This is unexpected in Croydon. The last time the town was a trendsetter was in the 1960s, when planners encouraged high-rise office blocks and surrounded the town centre on three sides with a multi-lane ring road. From nearby hills, the downtown buildings look like a mini-me version of central London's skyscrapers that poke up on the horizon a dozen miles to the north — and in its heyday, that was a thriving model. But many of the office blocks are empty now and Croydon made global headlines during the 2011 summer riots when arsonists razed the entire city block housing the retail outlet of century-old family firm House of Reeves.

It seems that nadir was also a beginning. One Croydon resident walking through the town centre in the dawn light after the riots decided to found Matthews Yard, the meeting and working space where last night's event took place. Adjoining a cobbled square overlooked by an imposing Victorian pumping house and just yards from the site of Croydon's medieval market, awarded a Royal Charter in the 13th century, this is Croydon looking to its future while reconnecting with its historic heart.

Even so, we in the UK are only just getting used to the idea that we can have a Tech City in central London where startups can flourish without having to migrate to Silicon Valley to find funding, talent and growth. Isn't it premature for people to be getting the idea that even in Croydon, digital entrepreneurship can thrive? When I picked up my handwritten badge on arrival, I had a flashback to First Tuesday, London's dotcom boom networking forum, where badges had color-coded dots to identify whether attendees were looking for finance or handing it out — tonight's attendees were tagged as startups, investors, sales, tech or 'business dudes'.

So I'm wondering whether this is the tail end of the tech bubble, when the ordinary folk arrive to get in on the act just as the crash sets in. Or is it more a case of arriving at the plateau of mainstream adoption long after the boom and bust — when tech, cloud and Internet are now so ingrained in society that the idea of setting up an online business is becoming commonplace.

First up on stage was 18-year-old serial tech entrepreneur Andrew Brackin (@brackin), organiser of Tomorrow's Web, and now on his fourth online start-up. He passed on plenty of great tips from his experience of building online businesses — striking insight of the night was, "When you send someone an email they're much more likely to open it than click a link in a tweet or a Facebook newsfeed." Still living locally (though he commutes to work in the other Tech City of London's Silicon Roundabout), he's now started the Bunchy social funding site. The next speaker was 38-year old David Lee, Croydon-based founder of DNA Dezign and creator of the Smart Dresser virtual changing room app. He explained how his venture stepped up a gear when he tapped into a Canadian mobile app development platform.

That ability to tap into global resources wherever you are is the real reason why towns like Croydon can have their own tech hubs. The Web and the cloud have levelled the playing field so that you no longer need to be in the same neighbourhood as the star players to get ahead. This is about the mainstreaming of technology, the same reason why I can sit at home two miles down the road from Croydon and still post to a site that's administered from New York, grounded in San Francisco and has contributors across six continents.

Tonight's event closed with a panel of tech experts. It included contributors from global enterprise vendors SAP and Successfactors as well as Croydon-based email marketing automation provider dotMailer. The advice on offer from the panel was as robust and experienced as you'll hear at any tech event I've been to around the world. The knowledge of how to be successful with an Internet or mobile based app startup has gone global and it's now as readily available in metropolitan suburbia as it is in the innovation hotspots of Silicon Valley.

Sure, there are more VCs south of Market in San Francisco than you'll find south of Croydon's market. But who's to say the entrepreneurs and innovators are any less creative and determined in Croydon than they are in Old Street or Brannan? This pattern is being repeated all over the world and the next generation of tech entrepreneurs is becoming a truly global phenomenon, not limited to any single geography or hotspot. Croydon Tech City is living evidence of that. 

With a pedigree stretching back more than half a century, paying staff is thus among the earliest of business computing applications, and the first to be delivered as a service. Those early computers got the job because they excelled at number-crunching, and as the applications evolved, the transactional aspect of human resources management (HRM) remained at the core, delivering functionality such as time and attendance, benefits administration, applicant tracking, and performance management.

Good with people, too

The advent of the cloud in the past decade has coincided with a new wave of applications based on computing that's powerful enough to be good with people too, not just numbers. Changing terminology over the years reflects the shift of focus beyond transactions to better serve the people they relate to.

Starting out as nameless human resources, the advent of talent management recognized employees as individuals (or at least as human capital) to be nurtured and developed. The latest generation of cloud applications, many accessed via personal devices, puts those individuals in charge of their own destiny, providing tools for purposeful teamwork, goal alignment, and career self-management (with or without the involvement of an employer).

Putting people first

This overview of today's leading cloud HRM and talent management vendors is the fourth in my series of blog posts setting out a cloud perspective on the old, established categories of enterprise software. Previous posts looked at what replaces ERP, the redefinition of CRM, and the fast-changing landscape of collaboration, social and docs. As the cloud begins to transform the nature of work, the latest HRM and talent management applications put people first, blending as they do so into adjacent application areas such as collaboration, identity management, and spend management.

For reasons that will be familiar to regular readers, I aim to take a strictly cloud-only stance in these reviews, excluding hosted versions of on-premises software. I'm relaxing that line a little this time, as there has been so much fudging of the line by many vendors in this space. Since the focus is on the enterprise market, I will mention few if any SMB solutions. Bearing in mind those exceptions, if you still feel I've missed out any important players or points, please use Talkback below to add your feedback.

As a matter of disclosure, I must add that some of these vendors, including Workday, Salesforce.com, and SAP, are past or present consulting clients and often fund my travel to attend their events. Others brief me over lunch or dinner from time to time, and several work with me in the EuroCloud industry association. While they all know not to expect any favors from me in my independent writing, a closer relationship sometimes means I'm more aware of their business than those of other vendors I speak to less frequently.

This is necessarily a sampling rather than a comprehensive one. For more detailed analysis of the topic, I heartily recommmend fellow Enterprise Irregulars Naomi Bloom and Thomas Otter. Brian Sommer's year-end review is also a useful resource, while a larger (though not always overlapping) vendor list can be found in ZDNet writer Charles McLellan's recent overview of SaaS vendors.

Workday

If you had wanted to reinvent HRM for the cloud, you might well have picked as your dream team the co-founders of Peoplesoft, the leading enterprise HRM platform of the client-server age. With Dave Duffield and Aneel Bhusri at the helm, that's exactly what Workday has done. Launched in 2006, it explicitly targeted larger enterprises right from the start, openly challenging SAP and Oracle on their home turf, and has played a leading role in proving the cloud's suitability for core enterprise applications, winning customers such as Aviva, HP, and Flextronics. [Updated 15:20 PDT: an earlier version incorrectly cited UPS as a customer].

Its cloud-aided ability to keep pace with emerging technology trends such as mobile, social/collaboration, and big data is helping Workday grow fast at the expense of conventional HRM vendors. In one recent win at City of Orlando, rival vendors were miffed to lose out in an accelerated buying process that not only saved Orlando the estimated $500,000 of a traditional RFP process, but also saw Workday's annual subscription come in at a lower price than the ongoing maintenance cost of the ageing JD Edwards system it replaces.

The one drawback of reinventing an existing application category is that it can make you slow to recognise new approaches that may subvert the very category you're focused on. Workday recovered quickly from an early failure to embrace social collaboration, but it could still miss out on emerging trends in a sector where some of the most striking innovation is taking place on the periphery of HRM in recruitment, performance management, and goal alignment. For the moment, though, it has plenty of potential growth ahead of it simply by offering established enterprises a proven cloud alternative to their legacy on-premises systems.

SAP/Successfactors

SAP's purchase of Successfactors just over a year ago was not its first entry into cloud people management but certainly staked out its determination to be a leading player. SAP's approach is to keep transactional HRM on-premises while delivering newer talent management capabilities, social functionality and mobile applications from the cloud. In the wake of the acquisition, it has been struggling to make it all work but it's a stategy that clearly makes sense to its installed base, where hybrid cloud/on-premises infrastructures will remain the default configuration for many years to come. One partner that's familiar with this struggle is Northgate Arinso, which has built its euHReka SaaS offering on a partially multi-tenant implementation of SAP HRM to deliver BPO-type services to its clients.

Oracle/Taleo

Oracle bought its entry to the cloud people applications space one year ago with its acquisition of Taleo. Many observers cited Taleo as the leading cloud talent management vendor, but some cast doubt on its architecture, which had much in common with Oracle's own hybrid take on multi-tenancy. That adds synergy to the acquisition, but perhaps makes it more interesting for Oracle's existing customers than for brand new prospects, who may prefer a more unalloyed SaaS platform.

Cornerstone

The acquisitions of Successfactors, Taleo, and Kenexa left Cornerstone OnDemand effectively the leader among independent talent management vendors. The company has been growing solidly in the wake of its 2011 IPO and subsequent acquisition of Sonar6. Close relationships with other leading cloud application vendors such as Salesforce and Workday also help it hold its own against the competition.

Other HRM and talent

I'll quickly review some other notable names in a sector that remains fragmented, despite consolidation in recent years. Many have taken a long journey to transition their offerings from an on-premises legacy to re-architect for the cloud. Among the most determined in this respect are Ultimate Software, with a long track record of delivering from the cloud albeit originally in a hybrid model; learning management vendor Saba and European vendors Lumesse (formerly Stepstone Solutions) and TalentSoft. Others have fallen prey to acquisition, such as Kenexa, acquired by IBM. Peoplefluent is the result of the merger of talent management vendors Peopleclick and Authoria, the latter having been one of the larger single-tenant SaaS players. Finally, Silkroad makes play of itself as a social HR vendor.

Payroll

Although still known best for its payroll services, ADP has expanded its SaaS footprint into other functions both organically and by acquisition. One of the earliest leading SaaS vendors was benefits administration provider Employease, which ADP acquired in 2006. Another acquisition was SaaS talent management vendor VirtualEdge. ADP keeps a low media profile but its market presence cannot be ignored.

CloudPay (formerly Patersons) has built a substantial business by addressing the surprisingly knotty challenges of global payroll management from the cloud. It raised a $16 million venture round in December, bringing its total funding to a significant $50 million. At the other end of the market, Intuit's acquisition of PayCycle in 2009 filled out its cloud offerings to SMBs. An interesting newcomer that could do well is ZenPayroll.

Recruitment

The advent of the web completely changed the way job seekers and recruiters interact with each other. Now social is adding further twists. There's more to come, as the scope for automatically matching up skills and availability will lead to increased workforce fluidity through contract working and crowd sourcing — blurring the boundary between recruitment and procurement (more on that in my next posting in this series).

Today's cloud recruitment innovators include social recruiting platform Jobvite and a number of related services such as digital interview platform HireVue and candidate screening services HireRight and SHL. A newer startup taking a mobile-first approach is iMomentous.

LinkedIn is a growing force in recruitment, already generating around half a billion dollars in revenue from this source, and a potential threat to other players such as Careerbuilder and Monster.com. In the SMB space, SmartRecruiters is one to watch. An interesting use of social and online analytics to identify when candidates are looking to move job has been pioneered by Entelo. Developments here reflect the growing potential for individuals to manage their own career progression, which could yet have repercussions in the evolution of recruitment and performance management applications.

Performance

Employee performance management and goal alignment is an integral part of most talent management suites. It's nevertheless worth calling out as a separate category, not only to cite several stand-alone apps, but also because it's an area where there's fair bit of innovation taking place using functions that are new to the enterprise, such as social networking and gamification. Increasingly sophisticated analytics are also contributing new capabilities.

The stand-alones in this category include established sales performance management vendors such as Callidus and Xactly. A recent newcomer is Work.com, the result of Salesforce's acquisition of Rypple, which incorporates a heavy dose of social recognition into goal management. Gamification is at an early stage of evolution, but two notable players are Bunchball and Badgeville. At the leading edge of establishing how to motivate and reward the people that make a business tick, these emerging capabilities are a very long way from those early days of simply working out how much to put in the weekly paypacket.

Box is not alone in its quest to become the verb of choice for enterprise collaboration. Many of the players in my review last month of the enterprise cloud collaboration sector have names that lend themselves to being used as a verb — an extra advantage for all of them over Microsoft SharePoint. So there's a battle for hearts and minds to be won and, despite its early success at Schneider, Box is nowhere near claiming victory yet. But its ability to show off impressive customer names in Europe, such as Anglo American, EMI Music, Telefonica, and Deutsche Telekom, demonstrates a growing presence in the global enterprise market.

For Schneider, the problem that Box solves is a new one born of the ease with which its employees can informally disseminate and share files in the era of cheap thumb drives, bring-your-own-devices, and easy sign-up to on-demand services such as Dropbox. IT had no oversight or governance of these informal file sharing platforms, said Coureil. The company needed to offer employees an equally easy-to-use and convenient alternative that could be managed by IT. Box fitted the bill.

"It is a federation layer that allows us to share all the content across the different teams within Schneider, but without being heavy," said Coureil. Having a good mobile app, and the ability to extend and connect it into other applications that the company is using, such as Salesforce.com and tibbr, were also important, he said.

"It solves a new problem for us," he added. This is not an upgrade or replacement of an existing enterprise-wide system, although there may be some decommissioning of local file-sharing servers at individual sites. The ability to share and collaborate on files between locations or business units will be an all-new capability, he said.

The pilot took place in two departments: IT and internal communications. One of the key objectives of the pilot, now entering its second month, was to design a training strategy and materials for the platform that will be used in the wider rollout — one employee has been dedicated to this job full-time. Making sure that there's a process in place to encourage adoption and take-up had been a lesson learned from earlier implementations of Salesforce.com, Coureil said. Once employees understood that they could record version histories and discussions around documents, they saw the value of Box, he explained. It was important to give them enough support getting started to make sure they reach that tipping point.

In layering Box over the top of existing on-premise applications and document management systems, Schneider Electric is following a pattern that will be familiar to many other enterprise cloud adopters. The cloud excels at connecting across boundaries both within and outside the enterprise, while giving IT a single point of control instead of the complexity of managing many diverse platforms and technology stacks. But it's the ease with which users can take advantage of cloud functionality that allows cloud applications to become verbs in their everyday working vocabulary.

After publishing last month's overview — All together now: cloud collaboration, social and docs — several vendors got in touch to add their names, so here is a quick call-out to those who did so:

• Samepage.io, which aims to combine social business, project management, and file sharing

• Bitrix24.com, which offers similar capabilities for free for up to 12 users

• TeamDrive, which bills itself as a European alternative to Dropbox

• MangoApps, a modular collaboration suite built around an enterprise-grade messaging and presence tool.

I also heard from various IBMers, who gave me some heat for not mentioning IBM SmartCloud for Social Business, citing its selection as a category leader in a recent Forrester report. I still have my reservations about product lines that have their roots on-premise, but have not yet had chance to give SmartCloud a proper review. Therefore, I'll reserve judgement, even if the name doesn't roll off the tongue easily enough to serve duty as a verb.

No wonder investors have plowed money into high-flying cloud collaboration startups such as Box, Dropbox, Huddle and others, while the stocks of public companies such as Google and LinkedIn have soared. The transformation now possible in how organizations work is a rich opportunity to make an impact in this previously neglected backwater of enterprise software. But who are the frontrunners among cloud application vendors?

Past, present and future

Earlier generations of enterprise collaboration technology simply aimed to automate existing processes from the physical world. Document management took physical documents and made them electronic (often literally, with scanners). Workflow became the digital doppelgänger of the postboy, moving mail around the enterprise. PCs gave workers personal productivity apps to help them create the same documents faster and better, yet still isolated in their cubicles. Traditional enterprise collaboration has remained sequential and stilted, structured around documents and projects that advance through carefully planned stages.

Right from the start, the Web opened up unprecedented scope to use cloud-based software to collapse distance, slice through timezones and supercharge teamwork in ways that had never before been possible. Some of the earliest cloud applications were online collaboration tools such as WebEx web conferencing, founded in 1996 (and IPO'd on Nasdaq in 2000), and project management platforms like ProjectPlace, founded in 1998 in Sweden. They excelled at enabling interactions across distance and beyond the edge of the enterprise.

But understanding how to really take advantage of these new capabilities has been a slow learning curve for individuals and organizations. Today we're still working out the best way to do things together that previously we all had to be in the same place to do, such as collaboratively work on a shared document. Among the successes, there have been many failed experiments as vendors try out new ways of enabling these interactions.

That slow progress perhaps explains why people so often talk as if going social was never possible before Facebook came along, even though business is inherently social and, since time immemorial, has involved people collaborating. What's new is that we've never before been able to be social across time and distance, aided by smart automation that helps us get more out of those interactions. While the cloud has made working together simultaneously global and immediate, it's not always self-evident how to translate that into business benefit.

An open field

This is the third blog post in my continuing survey of how cloud is forging new categories of enterprise software. Previous posts discussed what replaces ERP and the redefinition of CRM. Coming next is HR, followed by spend management. This post looks at what to expect in 2013 from the leading cloud vendors in collaboration, social and docs.

With so much yet to be defined in how this category will play out, the field is still wide open. There are huge numbers of players from diverse backgrounds including file sharing, document management, web meetings, collaboration, project management, workflow and social media. Some have evolved with a focus on collaboration within a single enterprise, while others have specialized in enabling collaboration across enterprise boundaries. Inevitably I'll mention only a small selection, so please use Talkback below to add your feedback if you feel I've missed any significant players.

Before I start my review of what to expect from the leading cloud vendors in this crucial field, as ever I must disclose that some may be past or present consulting clients. Others fund my travel to attend their events or brief me over lunch or dinner from time to time. Several work with me in the EuroCloud trade association. They all know not to expect any favors from me in my independent writing, but it's inevitable that with a closer relationship I'm more aware of their activities than those I speak to less frequently.

For reasons previously discussed, this review is strictly cloud-only and does not include hosted versions of on-premise software. Therefore you'll find little-or-no mention of significant on-premise players such as IBM, Oracle, EMC and Autonomy. Nevertheless, the focus is on the enterprise market so I'll only mention SMB solutions in passing. Finally, for far more insight and knowledge than I can include in such a brief overview please also read ZDNet fellow-blogger Dion Hinchcliffe, along with other Enterprise Irregulars Susan Scrupski, Sameer Patel and David Terrar.

Microsoft. As the legacy vendor most closely associated with conventional document creation, Microsoft has most to lose. But this giant has not been sleeping; it is slowly adapting to the new environment. The latest version of its flagship Office suite makes the leap to a cloud-aware, subscription-licensing model, even for home users. This is a canny move to influence the next generation of workers. With entire families running Office 365 Home Premium on up to five devices, sharing files via SkyDrive will become second nature for kids before they even enter the workplace. Meanwhile, the acquisitions of Yammer and Skype have brought cloud-savvy technologies into its collaboration product family. But with its Sharepoint platform at the heart of its enterprise strategy, Microsoft is still focused on enterprise-centric, internally directed collaboration, with a strong dose of old-school structure. It has yet to demonstrate that it can enable flexible teamwork across the enterprise boundary.

Google. The mirror image of Microsoft is Google, which has not done a good job of bringing its cloud savvy to the enterprise collaboration environment. While there are few platforms better suited to simultaneous collaborative editing of shared documents by disparate teams, Google Apps does a lot worse when it comes to producing high quality finished output or in satisfying enterprise governance concerns. Such concerns are seen as a distraction from its core mission. Google Apps is not getting the attention and investment from Google that it needs to be really successful in today's enterprise market. Google would probably argue it doesn't want to cater for the past and remains confident in its ability to develop what tomorrow's cloud-enabled businesses will need. We'll see.

SAP. When it comes to activity-focused collaboration within the enterprise, SAP is a surprise contender. Several acquisitions — most notably Successfactors — and a fair bit of development work have resulted in the creation of SAP Jam, a cloud-based application that powers collaboration in relation to goal management and transactional activity. Launched last October, It's an interesting demonstration of how cloud collaboration can work within a conventional enterprise application stack. But it's aimed at SAP's existing customers and for that reason is not a contender in the wider market.

Box and Huddle. I put these two together as they are both well-funded cloud pureplays targetting the enterprise market with an emphasis on external collaboration around file-sharing. UK-based Huddle is smaller but targets 100-plus user acccounts, whereas the larger US-based Box still has many individual users and microbusiness as well as scaling up to large enterprise accounts, aided by its newly announced partner strategy. Both are worth watching, especially to see the innovations they're able to pursue thanks to their funding. For example, Box has been developing ways of speeding up transfer times across the public Internet, while Huddle is using big data techniques to help predict what files to pre-download for local sync. For more on these two and Dropbox, read my post from last year on Building a platform for files in the cloud.

Jive. My harsh inclusion rules should disqualify Jive Software, which provides a single-tenant product that most customers deploy on-premise. Focussed on collaboration within the enterprise, Jive would argue that many customers distrust the security of the cloud for confidential information exchange, and therefore on-premise must be an option. Nevertheless, the company has moved towards a 'cloud first' development cycle and last year introduced an on-demand SaaS version with a 30-day trial. It's also a leading player that has done much to demonstrate the power of social collaboration in an enterprise setting.

Project management centric. There are many smaller players, such as Projectplace which I mentioned earlier, that have prospered by offering cloud collaboration platforms designed to support projects. Basecamp, the first application created using Ruby on Rails, has a popular following. Daptiv helps enterprises manage repeatable projects. Emphasizing project delivery, Clarizen promotes collaboration as a tool to support execution rather than as an end in itself. Rally Software helps manage development projects for agile application software. There are many others.

Other collaboration centric. There's a long tail of vendors offering point solutions for cloud collaboration. Cisco WebEx remains a leader in web conferencing, though it has abandoned its ambitions to transform that presence into multi-function collaboration platform. Citrix Online is the other major player here, while there's a new generation coming along targetting smaller businesses, including AnyMeeting and Fuzebox. There are a plethora of collaboration and file sharing vendors serving a variety of markets. A long-established US example is Central Desktop, while a more recent arrival from Spain is Zyncro, which tags itself 'Your Enterprise Social Network'. Asana, founded by Facebook alumni, has made a splash in Silicon Valley. Others springing up focus on video and photo sharing, messaging or social streaming.

Other process/activity centric. Finally, a chance to mention Salesforce Chatter, which brings social streams to Salesforce.com users as they go about their work. Enterprises that don't want to be tied to that vendor can consider Tibco's alternative Tibbr, or one of the earliest social business pureplays, Socialtext. Such vendors (and their customers) are working the coalface of getting interactions between people to tie up to processes and transactions that achieve enterprise goals. A cloud startup with a unique approach to bridging these gaps is RunMyProcess, for whom [disclosure: as a paid commission] I wrote a white paper (PDF) in 2011 exploring this fascinating issue.

Other document-creation centric. When everyone's mobile or tablet has a built-in camera, the word 'document' has to be interpreted liberally to include video, audio, images and diagrams. But I dislike using the word 'content' as that implies something passive to be retrieved and consumed, whereas a document in an enterprise context is something to be acted upon or transacted. Using the term 'enterprise content management' (or for that matter 'web content management') encourages a mindset of passive storage whereas organisations today need documents (and web pages) to actively contribute to outcomes.

Therefore, document creation has to be closely tied to collaboration and process. This is a big opportunity for both Microsoft and Google, as discussed above. You'd have thought it would be for Adobe, too, but despite early ambition it has made little headway with its Acrobat.com online offering. Even the addition of electronic signature platform EchoSign seems only to have allowed its rival DocuSign to prosper (much as I predicted, I might add). Even less has been heard from VMware, which looked like it might have had some plans in this direction with its acquisitions of Socialcast, Sliderocket and Zimbra. That leaves Zoho as the other major player here — claiming more than seven million users worldwide — but with much more of an SMB focus. Another long-established player in the SMB space is HyperOffice, and there's a long tail of photo, video and other point solutions.

None of this makes it easy to select the best combination of solutions to meet the specific needs of any individual enterprise. The one certainty is that the landscape will change some more, while buyers will become aware of changing needs as they discover new possibilities. Flexibility and openness therefore have to be watchwords, as change is inevitable.

No wonder Gartner says the typical CMO will soon be spending more on IT than the CIO. It's not that the CIO is spending less. It's simply that the CMO has so much that could never before be automated and now, suddenly, all of it and more has to be automated in double-quick time, just to stay competitive.

This transformation is a gift to cloud providers because all these interactions are happening on their territory, beyond the enterprise firewall, where traditional enterprise software is fearful to tread. The proliferation of smart devices and online interaction has extended CRM processes out into the hands (literally) of prospects and customers.

Nowadays buyers intensively research the market before they ever speak to a single salesperson — and the moment they do make contact, they expect a personalized, responsive relationship, delivered direct to their Web browser or mobile app. The trend of consumerization makes this true no matter whether they're shopping for a designer purse for their own use or a satellite launch system for their employer.

Any enterprise that's not tracking online interactions, mobile apps and social media buzz — and using in-depth analytics to maximize its understanding of online and offline interactions — risks appearing ill-equipped and out-of-touch.

Redefinition of CRM

This is my second blog post in a series on how the old, established categories of enterprise software are being recalibrated and replaced to match modern needs. My last post was on the death of conventional ERP. Upcoming posts will look at collaboration, HR, spend management and more. Today's deals with the redefinition of CRM.

This is a huge topic. The expansion of CRM beyond the confines of the enterprise means that today it encompasses digital and social marketing, website management and mobile apps. It has to join up across sales interactions, service calls, invoice queries and warranty claims. It has to collect and act upon a bevy of external social media and information resources. It must deliver a great customer experience across multiple direct and indirect touchpoints.

An overview of this massively expanding field can barely do it justice. For far more detailed and knowledgeable analysis, the pre-eminent authority in this field is my ZDNet fellow-blogger and Enterprise Irregulars luminary Paul Greenberg. He has just announced the 2013 finalists of his celebrated CRM Watchlist. Over the next few weeks he will be revealing the winners and reviewing them in characteristic and inimitable detail. Two more must-follow experts in the field are Brent Leary and Denis Pombriant.

Here is my brief commentary on what to expect in 2013 from the cloud's leading CRM vendors. As before, please use Talkback below to add your feedback if you feel I've missed any significant players but remember that this review is strictly cloud-only and does not include hosted versions of on-premise software. Nor will I include SMB solutions unless mentioned in passing.

Finally, as ever, I must disclose that some of these vendors, including Salesforce.com, are past or present consulting clients and may have funded my travel to attend their events. Others brief me over lunch or dinner from time to time, and several work with me in the EuroCloud trade association. They all know not to expect any favors from me in my independent writing, but a closer relationship inevitably gives me more awareness of their business than those of vendors I speak to less frequently.

Salesforce. There is only one 800lb gorilla in the jungle of cloud CRM: Salesforce.com. So much so that a few months back, I accused the company of turning into a latter-day Oracle in its pursuit of growth. It certainly has the scale, expense-account sales teams and corporate relationships of a classic enterprise software vendor. It's so dominant in its core domain of cloud-based salesforce automation that few dare to challenge it there, while it's built considerable strength in the neighbouring domain of customer service. As the largest and best known pureplay cloud vendor, it has long been the pre-eminent evangelist of cloud applications in the enterprise, and more recently of social business.

In this context, the main thrust of Salesforce.com's platform play has become been to straddle the gap that separates enterprise sales and services staff from their prospects and customers, connecting their operations into the realms of cloud, mobile and social. And in focusing on that mission, it has left it to others in and beyond its ecosystem to innovate at the further reaches of digital and social marketing. That's why, when it launched its own Marketing Cloud offering last year in the wake of its acquisitions of Radian6 and then Buddy Media, there was a sense of it wading, with little aplomb, into territory staked out by others. Of course there's time to put that right; many scoffed at Service Cloud when it was first launched, and now it's a half-billion-dollar-a-year business.

Salesforce's strength is in innovating within the fabric that connects the enterprise into cloud, mobile and social, rather than at the bleeding edge. The continued development of creations such as Chatter, Site.com, and the entire Salesforce platform with its fluid APIs will consolidate its lead in that role and give it plenty of scope for continued growth in 2013.

Other CRM. The only cloud CRM vendors that dare challenge Salesforce.com do so from a distance, literally. Salesboom is based in Canada, Zoho is run from India, other smaller rivals such as Really Simple Systems and Workbooks hail from the UK. Most target the SMB market, touting their relative simplicity as a selling point. Enterprise rivals tend to be on-premise or hybrid offerings such as SugarCRM, Oracle CRM OnDemand and Microsoft Dynamics CRM, which puts them beyond the scope of this cloud-only review. SAP Sales OnDemand merits a call-out as a fully multi-tenant offering, but despite a striking UI, it has so far proven of muted appeal, even among SAP's existing customers.

Oracle deserves separate mention for the strategic positioning of its offerings and in particular for its pending acquisition of marketing automation vendor Eloqua — a major foray into unadulterated multi-tenant SaaS territory. I mentioned earlier that CRM has extended into new fields, and Oracle's acquisitions are strategic beachheads in the most important of them. Eloqua was an early pioneer and became market leader in the now substantial field of digital marketing automation. It will make an interesting complement to Oracle's mid-year acquisitions of social marketing and analytics cloud vendors Vitrue and Collective Intellect. RightNow, acquired a year ago, spanned multiple touch points from traditional contact centers to social media.

Finally, of course, Oracle cannot be overlooked as the leading player in enterprise CRM. It claims that its CRM OnDemand and Fusion CRM applications can run as multi-tenant apps, but in my book if customers run the same code for on-premise deployments, it hugely dilutes the effectiveness of the cloud app.

Other cloud marketing. When I first wrote about enterprise software pivoting to new stacks, I cited Marketo as a leader in a market that had barely existed a decade ago. That market, in which Eloqua also plays, is still evolving fast, with Marketo acquiring social marketing vendor Crowd Factory last year, while other, younger competitors snap at its heels. I do a disservice to several strong vendors in lumping them all together like this, but space constraints give me no choice as I mention in passing up-and-coming names like Pardot and HubSpot, along with Genius, Aprimo and others. A separate mention goes to InsideView, which feeds externally collated information into sales and marketing automation applications to further help identify the most promising and timely prospects.

More cloud marketing. While the boundaries are blurred, I have opted to carve out a separate set of vendors who are more centered on email marketing management, such as ExactTarget, Emailvision and Silverpop. Many of these focus on SMB buyers, including Constant Contact, VerticalResponse and the rapidly growing MailChimp. There's much innovation at the SMB level including Nimble and InfusionSoft, which recently garnered substantial venture backing.

In this section I also mention website cloud platforms, even though it's a highly fragmented category in which none of the players are particularly large and they tend to specialise in specific niches. Examples include CrownPeak, Agility CMS, Clickability (now renamed Limelight Dynamic Site Platform), Echo and Alfresco in the cloud.

While most enterprises prefer to build and manage their own websites, I suspect that the increasing demands of engagement automation, social and mobile will make the homegrown approach less and less sustainable, creating a large market gap that is currently ill served. Interestingly, Salesforce.com introduced an offering last year for just this market.

Cloud customer service. Finally, I once again have too little space to do justice to a massively innovative set of vendors that are bringing social dynamics to the arena of customer service. Vendors such as helpdesk platform ZenDesk, which raised $60 million and is said to be prepping for an IPO this year; Assistly, which became Salesforce Desk; crowdsourced support platforms led by GetSatisfaction and Lithium. More innovation comes from cloud-based call center services including LiveOps and NewVoiceMedia.

Each of these vendors exemplify the scale of transformation in CRM. The center of gravity has moved away from internal efficencies and centralized reporting to enabling closer, more timely and contextualized interactions with prospects and customers. I don't pretend to know how this is all going to pan out; I don't think anyone can. This transformation remains a work in progress, with much innovation still to come before new best practices become established — and cloud platforms are playing a leading role.

The background to this statement is that enterprise software is changing, and the old, established categories no longer match today's enterprise needs. I first wrote about this trend more than a year ago, but this is the first time I've attempted a systematic review of what's actually happening in the market.

The biggest selling point for all of them, though, seems to be the flexibility of cloud platforms and the speed with which vendors can continue to introduce new features and functions.

This blog post is the first in a planned series covering various enterprise application categories. What follows below is an overview of the leading SaaS vendors in the category historically known as ERP. Prospective buyers may well use the term to describe what they're looking for. But in today's highly automated, ubiquitously connected business environment, they need much more than conventional ERP has ever delivered.

The simplest term for this category is financials-plus. No one seems to offer enterprise customers a product that does just financials alone. But neither does anyone offer the full gamut of traditional ERP functionality. Instead there are several combinations that crop up frequently: financials-plus-ecommerce; financials-plus-manufacturing; and financials-plus-PSA (professional services automation).

No one seems to be pursuing financials-plus-CRM, but most offer close integration with Salesforce.com. Many offer global financial consolidation, building on the global reach of cloud, and built-in or bolt-on analytics are frequently seen, with drill-down into the real-time data available from the cloud system.

The biggest selling point for all of them, though, seems to be the flexibility of cloud platforms and the speed with which vendors can continue to introduce new features and functions.

A new acronym, 'FRM'

My preferred term for this category is financials and revenue management, which can be shortened to a new acronym, 'FRM'. It's intended to cover the core requirement of managing a company's financials along with the related task of measuring and collecting its revenue, which allows me to consider conventional financials-centric vendors such as NetSuite, Workday and SAP alongside others that center their offerings on ecommerce or subscription billing, such as Zuora.

Here, then, is my commentary on what to expect in 2013 from the cloud's leading financials and revenue management (FRM) vendors. If you feel I've missed out any important players or points, please use Talkback below to add your feedback.

For reasons I'll discuss in a later post (and which you can guess from prior posts), this review is strictly cloud-only and does not include hosted versions of on-premise software. It also focuses on the enterprise market so don't expect to see SMB solutions mentioned here except in passing.

Finally, as a matter of disclosure, I must add that some of these vendors, including NetSuite, SAP and Workday, are past or present consulting clients and often fund my travel to attend their events. Others brief me over lunch or dinner from time to time, and several work with me in the EuroCloud trade association. While they all know not to expect any favors from me in my independent writing, it's inevitable that a closer relationship means I'm more aware of their business than those of other vendors I speak to less frequently.

NetSuite. Both by revenue and by size of customer base, NetSuite has every reason to claim to be the leading cloud ERP platform. It has built its business on becoming a robust platform on which an enterprise can run its financials, to the extent that it's a favored choice of recently listed, venture-funded public companies in the US. So if it's not ERP, what is it?

"This is a business enablement system," according to CEO Zach Nelson. The advantage of running on its own cloud infrastructure is that NetSuite can offer globally dispersed users a real-time view into a shared transactional core. This means it can act as a live operational platform for the entire enterprise and not merely as a system of record for the finance department. While that's true of any cloud platform, NetSuite has always offered both CRM and ecommerce functionality alongside financials, which allows it to connect the core transactional data all the way through to an enterprise's online and offline interactions with customers, suppliers and partners (it also has a significant offering in professional services automation and also recently introduced a subscription billing capability, so it is financials-plus in several directions).

During 2012, NetSuite has been rolling out a big bet on that end-to-end interaction between financials and ecommerce. For a long while, ecommerce had been the neglected component of the suite, to the extent that its database-driven pages still carried a '.nl' suffix, echoing the vendor's original name, NetLedger, which it had changed in 2003.

May 2012 saw the launch of SuiteCommerce, a complete overhaul and updating of the platform to give it the flexibility to support modern ecommerce needs, including mobile clients and social media. It's been a careful roll-out, on early release to just 100 customers, but as each of those customers bring their new ecommerce presence online, they are becoming case studies that help NetSuite promote key features of its offering. This will build a crescendo of marketing for SuiteCommerce as it enters general availability halfway through 2013.

With ecommerce an increasingly painful problem area for many companies struggling with the pace of change in both B2B and B2C markets, Nelson believes SuiteCommerce will have wide appeal. It will certainly open up new segments of retail for NetSuite and further extend its footprint in distribution. It will also give it a further beachhead into larger enterprises, where NetSuite is promoting use of its platform in a 'two-tier' configuration alongside existing on-premise ERP systems that are less well equipped for rapid introduction of new business functionality.

Workday. There will be more to say about Workday in a later post about SaaS HRM vendors. But although Workday has led with HRM, it has been just as committed to bringing its financials offering up to speed, to a point where it can supplant rival products from established ERP market leaders SAP and Oracle. From announcements made at its Workday Rising event in November, it looks like 2013 will be the year in which Workday Financials will hit its stride, with some banner customer wins to announce.

Workday's average customer size is much bigger than NetSuite's, so although its customer base will remain smaller in number, its revenues could catch up quickly over the next few years, now that it has completed its IPO. Expect its relentless progress to continue in 2013.

In common with other cloud FRM vendors, Workday looks beyond conventional ERP to enable operational decision-making and flexibility, with a philosophy of providing transactions, governance and analysis all in the same system.

"We focus it much more on business information, not just the debits and credits of traditional systems," says Mark Nittler, VP financial product strategy. It too is extending its footprint in 2013 into related application areas, in its case adding a significant 'big data' capability to bring external data into the purlieu of its built-in analytics.

Plex Systems. Detroit is a long way, in many senses, from Silicon Valley. That may explain why Plex Systems gets a lot less attention than vendors like Workday and NetSuite. But with several hundred customers, it's still a significant cloud ERP player, and gleaned some rare Techcrunch coverage last month when it scored a $30 million VC investment from Accel Partners, who join main backer Francisco Partners, the private equity firm that bought the company last June.

In its 12-year history as a SaaS pureplay, Plex has plowed a determined furrow as a cloud ERP provider to manufacturing industry. It is strong in automotive, aerospace, electronics, general manufacturing and food & beverage, primarily thanks to a highly flexible platform that allows it to rapidly add new features requested by customers. With this latest funding under its belt, expect Plex to make further strides in 2013.

SAP — Business By Design and Financials on Demand. Another cloud ERP player that's often overlooked is SAP. The company has made big investments in developing cloud offerings, especially in the Business By Design platform, which was conceived to go beyond conventional ERP and deliver end-to-end cloud business automation to midmarket enterprises.

Although very small as a proportion of SAP's total customer base, the global installed base of Business By Design is a similar size to that of several other vendors on this list. But the product has had a troubled history, forcefully demonstrating the truths set out in Clayton Christensen's The Innovator's Dilemma. Buffeted by corporate strategy shifts, it has suffered major technology upheavals and has struggled to win the support of the sales and partner channels alongside conventional products in the company's line-up.

In 2012, a new shift took place with the spin-out of its financials component as a separate Financials OnDemand product. At least this creates a bit more clarity in SAP's cloud line-up, so perhaps 2013 will finally prove to be the breakout year; but don't hold your breath.

Intacct. A long-standing midmarket SaaS financials provider, Intacct raised a further $13.5 million funding round in October. It has been successful in partnering with accountants to market its products, and like other cloud vendors has extended functionality into areas such as revenue management, project accounting and global consolidation.

FinancialForce.com. Having chosen to build its software on the Salesforce platform, FinancialForce.com is tied to the fortunes of Salesforce.com. That isn't necessarily a bad thing, since that gives it a big, ready-made market to target, and its customers can easily integrate its financials and professional services automation with other native apps running on the platform, including Salesforce itself.

In September, VP of product marketing Tom Brennan summed this up in his own FRM acronym: 'Financial Relationship Management' — the close integration makes it possible for users such as customer service agents to be given direct access to financial transactions from within the CRM environment and rapidly resolve issues on the spot.

Zuora. At the same time as evangelising the growth of the 'subscription economy', executives at Zuora freely canvass the death of ERP. They argue that ERP has never served the revenue management needs of subscription businesses, and as more and more enterprises move away from product sales to the subscription model, they'll need to run their businesses on a platform like Zuora's Z-Business suite.

The latest version, launched in September, added a finance component alongside its existing subscription management and billing modules, providing accounting and revenue recognition data that's ready to feed into third-party financials apps. For enterprises that run their business on Zuora, financials becomes an add-on app used by the finance department rather than the core of the business operations platform.

Other financials. Other cloud ERP vendors to watch include two that have targeted the manufacturing sector, both building their products on the Salesforce platform: Kenandy, founded and led by MRP software veteran Sandy Kurtzig and Rootstock, which (intriguingly) built its app first on NetSuite's SuiteCloud platform and then switched. Brightpearl targets retail.

I have a nagging feeling there are others I've missed, so please prompt me with a Talkback post if you know of any deserving a mention. However as I said above, I don't include hosted applications such as Microsoft Dynamics, and Epicor, although Infor may get a pass for a well thought-out hybrid strategy. This is a survey of enterprise vendors so I haven't included SMB solutions such as Intuit and impressively fast-growing Xero, which landed a $49 million venture round in September to fuel its US expansion. I'm a user of Xero and like it a lot but it seems to me that smaller SMBs, as ever, get a raw deal: unable to afford the integrated financials-plus solutions offered to larger enterprises, they are left to sort out for themselves how to integrate their core bookkeeping with the rest of their business.

Other revenue management. There's a 'long tail' of billing and ecommerce vendors. Cloud billing vendors include the likes of Monexa, Metanga, Aria Systems and Chargify, down to Saasy and CheddarGetter for SMB. A big SMB player in invoicing is Freshbooks. Others will get a mention in a later post on spend management. On the cloud ecommerce front, Demandware and Venda are significant enterprise players, while Shopify is strong as an SMB player. Here again, I'm sure I've missed some notable players. Please add your nominations in Talkback below. 

• Liam Maxwell, Deputy CIO of the UK Government, cited a torrent of examples of how IT procurement had gone wrong in the past, such as a project that had that cost £55 million ($89m) yet only had 79 users, or a system where each transaction ended up costing £790 ($1280) to process. All of this adds up to the astonishing statistic that the UK spends one percent of the country's entire GDP just on government IT — "on pushing paper around in government," as he put it. It's a number so huge that several reporters have assumed he must have meant IT spending throughout the economy, but I've checked and this figure is the public sector proportion alone — in the region of £14 billion ($22.7bn) a year. Around £1.2bn ($2bn) alone is spent just on hosting.
• Maxwell explained that the aim of the government's G-Cloud initiative was to dismantle the prior system of complex, lengthy procurement processes that effectively gave large suppliers a license to create these massively costly projects. Now that public sector buyers can browse the CloudStore to source pre-accredited cloud providers and services, there is competition among a much wider spectrum of suppliers. He gave the example of a project that had been quoted from a traditional supplier at £57 million ($92m). On being told that the same could be sourced from CloudStore at less than £1m ($1.6m), the supplier provided a new quote of £2m ($3.2m). "The cost savings we're able to identify at the moment are enormous. Those have come through CloudStore," he said.
• Dominic Campbell from 20-person small business FutureGov (SME) described the impact of its Patchwork cloud app, which allows more frictionless co-ordination among different workers in multiple agencies involved in child protection in the county of Staffordshire. Putting the app on CloudStore overcomes procurement barriers, while using the cloud to connect care workers, teachers, police and other professionals allows them to share crucial information in a timely way.
• Mark O'Neill from the Government Digital Service said that he used to manage 120 separate servers for a user base of 500, and yet for what he used to spend on each server he can now have thousands of servers available in the cloud. He went on to cite an example of secure hosting for a highly sensitive project being sourced from G-Cloud for one-tenth the cost of a traditionally sourced alternative.

Yet despite the cost, convenience and process improvements available by adopting CloudStore solutions, buyers are still resisting attempts to persuade them to use CloudStore. It's as though they feel the promised benefits are too good to be true, or that it's simply too easy and there must be a catch.

Denise McDonagh, Home Office director of IT, said that many public sector buyers were so used to the complex red tape of established practices that they find it hard to break out of them. Many simply assume that using CloudStore is somehow against the rules that apply to their own organisation. One buyer who had complained CloudStore was too difficult to use was found to be going through 47 separate steps imposed by internal procurement processes, most of which were irrelevant for CloudStore. McDonagh spoke directly to buyers in the audience, seeking to reassure them: "G-Cloud is legal, it's here, it's an open competition, therefore it's very, very competitive ... What can be commoditized should be bought from the cloud."

The problem is that the vast majority of people still seem to believe that cloud somehow isn't for them. Despite the growing maturity of cloud solutions and the backing they receive from thought leaders across government and industry, the world is not yet ready for cloud.

Meanwhile, even such well-meaning initiatives to speed take-up of cloud run the risk of getting derailed. Maxwell warned of the danger that the recently announced European policy on cloud could reintroduce barriers to competition: "We as a government have a strong disagreement with the EU cloud policy," he said. "We don't think recommending a single certification will work. It will drive government back into the arms of the big SIs."

One of the European Commission's lead policymakers on cloud, Ken Ducatel, was in the audience and later explained that, "We're just trying to make sense of what's going on. It's not our intention to impose certification schemes." But the committee set up to advise Digital Agenda Commissioner Neelie Kroes on a framework for public sector cloud procurement is dangerously skewed towards established big ICT suppliers, including Accenture, ATOS, SAP and Telefonica.

So even when the argument for cloud seems overwhelming, it may still fail to win ground against the reticence of cautious buyers and the inertia of established processes and power relationships. There is still a long road to travel before this battle has been won.

As a reminder of what we'd miss out on if cloud gets bogged down like this, I'll leave the last word to Mark O'Neill and his vision of what IT procurement could become:

"This is about fundamental business disruption. G-Cloud, the CloudStore, is starting to become, not just a store to provide IT services, not just about the technology stack, it's becoming more and more about meeting a particular user need. I'll be able to fulfil business needs with services from the CloudStore. That's a fundamental shift."

Yahoo's first iteration, back in 1994, was as a directory of the Web — hardly an earth-shattering idea, though much needed at the time. Back then, people really did spend hours just surfing the Web, serendipitously following links to see where they ended up. Yahoo filled this vacuum with its burgeoning directory of sites, but it was only useful if you already knew where to find what you were looking for. It was only when Infoseek and similar crawler-driven search portals brought keyword searching that it suddenly became possible to easily discover useful information online. For the first time, I could see some real value in using the Web.

At the time, the main reason people used the Internet was for email, which usually came bundled with their Internet access. This was the key to the success of AOL, which at the time also controlled and guided its subscribers' online experiences with a so-called 'walled garden' of curated content. Yahoo, Infoseek and the rest were seen as 'portals' that people used to access 'cyberspace' as we called it then in deference to the science fiction of William Gibson. To complete its portal offering, Yahoo acquired webmail provider Rocketmail, becoming for a while the trendy alternative to an aol.com email address.

By 2001, Yahoo needed a new boost, but since conventional wisdom said its future lay in becoming a content and media property, it hired former Warner Bros executive Terry Semel as CEO. This is where it really lost its way in my view. This period coincided with Google's rapid rise on the back of hurrying users off its clean, content-free home page as rapidly as possible — the antithesis of a destination. Interestingly, the architect of that clean home page design was one Marissa Mayer, who this year became CEO of Yahoo!

Today's conventional wisdom has gone full circle and we're back-to-the-future of walled gardens. In this dystopian parallel universe (I'm thinking part 2 of the trilogy), people keep directing me to a destination called Facebook, where I have to log in to view their content (I don't, on principle). Or they interrupt my iPad browsing to have me load another app, wanting to make me hunt for information across separate silos, just like I used to on my PC in the 1980s. Like Anil Dash, this makes me nostalgic for The Web We Lost.

If Yahoo! stays true to its history, it will once again follow conventional wisdom and aim to erect its own garden walls to keep users inside its web properties. But my hope is that, with Marissa Mayer in charge, it will buck the habits of its corporate lifetime and take a leadership position for once, skating to where the puck's going to be instead of hanging back with the pack. There is a gap in the market today, somewhere among the spaces inhabited by IFTTT and App.net. In amongst the walled gardens of social and mobile, I have a hunch there's a free space — a connected universe of open web services — that Yahoo! can become the directory and the glue for.

"We are pretty darn profitable right now. Our growth is not constrained right now because of lack of finances," CEO Kohlhardt told me in a phone conversation last week. And he has no regrets about their chosen path: "We are able to focus on what we're passionate about rather than what VCs and investors think we ought to be doing ... Our goal is not to make some investor 10x their money back. Our goal is to build products that we love."

The company's product is a browser-based tool for creating diagrams and charts. Available both as a cloud application and as a downloadable plug-in for Australian software maker Atlassian's Confluence documentation wiki, Gliffy is a popular and less costly alternative to Microsoft Visio. It is mostly used in planning and documenting software development, business processes and organisation charts, with an emphasis on functional business graphics such as diagrams, flowcharts and wireframes.

"The types of people using our product are not just software developers. They're more trying to explain to developers what they want built," Kohlhardt explained. That emphasis on expressing ideas visually is likely to guide Gliffy's product evolution over the coming year, he added. "I'm really interested in taking the product beyond what Visio offers and help people really visualize what's in their head."

For the past year, the focus has been on a major port from Adobe Flash — which had been the only viable option back in 2006 for a browser-based drag-and-drop graphics tool — to become a native HTML5 application. Gliffy claims the result is one of the most sophisticated business applications now available on HTML5. While that effort has put development of all-new features on hold, it now paves the way for rapidly introducing mobile and tablet versions and has had other notable effects. The new version runs twice as fast, for example, and developers can be more productive because there's no need to compile to see the results of their work, as had been the case with Flash.

With the move to HTML5, it's also proven far easier to hire people, said Kohlhardt. "Developers have hated Flash for a long time for lots of different reasons. That was always a painful thing in terms of trying to hire people and get poeple excited about our product. Once we started talking about wanting to move onto HTML5 that changed a lot of things."

The finished HTML5 code was released last month for the Confluence plug-in and will come to the cloud version early next year. The Flash version remains available for customers with older browsers, such as IE8, which don't support HTML5.

The Confluence version came first because it represents a key part of Gliffy's customer base. An early tie-up with Atlassian was instrumental in Gliffy's success as a venture. At the beginning, "We weren't really interested in selling, we weren't really interested in raising money," said Kohlhardt. "The first thing to do was to get the product out there." After pitching the tool as an add-on to wiki makers such as JotSpot (which soon after became Google Sites), the idea came up to approach Atlassian.

The founders emailed Atlassian's generic 'info@' email address and got a reply from co-founder Mike Cannon-Brookes, saying that he happened to be in San Francisco at the time. With his help the team integrated Gliffy with Confluence and soon started growing a healthy revenue stream, which has since been supplemented by online sales of the cloud app.

So although being in San Francisco hasn't led to venture funding, it was instrumental in making the connection that secured Gliffy's future. Perhaps those streets really are paved with gold, after all.

A case in point comes in Concur's announcement today of an add-on to its travel and expense management SaaS offering that guarantees compliance with UK tax rules on value-added tax (VAT). If you don't do bookkeeping for a UK or European business, you will have no inkling of the wilful complexity of VAT rules, so you'll just have to take my word for the daily tear-your-hair-out impenetrability of the regulations inflicted on us by the tax authorities here.

The new Concur service removes that entire burden, automatically ensuring compliance as well as making sure the business reclaims all the tax it's entitled to. But what caught my eye in Concur's press statement was the description of what lies behind the automation: "...a dedicated team of compliance experts focused on ensuring VAT rates and rules are constantly monitored and updated. This combination of best-in class technology coupled with deep tax and compliance expertise is unique in the marketplace and provides SMBs with a distinct advantage over traditional technology solutions."

This is using the cloud to do what it's best at — providing access to a pooled, specialist resource that would be hugely more costly to implement separately for each individual business. It wouldn't be possible to do this without the software (nor the cloud), but it's the addition of live expertise that completes the service. Too often, SaaS providers make the mistake of stopping short of going that extra distance. They provide the software and leave it to their customers to add the final touches that deliver a business outcome. But that's an old, traditional-technology approach that fails to exploit the real competitive advantage of the cloud.

Instead of thinking about software when designing a service, cloud providers would do better to think first about the business outcomes they aim to deliver. The cloud allows you to rethink entire business processes rather than simply replicating traditional technologies as SaaS. True innovators see software as just one part of the means to the end. When payroll provider ADP's founder Henry Taub first started processing payrolls as a service, the company didn't even use computers, as Tom Foydel wrote last year: "They were actually doing payrolls on adding machines and delivering them by bus in the earliest days."

There's something else worth highlighting in Concur's new tax compliance service: it's guaranteed. Back in the days of conventional on-premise software, the only warranty you got was for the disks it came on. Getting it working was at the customer's own risk, let alone achieving a productive result. The move from software products to cloud services introduces an entirely new relationship with customers in which providers not only deliver outcomes but are even prepared to guarantee them. 

Fortunately, we are starting to move past the hype cycle peak of social media into an era of greater sophistication (indeed Dalton Caldwell has written an interesting analysis of what 'like-gate' tells us about Facebook's strategy to filter and then monetize our attention). Another sign of that increasing sophistication is today's announcement of a tie-up between tweetstream analytics platform DataSift and link shortener Bitly. Under the deal, DataSift is combining Bitly clickthrough data with its privileged access to the historic tweetstream, giving its customers the ability to find out which retweeted links actually get read. Bitly brings a surge of new material for DatSift to crunch in its big data cloud, as CMO Tim Barker told me in a phone call earlier this week: every day, Bitly users add around 80 million new links every day and Bitly links receive 200m new clickthroughs.

This at last gives some insight into the interests of passive social media consumers — using the 90:9:1 rule, that's the 90 percent who just glance at their streams as opposed to the 10 percent who retweet and the one percent who add content of their own. The disparities can be surprising, as Hubspot's Dan Zarrella recently noted: "many people will retweet a tweet with a link without even clicking on that link" (hat-tip TheNextWeb). Quantifying the pass-the-parcel nature of social media, he found there's no meaningful correlation between the number of retweets and the number of clickthroughs for a given link.

DataSift customers will now be able to benchmark the effectiveness of their Twitter campaigns in terms of engagement rather than simple reach. They'll not only have their own web analytics to know how many visitors came to them via Bitly, they'll also be able to see how their competitors did with similar campaigns. The value for CMOs, said Barker, is that they can look at clickthrough data to see what types of content engages most and thus have more insight into what kind of content is relevant to customers.

The Bitly tie-up comes hot on the heels of a new $15 million funding round DataSift announced earlier this week. Having acquired around 300 customers since Barker joined at beginning of the year, it has proven there is demand for the social data and analytics it provides. Customers fall into three main categories:

• Cloud application companies building commercial apps that consume social data for enterprise use
• Digital and media agencies
• Enterprises in industries such as financials and consumer brands

Interestingly, Barker mentioned that DataSift had been surprised to find how often organisations seem to lack the in-house smarts to put DataSift's output to productive use. "You would think you could take this raw technology to [for example] any hedge fund in the world and they would take it from there. What we've found is that we need to become a bit more prescriptive. We've invested in building a model that gives them a curated stream of content. Companies are in such an early stage of understanding that providers need to become more out-of-the-box. We need to package it up in a way to make it easier to action."

Thus DataSift is not only packaging up the output from its data as a service, but also includes the smarts of its data scientists in that package so that customers can quickly start getting results. "We can invest in a data scientist team that can solve problems that exist across companies," said Barker. "You need to be able to give [new customers] the five insights that are going to give them the quick wins."

These companies are fast movers. Workday currently has 3.3 million workers on its system across all its live customers. Interestingly, there's a high level of turnover and change in that figure: 1.2 million were recruited in just the past year, and 1.4 million of them have had some kind of change in their position or package. Look over the customer list and you'll see why: there are many fast-growing companies, and two of the biggest customers, Flextronics and Chiquita Brands, skew the figures with big migrant labor or seasonal workforces. Evidently, one of the factors in choosing Workday is having higher-than-average rates of change, and thus a need for a more flexible, scalable system.

Many are disruptive innovators. Newly announced customer TripAdvisor, which late last year became the first listed company to go live on Workday Financials, inevitably gets called on frequently as a reference by established companies considering a move to Workday. Few of those callers are familiar with TripAdvisor's size and complexity: spun out of Expedia in an IPO last December, it is now up to three-quarters of a billion dollars in annual revenues, with 1400 employees across 35 separate businesses, many of them overseas. This technology-driven, Web-based, social-media publishing business literally could not have existed just a few years ago, yet today already it's a multi-million-dollar global brand. To maintain its growth and agility, it relies on a raft of cloud applications; as well as Workday, it runs Salesforce.com, Taleo, Zuora and DoubleClick DART. In fact the only part of its IT estate on its own infrastructure is the web farm that runs its online properties and the big data analytics that help it maximize returns.

They work with live data. Helping customers make sense of up-to-date business data is a theme that keeps cropping up in my work with vendors lately. Workday has been at the forefront of building analytics into the fabric of its applications, enabling users to not only track metrics and trends but also drill down directly into the underlying business records. The next step is to connect those insights into other applications and datasets in the business. This week Workday announced custom objects and fields to enthusiastic applause from its customers, while the unveiling of big data analytics capabilities drew more muted acclaim. Both will help customers bring ever-increasing volumes of external data into the realm of Workday analytics to help them make better informed and more timely business decisions.

They expect continuous improvement. Having opted for the speed, agility and on-demand responsiveness of a cloud platform, customers rely on their chosen vendor maintaining the same pace going forward. One of the most remarkable things about watching a cloud vendor like Workday evolve is the extent of innovation that happens in the underlying infrastructure. These are not static structures. New components are constantly being introduced that advance performance, scalability and functionality — not just the three-times-a-year functional updates but architectural advances too. This week, Workday talked about some significant changes it has made this year, including a decision to move much of its core data store from mySQL to the more efficient, highly distributed Basho Riak NoSQL database technology. David Clarke, VP technology services, explained that the move will allow Workday "to store many petabytes of data across multiple data centres," adding to fault tolerance as well as scale. Such a move would simply not make sense in a conventional single-tenant enterprise architecture and once again (as I gushed on video to Dennis Howlett) underlines why multi-tenancy allows cloud vendors to streak ahead of their on-premise competitors in the economy of operation, scale and performance they can make available to their customers.

First of all, a bit of context. In the tech industry, all eyes tend to be on the US and thus it's easy to underestimate the size and complexity of the European market. Europe is a bigger economy than the US — $17.5 trillion in the 27 EU member countries alone, according to World Bank figures for 2011, compared to $15 trillion for the US. So why does it have less impact in tech? The trouble is, it's far more difficult for any one business to exploit that market value (even a cloud business) because of the EU's 23 different languages, 11 currencies, and a myriad of different business regulations, practices and cultures. US tech companies find it much easier to scale up fast because they don't have to contend with such barriers.

Breaking down those national barriers to allow more business expansion and competition has been one of the main objectives of the EU ever since its foundation. In a sense, the EU is the political equivalent of cloud computing — instead of having lots of inefficient individual fiefdoms, the countries of Europe pool their sovereignty so they can have more agile, cost-effective and faster growing economies. Where the analogy breaks down however is that, whereas cloud computing is led by technologists and entrepreneurs, the EU is run by eurocrats and politicians.

The politician in charge of the EU's strategy for cloud computing is Neelie Kroes, Vice President of the European Commission and Commissioner for the Digital Agenda. She's in a hurry to make her mark before her term of office ends in 2014. Commissioner Kroes launched work on the strategy with a speech at Davos in January last year and was all set to announce the finished strategy this June when the final draft was delayed on the desk of European Commission President, Jose Manuel Barroso, who you may have heard of as a key player in the Eurozone crisis. Realising the potential impact an effective cloud strategy might have on growth in the midst of Europe's economic woes, he held up the strategy until he had made sure all of his colleagues in the Commission were ready to put their full weight behind it. The strategy was finally announced last month.

Who, you may wonder, is it that says this cloud strategy will stimulate growth? Step forward technology market researcher IDC, whose report (PDF) accompanied the draft strategy. The report estimates a €162 billion benefit to the EU economy by 2020 from implementing policy steps that remove barriers to adoption of cloud computing. That's almost three times the economic impact without policy intervention. And the cloud market itself will more than double thanks to policy actions, the report adds.

How can any politician dare argue with figures like that? €162 billion is equivalent to an entire percentage point of GDP, hugely significant at a time when growth is so elusive and yet so crucial to Europe's economic welfare. Suddenly, the stakes have become much higher. The politicians can't afford for their cloud strategy to fail. Yet in their eagerness to stimulate the growth of the cloud in Europe, is there a risk they'll smother it instead? It's up to the industry to speak up and make sure the proposed strategy doesn't kill it. Here are the key actions set to be delivered under the strategy over the next year or so:

• European standards body ETSI to co-ordinate work on reviewing the "jungle" of existing cloud standards to identify those necessary to deliver interoperability, data portability and reversibility
• Work with ETSI, ENISA and others to support EU-wide certification schemes for "trustworthy" cloud providers
• Defining model contract terms and service level agreements for cloud computing
• Establishing a European Cloud Partnership designed to provide consistency in how the public sector purchases cloud services across Europe

EuroCloud will stay close to the evolution of the strategy over the coming year and is (in my biased opinion) an important channel for the industry to make its voice heard — especially the mass of smaller players who can't afford their own lobbyists. Meanwhile, if you're in London next month and would like to take part in a fun debate about the many serious issues raised in this blog post, check out the details of EuroCloud UK's November 14th meeting.

Is Salesforce.com following a similar path? It started out as a fast-growing SaaS application company. Later it began to extend its reach as a cloud platform. But until recently, the extensions to that platform didn't encroach on its large ecosystem of partners. Whereas the new functionality announced around this year's Dreamforce conference trampled clumsily all over their territory:

• Salesforce Identity is planted squarely on the home turf of Okta's core offering
• The Marketing Cloud appropriates a term once popularized by Marketo and extends into functionality offered by a long list of similar vendors such as Eloqua, Hubspot, Pardot and others
• The file-syncing Chatterbox feature is both a slap in the face and a slight on its name for partner Box. Nor, do I imagine, was Google too pleased.
• Work.com is a challenge for HCM vendors building apps on the Salesforce platform, as well as longstanding performance management partners such as Xactly.

It's as though Marc Benioff and his management team suddenly realized that, in their quest to soar past $3 billion and aspire to $10 billion in annual revenues, they would have to graze several billion-dollar-plus opportunities on the front lawns of its closest allies. Pretty ruthless, huh?

But then maybe that's what it takes to succeed in the cut-throat universe of enterprise software. It's not for nothing that partnering with category leaders is traditionally known in the IT industry as 'dancing with the elephant'. As I wrote in my conclusion to the recent ZDNet debate on Salesforce.com's prospects, Oracle is the prime example and obvious model here. If it had never moved beyond its database roots into applications, ultimately swallowing arch-rival Peoplesoft in a hostile acquisition battle, it would never have sustained its breakneck growth and become the powerful industry force it is today.

Do not underestimate the extent to which enterprise IT buyers have dictated that trajectory. It's not just the desire for the simplicity of dealing with a single supplier instead of many — to have 'one throat to choke' when it comes to support, integration and upgrades. It's also the ease and familiarity of a single sales relationship that covers the core set of IT needs. So long as the market offers enough of a choice to be able to credibly threaten to walk away during price negotiations, buyers will habitually renege on those threats and stick with the relationships they know rather than embark on the risk and disruption of new, untested relationships.

So why be surprised when the leading light of the cloud revolutionaries eventually starts morphing into a multi-tenant reincarnation of the monolithic old guard? Meet the new boss, Same as the old boss. Until the buyers change their behaviors and preferences, the gravitational pull of old-world ways will inevitably divert and distort the charge of the new. Cloud still lacks the mainstream sway to bring about fundamental change. Even if it were prevalent enough, perhaps the advantages of size would still favor the single-platform behemoths over more diverse alternatives.

The trouble is, I can't help wondering if that's what we really want from the cloud. Way back in 1998, I wrote and published a report about the emergence of cloud computing (we didn't call it that at the time, of course, rather "An emerging model of online computing pioneered by application service providers (ASPs)"). One of the most widely quoted sentences in that seminal report predicted that once this model became established, "[Users] will access the applications they need, on demand, from online providers who will charge them by the second for the precise value of the features and resources they choose to use."

For all that I wish Salesforce.com well, I keep on being pulled back to that original vision, no matter how idealistic and impractical it may still seem today. My natural inclination is against the all-inclusive platforms that lock customers into convenient yet costly restricted choices and grant market hegemony to giant vendors. I want to see cloud realize the innovative potential, freedom of choice and cost efficiencies of a truly open, competitive, on-demand services landscape. That's why, even while I salute Salesforce.com's remarkable achievements, I personally keep rooting for the smaller guys, the loosely coupled guerillas that continue to push the boundaries and stretch the envelope of the cloud and all that it enables. 

Cloud is delivered on mobile, includes social. Ask a techologist for a definition of cloud and you'll soon get dragged into discussions of virtualization, automated management and even data center design. Ask a business person and they'll talk about the freedom of interacting with applications, resources and contacts without being tied to a physical location. The business people have got it right: what's important about the connected technology of the cloud is the incredible speed, agility and transformation it enables in business. Some people say cloud is a buzzword that is nearing the end of its heyday, but I think it will endure, not as a technology buzzword but as a layman's term for connected automation.

Many businesses will thrive because of cloud. Cloud, in its widest sense of being connected to a global network of on-demand resources, is transforming entire industries. Look at all forms of media and publishing, look at retailing, look at advertising and marketing, look at information technology. The businesses that are using the Web to pioneer new ways of delivering goods and services are growing fast — as Marc Andreessen put it so memorably, software is eating the world.

Many businesses will falter because of cloud. There's a dark side to all the successful trajectories of those new businesses; they're putting many established players out of business. The disruption has a negative effect on society, with massive capital investments reduced or written off, while thousands of workers have to look for new jobs — many having to retrain before they can do so. The trouble is, these established giants have spent up years building up influence in society and their leaders have the ear of policy makers.

Government will impede the progress of cloud. Only last month, the European Commission announced a new cloud strategy that aims to add €160 billion to the EU's GDP by 2020. To help it achieve this goal, policy makers want to regulate the cloud — and that's when they see it as a force for good. When they discover the disruptive impact on those established industries that are past masters at political lobbying, it's all too easy to see how governments will be tempted to clip the wings of cloud. Many governments across the globe are already curtailing their citizens' access to cloud resources. As economic pressures intensify, this will get worse, not better.

Cloud is neither public nor private. Since all businesses must be connected to compete in today's economy, the distinction between private and public cloud is illusory. All instances of information technology have to operate in the cloud. Those who realise they are public cloud providers will do a good job of it. Those who ignore their connectedness will continue to expose their customers and partners to the risk of compromised or lost data. Most organisations will rely on a mix of public cloud resources along with their own privately operated IT, with increasing reliance on third-party cloud providers as the industry matures.

Cloud is established, so less discussed by name. Ask a group of CIOs if their organisation uses cloud, and few will put up their hands. Ask them if they use Salesforce.com, Concur, Successfactors, WebEx and the rest, and most will confess they do. As cloud becomes increasingly mainstream, it will be mentioned less and less, simply because it will become the default means of operating IT. There's no need to explicitly mention something that has become commonplace. It's just understood.

So it was with the introduction of Chatterbox, the new file syncing and sharing add-on to the Chatter collaboration stream ("a Dropbox for the enterprise," as Salesforce is calling it), which will be available next year. The feature was demonstrated in the context of a story set at Virgin America, using the airline's plan to add a Chatter stream to its seatback touchscreens next year. The demonstration followed the creation of a map that was uploaded to the Chatter stream to help a frequent flyer find his way off a delayed incoming flight to get to his next flight connection. It's great to see the technology related to practical real-life examples in this way.

Of course, paramount in my mind while watching this was, how will this new Chatter feature impact other file sharing companies also targeting the enterprise space? In particular Box and Huddle, both of whom I follow closely. What struck me immediately is that what Salesforce.com has done with Chatterbox looks at the requirement from a very different angle.

Both Box and Huddle are explicitly aiming to replace traditional enterprise content management. Their products start from the file, and then build the collaboration around it. Chatterbox starts from a different point. The file syncing is an adjunct to the signals that are the core of Chatter, and the collaboration is not file-centric but signal-centric. That's because Chatter is grounded in the relationships and processes that flow between people rather than the documents they share. This is probably the right way around, and is something Box, Huddle and other document-centric collaboration vendors probably need to think hard about.

Something else for them to think about is a throwaway line that executive vice president of technology Parker Harris mentioned as he launched into the Chatterbox demonstration, which revolved around a Virgin America customer experience agent named Sherman using his Chatter feed. What Harris said was: "Sherman works in the feed." That of course is the holy grail for any collaboration vendor — or indeed for any enterprise software vendor. To become the app where employees spend the majority of their working day is a massively defensible position of market power. With today's announcements including Chatterbox, Work.com and Salesforce Identity (more thoughts to come later on those), the Salesforce platform, leveraging Chatter, is getting ever closer to that ideal position.

Some of them have been customizing Salesforce for six, seven years or more — ever since the first Sforce API and later iterations of the AppExchange platform (since renamed Force.com and now known simply as the Salesforce platform).

But there's a problem that begins to surface if you've made many small modifications to the core objects in your Salesforce instance — even though the platform continues to upgrade without breaking those customizations. It's known as technical debt — the gradual accumulation of dependencies and inefficiencies that can only be wiped out by investing in a retrospective clean-up of the code. The most frequent changes are made to the core account or opportunity objects in Salesforce, and each small change adds to the complexity of the next. Eventually you reach a point where even the smallest change must be implemented with the greatest of care to avoid impacting an earlier modification. That's the point at which you lose the agility you loved so much.

Today, cloud integrator Appirio is unveiling a tool that for the first time allows Salesforce customers to quantify the technical debt built into their instances. Cloud Metrics is an automated test that uses OAuth credentials to access a Salesforce.com instance and compare it to Appirio's database of over 1,000 Salesforce implementations it has worked on. The tool generates a report that compares what it finds to the norms in its database, highlighting areas where the instance has become more complex or cumbersome than it probably needs to be. The basic tool is free at launch, and Appirio offers a paid service to assess and map out a plan for eliminating the debt. Whether the customer does so will depend on the business impact of the debt when set against other priorities.

"We think about, is it worth paying down that technical debt now? How that plays out is very situationally dependent," Appirio's chief strategy officer Narinder Singh explained to me in a pre-briefing late last week. "By running our tool, you can count your technical debt. [We give you] a path that shows you where you're at, where you're going and lets you take corrective action where appropriate."

Narinder Singh tells Dennis Howlett about Cloud Metrics in the above video.