2010: The Year to Crystallize Cloud Strategy
Software companies must embark on clear-cut, long-term plans for the cloud era in order to play a role in business computing during the next decade.
By M.R. Rangaswami, SandHill.com
Jan. 05, 2010
Do you hear that sucking sound? It is getting louder.
SaaS Web services Mobile apps Open source Enterprise 2.0 Outsourced development All of the significant trends which have shaped the software industry over the past decade are being drawn up into the move to cloud computing.
As we look toward the software business in 2010, it is critical to take full stock of the current state of the cloud, the current vendor moves and what software companies must do this year in order to compete in the cloud computing era.
Customers in the Cloud
The technology industry has embraced the cloud in force - and the hype has become significant. Yet customers - particularly enterprise customers - aren't exactly jumping on the cloud bandwagon and migrating or developing their mission-critical applications and business operations to the cloud just yet. They continue to be concerned about the serious technology gaps in security and performance as well as about issues such as vendor lock-in, SLAs, integration, and privacy and control of sensitive data.
In 2010, an increasing number of customers will perform pilot and proof-of-concept projects to get a better idea of the business case for the cloud and to identify what applications and business processes make sense for the cloud. As for the economics, there is compelling track record and evidence of good TCO and ROI from SaaS applications.
But there are still many questions around the TCO of IaaS (Infrastructure as a Service), particularly when this service is used for permanent resource needs rather than merely for short-term demands. PaaS (Platform as a Service) is the least mature service in the cloud and it's still not clear how this will evolve given all the questions around proprietary platform APIs and components leading to tighter vendor lock-in.
In 2010, customers will be looking for ways to extend their datacenters to use public cloud services and to begin to morph their datacenters (beyond simply virtualization) to benefit from the many desirable characteristics of the cloud (aka the "private cloud") such as higher utilization through resource pooling, self service, on-demand scaling of resources, and so on.
I believe that 2010 (and beyond) will be characterized by a "hybrid" approach" with enterprise customers using multiple cloud sources to address their business needs and using the cloud as an extension of their own datacenters for specific use cases. We may see very few production applications in 2010 from Enterprise customers. However, the SMB customers are more likely to move into production than their enterprise counterparts.
Software vendors will need to make the cloud "enterprise-ready" this year in order to raise the level of customer comfort and trust. Software vendors need to position themselves to address the unique needs of this segmentation and the hybrid approach.
Opportunities in the Cloud
Indeed, the cloud has enveloped the progress of many of the major trends impacting the software industry.
Take SaaS, for example. SaaS is now simply one of the services that is part of the broader definition of the cloud, an umbrella definition which subsumes other relatively newer services such as Infrastructure as Service (IaaS) (including Storage as a Service), and Platform as a Service (PaaS). If anything, the introduction of IaaS and PaaS have accelerated the SaaS movement as they lower the barriers for companies to deliver software applications as a service with very little up-front investments and very low operating costs.
Additionally, the on-demand elasticity afforded by services such as Amazon EC2 allows these new companies to easily scale up (or down) their operations based on the demands of their customer base. Applications in the mobile arena and Enterprise 2.0 space can be easily moved to the cloud, or provide front-ends to more complex systems residing there.
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SaaS Web services Mobile apps Open source Enterprise 2.0 Outsourced development All of the significant trends which have shaped the software industry over the past decade are being drawn up into the move to cloud computing.
As we look toward the software business in 2010, it is critical to take full stock of the current state of the cloud, the current vendor moves and what software companies must do this year in order to compete in the cloud computing era.
Customers in the Cloud
The technology industry has embraced the cloud in force - and the hype has become significant. Yet customers - particularly enterprise customers - aren't exactly jumping on the cloud bandwagon and migrating or developing their mission-critical applications and business operations to the cloud just yet. They continue to be concerned about the serious technology gaps in security and performance as well as about issues such as vendor lock-in, SLAs, integration, and privacy and control of sensitive data.
In 2010, an increasing number of customers will perform pilot and proof-of-concept projects to get a better idea of the business case for the cloud and to identify what applications and business processes make sense for the cloud. As for the economics, there is compelling track record and evidence of good TCO and ROI from SaaS applications.
But there are still many questions around the TCO of IaaS (Infrastructure as a Service), particularly when this service is used for permanent resource needs rather than merely for short-term demands. PaaS (Platform as a Service) is the least mature service in the cloud and it's still not clear how this will evolve given all the questions around proprietary platform APIs and components leading to tighter vendor lock-in.
In 2010, customers will be looking for ways to extend their datacenters to use public cloud services and to begin to morph their datacenters (beyond simply virtualization) to benefit from the many desirable characteristics of the cloud (aka the "private cloud") such as higher utilization through resource pooling, self service, on-demand scaling of resources, and so on.
I believe that 2010 (and beyond) will be characterized by a "hybrid" approach" with enterprise customers using multiple cloud sources to address their business needs and using the cloud as an extension of their own datacenters for specific use cases. We may see very few production applications in 2010 from Enterprise customers. However, the SMB customers are more likely to move into production than their enterprise counterparts.
Software vendors will need to make the cloud "enterprise-ready" this year in order to raise the level of customer comfort and trust. Software vendors need to position themselves to address the unique needs of this segmentation and the hybrid approach.
Opportunities in the Cloud
Indeed, the cloud has enveloped the progress of many of the major trends impacting the software industry.
Take SaaS, for example. SaaS is now simply one of the services that is part of the broader definition of the cloud, an umbrella definition which subsumes other relatively newer services such as Infrastructure as Service (IaaS) (including Storage as a Service), and Platform as a Service (PaaS). If anything, the introduction of IaaS and PaaS have accelerated the SaaS movement as they lower the barriers for companies to deliver software applications as a service with very little up-front investments and very low operating costs.
Additionally, the on-demand elasticity afforded by services such as Amazon EC2 allows these new companies to easily scale up (or down) their operations based on the demands of their customer base. Applications in the mobile arena and Enterprise 2.0 space can be easily moved to the cloud, or provide front-ends to more complex systems residing there.
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