The maturing cloud computing model and rise of enterprise mobility are making their mark on the software industry, impacting the way independent software vendors (ISVs) and system integrators (SIs) do business and opening the doors for non-enterprise players to enter the space, note industry insiders.
According to Trent Mayberry, Accenture's technology geographic lead for Asean, as software moves away from the shrink-wrapped sales and app distribution models, toward the software-as-a-service model, there will be changes in the way ISVs and SIs operate.
With regard to ISVs, he said: "Governance is perhaps one area that will take new forms. Processes that have been traditionally rigid will change and give way to more adaptive models to encourage the viral adoption that cloud and mobility promises."
Mayberry also noted that enterprises are looking at significantly changing or eliminating existing business processes internally, as well as engaging with customers in new ways. As a result, SIs will have to adapt to customers' changing needs to stay relevant, he said.
Gartner's research director for software markets, Yanna Dharmastira, concurred. She pointed out that within the infrastructure arena, ISVs will have "broader roles and responsibilities" to play as they will need to provide existing software and services via the platform-as-a-service (PaaS) model, in a more reliable and secure way.
These vendors would then need to enhance their hosting capabilities and overall technical support services, Dharmastira said.
To better handle cloud-based requests, the analyst added that ISVs will also look to acquire smaller companies that already have SaaS offerings.
Asheesh Raina, principal research analyst for software at Gartner, noted that in the application layer, ISVs will also need to consider which server platforms they want to develop for. Their choice will determine the level of optimization and the type of drivers needed to run the apps, Raina said in an e-mail interview.
Cloud race heats up
Tan Jee Toon, country manager for IBM Singapore's software group, said the need to ensure the availability of services--spanning across the stack from infrastructure to applications--will underscore the maturing cloud computing model as a "true example" of service-oriented architecture (SOA), an application delivery framework which was heavily touted a few years back.
"Cloud is SOA at the systems level," Tan explained in an e-mail. "The fundamentals are the same [except] that it shifts the level of abstraction to a few levels lower down the stack. The services in the new environment are provided by cloud are now meant for infrastructure consumption [too], as compared to application consumption only in traditional models of SOA."
Several top IT vendors are already placing their bets on the advancement of cloud computing, including Microsoft. Michael Gambier, the software giant's Asia-Pacific general manager for server and tools, told ZDNet Asia in an e-mail that the market is "shifting increasingly toward IT-as-a-service", and this encompasses infrastructure-as-a-service (IaaS), PaaS and SaaS.
"We continue to invest in the cloud because we see it as an enormous area for growth.
"[As we build out our capabilities], we can offer customers the full range of our offerings, whether it is an on- or off-premise environment. We're also working with customers to help them understand what makes sense for them to move to the cloud," Gambier said.
He revealed that Redmond last March dedicated 70 percent of its engineers to work on cloud-based offerings. This year, that figure is expected to grow to around 90 percent.
Such efforts bode well in the eyes of Tim Sheedy, senior analyst and advisor of Forrester Research's CIO group.
In a phone interview, Sheedy identified Redmond as the frontrunner among top software vendors such as IBM, Oracle and Hewlett-Packard (HP) to embrace cloud computing. He pointed to Microsoft's Azure and Dynamics CRM Online offerings as examples of the company's push toward the cloud space.
"It knows that it is in trouble with Google challenging its desktop operating system and Office productivity suite, and that it has to reinvent in order to stay competitive," the Forrester analyst said. "I expect to see deep cloud connectivity in future Windows OS-based products."
Microsoft's cloud rivals are not sitting idle either.
Oracle's vice president of Fusion Middleware, Chin Ying Loong, said in his e-mail that enterprises, particularly top major companies, are evolving their current IT infrastructure to become more "cloud-like".
These businesses, Chin said added, are looking to improve internal services to various business units in order to "provide greater agility and responsiveness to business needs, higher quality of service in terms of latency and availability, lower costs and boost utilization".
Moving forward, he said middleware such as Oracle Fusion Middleware--a set of tools touted to help customers build flexible infrastructure for their organizations to be more agile--that can offer services securely and enable strong governance, will continue to be a key focus in 2011.
Mobility in demand
Other vendors are leveraging the cloud to deliver their services to the increasing number of devices used by the mobile workforce.
SAP, for instance, is hedging its bets on mobility and real-time analytics, which it said are technologies customers ask for today. Steve Watts, president of SAP Asia-Pacific and Japan, said the software vendor has been steering its direction toward these two arenas for the past nine months.
Enterprise mobility, in particular, is "one of the fastest growing areas" in the business space, Watts told ZDNet Asia, adding that SAP aims to have 1 billion mobile workers running on SAP software.
"Mobility will become a key enabler for our customers, from managing industrial process flows across borders to managing people locally, and it will change how organizations operate," he said.
SAP BusinessObjects Explorer for Apple's iPhone, for example, is a business intelligence (BI) tool that he said caters to mobile workers looking for quick, on-the-move access to business-critical information which was previously only available on stationary devices.
Paul Schroeter, strategic marketing manager of software at HP Asia-Pacific and Japan, agreed that the importance of mobility is "coming in by stealth" as workers want flexibility for IT resources.
To address this, Schroeter said HP will continue to play strongly in the application lifecycle management (ALM) space, particularly in ensuring the security of apps deployed within the enterprise.
He pointed to the acquisitions of Arcsight and Fortify, as well as the release of its ALM 2011 suite in December last year, as evidence of HP's focus on the development, deployment and maintenance of enterprise apps.
According to Forrester's Sheedy, the demand for increased enterprise mobility will open doors to non-enterprise vendors to muscle into the core industry. The analyst cited Apple and Google as prime contenders.
New software delivery models such as through native app stores and Web sites are proving to be a "disruptive force" in the enterprise space, he said, noting that mobile operating system (OS) players such as Apple with its iOS and Google with the Android--the two dominant forces in this market--have the opportunity to enter the space.
These players could also act as SIs to merge enterprise apps published on the iOS or Android platforms into companies' backend IT systems, Sheedy suggested.
With Android-based smartphones and Apple's iPhones and iPads increasingly becoming employees' most-used devices to access business data, this development might open new revenue streams for the mobile platform players, he added.
"Whether they will do so is another matter, but I do see that these two companies will take revenue away from established software vendors like IBM, Microsoft and Oracle," the analyst said. He added, though, that the incumbents will not lose major IT deals just yet, as the mobility trend is still in its infancy stages.
And it seems Google, for one, is looking to beef up its play for the enterprise space which the vendor already services via its Google Apps e-mail and productivity suite. Just last week, the Internet giant announced that it is removing the downtime clause from customers' service level agreements (SLAs) for its Google Apps service as part of efforts to differentiate itself from competitors and entice new firms to sign up for its cloud-based services.