Dark Clouds and Silver Linings

Cloud computing is getting hot, as in hot promises, hot press releases, and some hot contentions about who’s platform is going to win the latest battleground in on-demand/SaaS. The answer my friend, is largely blowing in the wind. But not for long….

To be sure, there’s a never-ending set of promises and a growing set of expectations about how fast and how readily enterprise software – real enterprise software, not toys, relatively simple online shopping systems, and other consumer playgrounds – can be built to run in the cloud, and how fast some vendor’s cloud will start to show the critical mass that is needed to say that enterprise cloud computing has arrived. Problems are looming as the model confronts reality. But this market is clearly poised to take off: the question is more when than if.

Leading this clouded field is Salesforce.com, which wants to upset the world of software and services with its Force.com vision, based on an orthodox vision of cloud computing as a pure play, and predicated on the premise that being a disruptor of the common wisdom about application development and provisioning might be enough to keep its number one position alive.

Contending for the role of upsetting the upsetter is Microsoft, which is moving forward with a grander vision to make services ubiquitous wherever the customer wants them: in the cloud, on the desktop, in the server. Or on Yahoo, if they get their way in what looks like a classic takeover battle that I believe will resolve itself in Microsoft’s favor. Microsoft’s vision, along with the growing success of its CRM offering, which has a growing on-demand following, is clearly making Salesforce.com nervous. And defensive, which isn’t a position that I think Salesforce.com plays very well.

Meanwhile, there’s some interesting new contenders, in particular Workday, which has garnered headlines with a well-considered, albeit less-than-fully-baked, vision of offering on-demand integration through the acquisition of Cape Clear. The idea of ERP in the cloud, along with integration in the cloud, looks good on paper, but, at least for Workday, it’s going to take some time to really make this vision a reality.

What ties all these offerings together is the notion that customers don’t want to muck around with the management of complex software systems any more than the average driver wants to be a mechanic, or, for that matter, a civil engineer or urban planner. All great notions, which if realized, threaten to bring us back to the good old days of time-sharing, which depended on large, centralized blocks of computers doing the heavy lifting for users scattered far and wide. The line going around these days is that the world only needs five computers – again. As long as they are in the cloud.

Where do these visions come up short? Salesforce.com’s vision of disruption requires learning a new development language, Apex, which I’m assured is very easy and intuitive, just like all new development languages that, despite their ease of use and intuitive nature, fight an uphill battle for adoption by programmers who are just too enamored of the dev tools they know best to want to drop everything and learn something new.

And Salesforce.com’s vision requires a little patience: there’s just not a lot of critical mass in Salesforce.com’s infrastructure. As of last month, there was a total of 1.6 million lines of code written in Apex, which sounds rather miniscule by enterprise software standards, even if, as Salesforce.com contends, there’s a lot efficiency in the language. There are also a tiny amount of services available to be accessed, based on the company’s CRM core. It’s an infrastructure in waiting, more than anything else.

To be fair, that pretty much summarizes my other two examples. Microsoft’s status as a cloud player has been widely touted by the company, but there’s a huge amount of work -- much of it in marketing and messaging – to be done before its offering could be said to compete directly with what Salesforce.com is up to. That’s how it is with clouds, more wispy and ephemeral than real sometimes.

But Microsoft is Microsoft, with millions of developers, and a very robust set of services, both at the system level – a la Sharepoint, Biztalk, Exchange, etc. – as well as at the business process level – as in CRM, much of the Dynamics family of enterprise apps, and all that fun capability lying around in Office – that, are now positioned in the cloud. With all this capability programmable in the cloud or on premise using Visual Studio, it’s a pretty robust offering.

This hybrid model that Microsoft is supporting – the whatever, wherever approach to the cloud vs. on premise debate – makes a tremendous amount of sense in my mind. Partly because choice is what it’s all about, and partly because orthodox approaches to on-demand are largely predicated on a false perception of a rational decision-making process when it comes to deployment options.

That so-called rational process is a cornerstone of many a disruptor’s strategy, Salesforce.com among them. But being right sometimes isn’t enough, sometimes being the easiest option – not even the cheapest, just the easiest – gets a lot of institutional inertia moving in its favor. That’s Microsoft’s incumbent advantage at work, and Salesforce.com has to worry about what happens when cloud computing a la Microsoft becomes available at your fingertips.

Which brings us somewhat disjointedly to Workday. I like their moxie, mostly because they have a broader vision of what a vendor can offer in the cloud than Salesforce.com’s CRM-only strategy. I also like the idea that the Cape Clear acquisition can bring application integration to the cloud. This ability to leverage interconnectivity – and its cost – across multiple customers is a hugely important part of the on-demand story.

When done right – GT Nexus is my favorite example – many-to-many connectivity is ideal for hosting in the cloud. An integration hub in the cloud lends a cost-effectiveness and level of productivity to complex processes that depend on lots of connectivity – like GT Nexus’ global trade logistics management – that simply cannot be done on premise.

Workday’s Cape Clear vision clearly lies in this direction, even if it’s not actually available today. Right now, a customer running HR in a multi-tenant cloud using Workday has to have a dedicated instance of Cape Clear in the cloud to run its integration requirements – there’s no multi-tenancy in Cape Clear today. This leaves the leveragability of Cape Clear a future capability, and one they recognize as important, but not ready for prime time quite yet. Wait a year.

While there are many other cloud contenders in the market today, I think there aren’t really any that have surmounted these essential problems. Either the vision is there but the execution lacks (SAP and its Business ByDesign is the category winner here), or the choices are more difficult than they should be (Salesforce.com), or there are still massive holes (like this one from my fellow blogger Phil Wainewright) that need to be filled in (Everyone). But don’t be confused by this pessimistic-sounding ending. Cloud computing is the future of the industry, plain and simple. We just have to sort out what kind of future it’s going to be.