I'm a weirdo, I live in The Cloud

I'm a weirdo, I live in The Cloud

Summary: A statistically unsound study shows that comparatively few PC  people have heard of, let alone use online applications As sure as night follows day and the blogs go bonkers. Attention is naturally directed towards a Google v Microsoft shoot out.

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A statistically unsound study shows that comparatively few PC  people have heard of, let alone use online applications As sure as night follows day and the blogs go bonkers. Attention is naturally directed towards a Google v Microsoft shoot out.

If you're one of the 500 million Microsoft users who switch on a Dell/HP/whatever every morning to get your work done then why would you have heard of online applications? Chances are you 'live' in Office and an enterprise system of some sort. Last I heard, NetSuite is looking to pull c$100 million in revenues. That's not even a line item on Oracle/SAPs accounts. It's petty cash to Microsoft.

Dan Farber suggests that:

This survey simply indicates that a tipping point toward the cloud hasn’t been reached yet. So-called Web phenomenon like Google search, Facebook or MySpace didn’t mystically reach warp speed in adoption. Moving robust applications to the cloud is a bit more complex than instant messaging or a social graph. At some point software-as-a-service applications, with offline support, will take the bulk of the pie, but it will require a few more turns of the crank.

It's a bit deeper than that. The consumer focused, web-based development bubble we're seeing is creating a reality distortion field of its own. Last week in Paris, some 2,000 tech innovators gathered for LeWeb3. The speaker list reads like the great and the good from the innovation side of the tech house. A good 80% were carrying MacBook Pros. There wasn't a PowerPoint to be seen. JP Rangaswami delivered his presentation on a RippleRap wiki! As Robert Scoble remarked to me: "We're the ones on the edge, the world outside is different."

My Irregular colleague Vinnie Mirchandani recently observed in one of our Google Group discussions that the pace of innovation among consumer facing applications is making the enterprise look positively glacial and that enterprise attention will move to the online world - in time. I'm not even sure this is the whole story. I think there are four factors in play:

  1. Enterprise attention on Web 2.0 (hate the expression but...) applications like blogs and wikis, the majority of which are offered as online solutions, is intensifying. The last few weeks I have seen a significant uptick in interest, especially in the context of developing new knowledge management solutions for governance, risk and compliance scenarios. Checking with colleagues, the same story is repeated across geographies and industries. A significant portion of those projects will need to embrace document management and that means working with Word - or some such. Earlier today, I fielded two such requests. This is almost unheard of, especially in the run up to the holiday season.
  2. Microsoft has a sleeping beast in its Windows Live Spaces product line. I recently met Kris Hoet, Microsoft's head of EMEA marketing for Online Services, which includes this product line. I outlined the potential value to Microsoft from using Live Spaces in the context of Dynamics, which in turn implies Excel. He didn't know about this potential connection but then as a manager in a  siloed organization, why would he? Yet if Microsoft could see the opportunity and pull the trigger, then it validates the rest of the market.
  3. Whether it takes six months, a year or more, this whole story is a distraction from the wider point about market size and scale. There is room for many players. The new players don't need to win market control to enjoy a handsome living and serve customers well. Whether that happens is moot. But I think on this occasion, history is not a good teacher. That's not to say I'm betting against Microsoft. But I'm not betting with them either.
  4. Enterprises behave like irrational creatures of habit. They don't always buy what's good for them but they keep on doing it anyway. How their users behave is another matter. If the current Gen Y/M is truly enamored of online applications and the freedoms that Facebook, Google Apps and the like offer, they will bring the change that tips online towards mass adoption. The precedent is Excel. Despite it being an awful tool outside light weight ad hoc analysis, it is the de facto financial analysis tool used inside the enterprise.  When users need to collaborate and can find the same or similar functionality from Zoho, Edit Grid and Google, how long will it be before they switch?

In the meantime, I'm one of those weirdos who lives in The Cloud. None of my clients do but it doesn't matter. We get stuff done. Some even enjoy collaborative document editing in Google Docs. Who would have ever thought that possible?

Topics: CXO, Apps, Microsoft, Google, Enterprise Software, Emerging Tech, Data Centers, Collaboration, Cloud, Banking, Software

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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19 comments
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  • Web 2.0 in the Enterprise

    I'd say there are two questions:

    (1) Are enterprises interested in the functionality provided by "Web 2.0" companies?
    (2) Are enterprises interested in trusting very small companies that tend to take an arrogant attitude with their information?

    Answers:
    1. YES
    2. NO

    Keep in mind that I'm thinking about large enterprises, not SMBs.

    I think the hosted application model is yet another half-witted attempted to avoid solving the problem of application distribution.

    Writing a commericial thick-client application is hard, because it has to install and run on millions of PCs. So people turned to web applications, which turned out to be almost as hard because they have to be made to install and run on thousands of servers. Sure, the decimal point moved, but the number is still too big.

    So now we have hosted apps, which are very scary, because data leaves the firewall and goes to a place with annual revenues smaller than a single department's budget.
    Erik Engbrecht
    • Interesting

      I like this question because it strikes at the heart of where this 'stuff' goes. These fears are - IMO - illusory. If you want to drive out cost then where else is there to go. OK, so we have telemetry, virtualization and a host of other things but the big bang per buck comes from moving process exception handling closer to the time it arises. Cloud computing gives us the opportunity to eradicate that problem. So - it then becomes a risk issue. What's the potential upside? According to AMR $3 trillion trapped in supply chains. I'll bank that against downside risk of data loss/compromise etc.

      BTW - I'm NOT saying this is a panacea or that it is necessarily easy. Look at how slow Duet has been in taking off.
      dahowlett9
      • Risk

        "These fears are - IMO - illusory."

        No they're not. Hardly a day goes by when there isn't a headline about a "Web 2.0" company doing something questionable with its customers' data. Right now it's mostly privacy stuff, because Web 2.0 thus far is mostly about consumer applications.

        "If you want to drive out cost then where else is there to go. OK, so we have telemetry, virtualization and a host of other things but the big bang per buck comes from moving process exception handling closer to the time it arises. Cloud computing gives us the opportunity to eradicate that problem."

        Why? What makes cloud computing inherently more efficient, and why can't that be scaled down to the IT requirements of a Fortune 500 or 1000 sized company?

        If no one knows how to scale it down, then my firm belief is no one understands it. If no one understands it, then scaling it up is building on a house of cards.
        Erik Engbrecht
        • C'mon

          Eric - that's nonsense and you know it and doesn't relate to business applications. Forget privacy, have you any idea how much gets lost routinely through app or DB failure or worse still idiots losing HDs/Cds etc.

          Did you notice what Intuit did to its Mac community the other day - trashed their HD and Desktops? Notice latest IE vulnerability?

          This is a specious argument that mixes apples, pears and bananas.

          Since I went into Cloud living, I've not lost a single byte of data. I rest my case.

          As for scaling down - what are you talking about? the big problem has been quite the reverse -- scaling up.
          dahowlett9
          • Scaling down

            "Forget privacy, have you any idea how much gets lost routinely through app or DB failure or worse still idiots losing HDs/Cds etc."

            <sigh />

            The existence of one hole doesn't justify creating another.

            "As for scaling down - what are you talking about? the big problem has been quite the reverse -- scaling up."

            I disagree. The preferred solution the IT industry has taken to just about all problems is to scale up. It takes this approach because adding more spaghetti to an unwieldy ball of spaghetti is more tractable in the short term than untangling it.

            So now, at a time when regular people are carrying once unimaginable computing power around in their pockets, providing relatively basic functionality requires a room full of servers kept running by a highly trained professional staff with backgrounds in a increasingly large multitude of disciplines.

            Am I the only person who sees something frightenly wrong here?
            Erik Engbrecht
          • Touche

            Dennis, you make a great point here. Also, think of all the times we hear that a gov't agency, bank, or merchant loses a laptop with credit card data...

            BTW, I added some thoughts on your post here: http://www.ikiw.org/2007/12/19/4-factors-affecting-the-pace-of-enterprise-20-adoption-in-organizations/

            Cheers,
            Stewart
            slmader
    • This is the problem with hosted apps.

      A locally installed business application transmits data only on the business's internal network (this would also include secure Intranets). Typing up a document with a hosted Web 2.0 application is just looking for security trouble. Even if a small business can't afford MS Office or WordPerfect business suites, there's still OpenOffice.org or StarOffice.
      gypkap9
  • Enjoying really slow editing?

    The one problem with all these castles in the cloud is that none of them deliver a quick, responsive application. Editing documents on Google is like working in molasses and that's only going to get worse the more people use it.
    tonymcs1
    • Nope

      We're not having that issue. Collaborative editing tends to be slower anyway because it is often interspersed with discussion via either a channel like Skype or VoIP so performance doesn't really impact.
      dahowlett9
  • You obviously failed your Statistics course

    A random sample of "nearly 600" is more than enough. Please consult an introductory Statistic textbook.
    biggipper
    • Ahem

      It is not a random sample - please check the original research note explanation.

      600 out of a universe of 500 mill makes it statistically irrelevant.

      Finally - parsing a US only sample and generalizing that to a global assertion is, quite frankly, amateurish.
      dahowlett9
      • 600 is plenty

        First, it was a random sample. NPD used a random sample from its panel of U.S.
        computer users.

        Second, it was a survey of US computer users. Clearly, there aren't 500 million
        computer users in the U.S.

        Third, contrary to your claims, an ending sample of 600 is plenty to determine the
        percentage of the U.S. computing population using SaaS apps like Google docs.

        On page 332 of "Marketing Research: An Applied Orientation, 3rd Edition" by
        Naresh Malhorta, he states that the "minimum" sample size for "problem solving
        research", "product tests" and "test marketing studies" is 200, "typical" sample
        range is 300-500.

        On page 159 of "Marketing Research: State-of-the-Art Perspectives" by Chuck
        Chakrapani, in an article entitled "Sampling Techniques," Peter Chan states that "?
        a size of 400 is often recommended when percentages are the data format
        required".

        I could go on and on. Really, pick up any standard market research book, and
        you'll see something similar.

        Thus, almost 600 completed surveys is more than enough to determine the
        percentage that have switched to SaaS.
        jgrossman07
  • Internet Bandwidth Not Ready For Online Apps

    It is just to slow. In my town the fastest consumer internet connection is only 10mb. This is just to slow to be using apps on the server.
    chessmen
    • Duh?

      Where I am bandwidth is a measly 3MB and I have no problems. That's because a good provider has a distributed server strategy.
      dahowlett9
      • Measly?

        That's a lot more than what a substantial number of people and small businesses (and small sites that are part of large businesses) have.
        Erik Engbrecht
  • RE: I'm a weirdo, I live in The Cloud

    Well, that's what I very often think too :)
    I use all those web-apps like Wrike http://www.wrike.com/, 2006 LeWeb3 winner, and these tools help me get my work done easier and faster. My clients even love it sometimes. They can update the information in a web application by just sending an e-mail to us. This is kind of fun to them even :)
    Robert Hughs
  • Seeing that YOU brought up HP!

    Hi Folks, Just got my combo B'day/Xmas present in, and lordy, lordy, lordy, BOY did I ever make a mistake, it SEEM that HP doesn't supply seperate software, heck let me be truthful they don't supply software what so EVER!! As well as NOT to even supply the CoAs (Certificate of Authenticity) for the O/S, or any of the Microsoft added value software titles either. They do supply (so they claim, wasn't one supplied with my HP, PC) a SoA (Sticker of Authenticity) Finally after WEEKS of fighting over the phone, and their chatrrom I have gotten a lovely manager (Linda L.) who is going to correct this by sending me the certificates of Authenticity. Trust me gang, WITHOUT these a company can do what is known as double dipping. Whereas it might NEVER be found out by Microsoft, it cheats you out of a real Operating System, and software. I remember back in the 1990s a company was brought up about this very thing with the DoJ (I will not give that company's name due to the legal ramifications.) and charged with Double Dipping. ZD Editors if your reading this I think we might have a VERY good story here, and also you might be able to get me my software (As seperate titles)That's another thing HP does, YOU do not get any software titles..yes, yes, yes I know WE pay for said titles when we purchase the PCs. BUT according to HP they include on the computer a seperate partition where as you can make a restore disk. (This is true, they do) Funny thing is, I have bought from Alienware, Gateway, Sony online, etc and THEY all had the O/S and software pre-installed on the PCs, BUT also included it on discs as well. Funny thing HP doesn't do this. Hmmmmmm funny they also don't include any CoAs either for what's on the PC they pre-installed. YOU make the call
    mikeholli
  • The world isn't black & white ( think Smart Client )

    My lifelong experience is that the 'right' answer is never the extreme on either end of the spectrum (full desktop app vs full online app). Answers always seem to fall somewhere in between in the 'grey' zone - in this case, something called "smart clients".

    There are 3 strikes against online apps to consider (at least today):

    Strike 1) Until fiber optics come to the curb, online apps will *never* respond like network/local apps. AJAX and other technologies help to fool your eye into thinking that the online app is smoother, but no online technology can fix internet lag times except a high-end connection to to your curb. Until this happens, editing online apps will always feel painfully slow, and won't be used by the masses.

    Strike 2) Local processing power is completely untapped with online apps. This goes completely against the concept of distributed apps/processing since a remote server is trying to handle millions of requests while millions of cpus sit idle. This seems to be a tremendous waste of resources, and inefficiencies tend to get weeded out over time. Also, since distributed cpu power will only increase, this looks to me like rolling a boulder uphill ? sooner or later gravity wins.

    Strike 3) Whether you love or hate Microsoft, their operating system is still sitting on about 90% of systems today. Add to that that it?s easy to develop Windows ?Desktop? apps, you have a huge market-incentive to continue doing so ? I?m not talking about what?s morally right, I?m talking businesses developing for the largest possible market for the least cost for the most profit. So there?s still a tremendous pull towards building ?Desktop? apps. (Note: when I say Desktop, I include mobile phone and PDA apps that utilize the local processor )

    All that said, the main benefit of ?online apps? is that the data is remote and sharable and accessible from any internet connection. What few people seem to bring up in conversation is that the DATA and the UI DOES NOT need to be glued together. In other words, it does not need to be either a fully online app, or a full desktop app.

    Come into play the ?smart client? ? a desktop/mobile/pda app that has its DATA IN THE CLOUD, but has its INTERFACE LOCALLY. There are huge benefits of a local UI such as response times, local cpu useage to operate the UI, low development costs, low barrier for market-entry.

    The dirty little secret for online apps is that you need to be connected or it won?t work. The dirty little secret for (full) desktop apps is that it?s very hard to actually & practically share data when everything sits on your hard drive.

    Smart clients take the best of both worlds ? they have the ability access remote/shared data, to keep a cache of the data locally when you?re not connected to the internet, and have the ability to synchronize the data changes when back online (so that all who share that remote data have access to those changes). They use the local cpu to do the crunching and only send/receive the data packets, which are small, lightweight, and fast ? it mostly bypasses the lag issue of online apps that try to crunch the data, build the updated html page, and then send the whole thing back to your browser, even if you only changed one tiny thing.

    So for now, pure online apps won?t gain acceptance from people that have to use their computers all day. Waiting that extra second or two for the browser to update a thousand times a day would get on peoples nerves. Smart Clients, on all platforms, is the better answer?at least for now.

    AN IMPORTANT NOTE:
    Smart Clients have NOTHING to do with Microsoft. They are just a concept. They can be developed for Linux or Macs in the same way ? someone just needs the right incentive to program for those platforms, whether it be moral or competitive against Microsoft. The important part is separating the UI and the DATA.
    Smarty_Pantz
  • You probably loved living behind a dumb terminal too...

    I'm never going back to the days where some bone head controlled my environment. I hated the days of the mainframe and I for one will never go into the cloud. When people realize that they are giving up their freedom; they will move away from the cloud.

    When I worked at Microsoft years ago their leading lament was; "Why can't we put it all on our servers and just charge for access by the minute..."

    All this "Oooh, isn't the cloud wonderful" crap is all about pushing the genie back into the bottle. These are the same people that would like to charge us all for the air we breath by the lungful. Like cable? Like pay per view? Well be my guest go to the cloud, or go into the light...whatever?
    mikifinaz1