What if Gartner is right?

What if Gartner is right?

Summary: Could it really be time to blow up your IT systems and eMbrace the Cloud? Maybe not next year, but in 2013?

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TOPICS: CXO, IT Priorities
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I've had Larry Dignan's 'deer in the headlights' post open all week. It troubles me. Not because I think Larry is wrong but what if Gartner is right?

I have been and remain critical of Gartner's position on cloud and cloud vendors. Put bluntly, a good proportion of what they're saying is derivative material you could have picked up pretty much anywhere the last couple of years. But, some of it is thought provoking and, as always, accompanied by grand predictions I guarantee will be wrong. The one thing you cannot fault them on is timing.

Everywhere I go, CXOs are wanting information about cloud technologies. Whether it's baby steps, a Salesforce.com implementation, a NetSuite RFP or a refactoring of data centers, there's barely a one that isn't interested. Which in part explains why I am addressing this right now.

In Dignan's analysis he underpins what he says with this from Gartner:

The strategies of IBM, HP, Oracle, SAP, Microsoft, Cisco—old standbys for enterprise tech buyers—should be viewed as “long-term risky,” said Sondergaard. Going forward, these vendors should be judged on how they embrace mobile, social and cloud. Apple and Google will be disruptive enterprise vendors. You’ll buy from all of them.

He opens the analysis with:

While Gartner is urging creative destruction, I can’t help but be skeptical. If everyone could re-imagine IT and blow up old systems to delight customers, there would be no losers in the corporate world. As we know, there are plenty of losers and there will be thousands of companies that flop at people-centric system design.

I can imagine similar thoughts coming from many colleagues. How many times have I crapped on the idea of Enterprise 2.0 aka social enterprise?

But in the real world, IBM can't find enough bodies. Accenture can't keep up, Deloitte and Capgemini are both very busy. And that's just in their SAP practices. SAP is about to confound the market with a great Q3. I'm betting Q4 will be a blowout. Oracle got Fusion out the door this month. Who says the incumbents are in trouble?

While in that piece Dignan is skeptical about what Gartner is saying, the sub text message from Gartner to CIOs is clear: we know you guys don't move so quickly but when you're ready to move to the cloud, we've got your backs. In the meantime, they still have plenty of fat to chew from their IBM, Oracle, SAP et al customer base.

In his wrap up piece on Gartner Symposium, Dignan returns to the underpinning theme only this time he's almost switching sides:

If Oracle and SAP become cloud juggernauts, perhaps these long-running maintenance driven enterprise relationships will survive. If not, there are dozens of cloud players ready to step in.

Today, cloud players are just speed dating with large enterprise buyers. Tomorrow, there may be more meaningful relationships.

Speed dating is not quite how I would put it given Salesforce.com is over the $2 billion revenue line.

What caught my attention though was the fact that Marc Benioff, CEO Salesforce.com and Zach Nelson, CEO NetSuite along with Narinder Singh, co-founder Appirio were all pitching. At a Gartner conference. That in a week when Bruce Richardson joined Salesforce.com and when NetSuite took the covers off its latest software.

The NetSuite announcements were relatively low key but worth noting. Andrew Nusca talked about the beefed up security. Elsewhere, I gave a rundown on the accounting additions. They may be dull to many but they signal clear intent - we're coming after larger enterprises. Why else would you big up automatic intercompany eliminations? I see Nelson is looking to talk up its position in financial services businesses. There goes another vertical market. There's a pattern here.

Back at Salesforce.com, I see the company announcing that it can now unlock SAP data

The program combines consulting and integration services that enable SAP customers to build apps that integrate seamlessly with their SAP data and processes using Force.com, our cloud platform for building social, mobile and real-time apps.

This is really going to annoy some people at SAP. It has HANA for real time analytics but not much else. It has Sybase Unwired Platform for mobile but there's grumblings over that and Streamwork for social which I personally dislike. SAP is already annoyed that Salesforce.com has done an end run on it with CRM. You can bet that Salesforce.com will come with modest cost alternatives to the gazillion dollar price tags that SAP prefers for its technologies. At Dreamforce, Benioff was unequivocal: the company is moving upstream as fast as it can.

You can argue that Salesforce.com doesn't have the expertise to carry off this integration and unlocking service and you might well be right. krcraft thinks Salesforce.com is blowing smoke. We'll see. It could merely be a trojan for the Force.com platform where guess what? You get to do all the work. You can argue that SAP can bolster its partners who have a good amount of account control and you'd be right there as well. What do those same partners say if they're a SAP only shop and the customer wants to assess alternatives? Hello Gartner? I shudder at the prospect but heh.

What you cannot argue against is that Salesforce.com is making a play that is directly attractive to those businesses that have IT departments wanting to build out apps but who are cash strapped.

From Dignan's second piece: Does anyone think:

Benioff finished his keynote and roamed the halls talking to CIOs for 8 hours. Gartner obviously noted since many of its themes could have doubled as a Benioff keynote.

...is a coincidence?

Next week we get another data point around how these things are moving: Workday Rising. I am attending and very much looking forward to getting a gut check from its customers. The conversations to date have been promising. This will be one of the first occasions when Workday will be in a position to talk about its financials customers. This is such an important area in the mix that if there are real signs of life then the big boys have one more thing to think about.  Dave Duffield is slated to bring customers on stage to talk of their experiences. Appirio will be there as will Tidemark, Accenture and Deloitte.

More coincidences?

When you add it all up could Gartner be right after all? Maybe not next year but in 2013?

Disclosure: Workday is a recent client.

Topics: CXO, IT Priorities

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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25 comments
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  • I don't see the difference between on-premise and cloud as significant

    Basically where you have the software installed is the least of the problems facing companies. <br><br>Customization is just as hard with cloud as on-premise - maybe harder as you don't have direct access to the database. <br><br>Integration problems remain the same. <br><br>The packaged software still doesn't fit your business - whether it's running in the cloud or on-premise.<br><br>It isn't the installation and running of packaged software that is hard, rather getting it to do what you want. There is no significant difference between cloud and on-premise on this count; none at all.

    So really the cloud companies having nothing particularly new or different to offer.
    jorwell
    • RE: What if Gartner is right?

      Don't even bother talking to me about Google
      Apps and the Cloud (or any body else purporting to provide replacement systems for our traditional IT systems) until Google shows it can fix LAPD security concerns. Google can even quit crying about losing the CA email system bid -- Google cannot prove they can permanently secure Government and Corporate data. And if Google can't from it's leadership position in the Clud, nobody else can either.
      c4791p@...
      • RE: What if Gartner is right?

        @c4791p@... I'm not sure I understand your comment "And if Google can't from its leadership position in the Cloud, nobody else can either. " Are you saying that Google is the only company that knows (or in this case doesn't know) how to implement Cloud's? and if they cannot do it, no one can? I hope that is not what you are saying because that statement is just ignorant. Try looking at a company with a long track record of success that governments, banks, airports and yes, police department around the world trust to provide secure solutions for their business. Try looking at Unisys. Unisys has a long history of success in these area, and yes, Unisys knows how to implement the cloud business model. And may I add, has done so for years, long before "cloud" was a buz-word.
        toomuchtime
    • RE: What if Gartner is right?

      @jorwell

      The question is just "Do we outsource our Servers?"

      In spite of several years of Hype, 'the cloud' is just using the internet for network connections. All the rest is just product sales.
      YetAnotherBob
      • Not just about that

        @YetAnotherBob

        If you just outsource your servers then you still have control over your software - you just get someone else to run the infrastructure.

        With products like SalesForce and so on you no longer have any control over your own software and access to your own data is limited to what can be achieved with the supplier's software.

        I've had enough managers complaining to me about how inflexible on-premise packaged software is for reporting. At least then you can walk round the restrictions of the application programs and get straight at the database. No chance with cloud stuff.

        Of course if SAP and Oracle had designed their applications in a modern way then going direct to the database would be fine for updating too. But sadly they did it the old-fashioned way by putting all the logic in application programs. Good for lock-in, but fundamentally bad design.

        If you stop and think about it, the whole idea of an application is a thoroughly outmoded concept in a modern computing environment.
        jorwell
  • RE: What if Gartner is right?

    http://skrt.pl/wb
    sdkgei
  • Not a chance

    Don't worry. Gartner is never right. They constantly flip-flop positions in a futile attempt to be "the source". Look back over the years and you'll see what I'm talking about.
    ddmattison
    • RE: What if Gartner is right?

      @ddmattison AMEN many a CIO's have been burned and unfortunately many a employee in hot water because they employee was right and the CIO listened to Gartner and not their staff.
      ItsTheBottomLine
    • You bet me to it.....

      @ddmattison

      Just do the opposite of what Gartner says, and you should do well.
      linux for me
  • dsgds

    http://skrt.pl/z2
    dyityibg
  • RE: What if Gartner is right?

    http://skrt.pl/wb
    sdkgei
  • The most likely outcome

    Some part of WorkDay, SalesForce or whatever gets installed in businesses in addition to Oracle Apps, SAP or whatever.

    So there is then a huge job of integrating these systems together.

    The plan is maybe that the cloud solution will replace the incumbent but what usually happens is that the initiative flounders and the company has to end up running both the "new" and the "legacy" system - plus all the custom stuff that had to be written that wasn't covered by the packaged solutions.

    So you have a whole troop of SAP consultants, a whole troop of Salesforce consultants and a whole troop of other consultants integrating the two (or more) together.

    However in these troubled economic times anything that causes greater complexity and increased employment can only be of benefit.
    jorwell
  • RE: What if Gartner is right?

    I was hired by a firm a couple of years ago who had a Gartner account and relied on information from their rep on trends in a tech niche I had expertise in. To say that I regarded Gartner's opinions as outdated and inaccurate is kind. Worse, Gartner and firms like them openly talk up companies and industries that pay them handsomely. I have zero respect for anything they and firms like them publish
    simon_nyc
  • If your data is in the Cloud, you have zero security for it.

    That is a fact. And it's about damn time someone called the Cloudie Vendors on it.

    If your data is in the cloud, it's impossible to count how many people have access to it. The vendor may tell you how many people have authorization to access it, but they rarely tell you how many people have DBA access to it. And they never know how many people have illicit access to it.

    U.S. law under the Patriot Act gives Uncle Sam the authority to seize anything that traverses the Internet; and do it basically without a warrant or subpeona, and do it in total secrecy.

    Furthermore, Uncle Sam has proven time, after time, after time, that once they have the data, it will soon be in public domain either from deliberate hackers obtaining it, pure incompetence on the part of the data handler's, or by the simple expedient of a FOIA request that sneaks its way through.

    Remember, if your data is in the Cloud, it's no longer secret or confidential.
    Dr_Zinj
    • The other problem

      @Dr_Zinj <br><br>You can only get at the data through the cloud vendor's application. <br><br>We know how SAP get in 50 fits if you do something as outrageous as a SQL query directly against their database, but imagine if you couldn't even do that? <br><br>Cloud stands for grinding inflexibility.
      jorwell
  • RE: What if Gartner is right?

    "Flop", "blow out", "your backs"? I have no idea what you mean!
    anonymous
  • Well...here is one VERY good reason NOT to use the cloud.

    From your own people:

    http://www.zdnet.com/blog/google/dark-clouds-in-la-as-google-apps-faces-citys-security-concerns/3411?tag=mantle_skin;content
    IT_Fella
  • Cloud will be small outside the US as long as the Patriot Act exists

    The rest of the world will not buy cloud services from US companies or subsidiaries as long as they must hand over data requested by a law enforcement official without warrant as is allowed by the Patriot Act.

    European Community and and Canadian privacy laws prohibit handover of personal data without notifying the person affected and the Patriot Act specifically prevents notifying such people.

    A European or Canadian company using a US company or subsidiary for cloud services is put in the impossible position of deciding which law to follow - and the easiest way to resolve the dilemma is to not use the US company or subsidiary.

    If American companies want more cloud business they should pressure their government to modify the Patriot Act.
    --
    Vancouver Computers Examiner
    http://www.examiner.com/x-34009-Vancouver-Computers-Examiner
    A Canadian Geek
    http://www.lockergnome.com/nexus/marcerickson
    Open Salon
    http://open.salon.com/blog/marc_erickson
    "...the whole idea of keep everyone afraid, and they'll consume." - Marilyn Manson
    Marc Erickson
  • C

    Posted twice by accident - sorry.
    Marc Erickson
    • RE: What if Gartner is right?

      @Marc Erickson That's OK Marc. An incisive comment like yours deserves to be posted twice.
      nikacat