It’s a fair question! How can you keep your cloud clean when you don’t know what your cloud is? (And you don’t know. If Larry Doesn’t Even Know, how can you?)
Category Archives: SaaS
What the Hell is Cloud Computing?
I think Larry Ellison of Oracle has one of the best answers out there:
Yet Again, the Cloud is Not a Fluffy Magic Box
This blog has told you that the cloud is not a fluffy magic box and given you a number of reasons, but yet, even though it is one of the seven deadly software sins, it would appear that many people are still holding on to this notion. Take this recent “panel from Ariba Live” (as covered in CRM Buyer) for example. Even though the experts admit that there are still issues to be addressed and problems to be solved, I get the feeling that many of them still believe that the cloud will solve all your woes. It won’t. And if you’re not careful, it might even create new ones!
First of all, do you even know what the cloud is? Is it the next form of SaaS? of IaaS? of PaaS? Is it truly computing-as-utility, or is it the next step in the evolution of computing on its journey to become a true utility service? Depending on which vendor you talk to, it might be any of the above, all of the above, or none of the above … and thanks to the proliferation of useless buzzwords, you might never know what your provider’s definition is (until the service goes down and they don’t fix it in a timely manner because it’s “not their problem”). Until there is a consistent definition of cloud, it can’t even be called a platform!
Secondly, it won’t necessarily lower costs or increase efficiencies. That is all dependent on your internal efficiencies, the provider’s efficiencies, and the platform your provider operates. With respect to software, one has to consider at least the following costs:
- License / Maintenancethe initial acquisition cost plus ongoing license / maintenance / utilization costs
- Supporting Softwareback end database, web/application software, and middleware
- Hardwareservers, SANs, routers, switches, etc.
- Powerraw energy costs
- IT Personnelsystem, server, and database administrators; network engineers; help desk / user support specialists; etc.
- Bandwidthinternet costs
which might not be reduced at all. Consider:
- License / Maintenancewill add up as the organization is paying monthly costs for infnity
- Supporting Softwaredoesn’t go away, it just gets rolled into the monthly cost
- Hardwarewon’t be any cheaper for the cloud provider than it is for any reasonably sized organization
- Powerraw energy costs could be higher if the cloud provider’s data center isn’t situated in a region with low power costs (from sustainable sources)
- IT Personnelare still required and still need to be paid a decent salary and the organization will only see savings if (a) the organization didn’t need full time resources which it would otherwise be paying for or (b) the cloud provider has resources that are more efficient
- Bandwidthcould go up as now all data is flowing back and forth over the internet, and not across internal networks
The cloud is only more efficient if the provider is able to take advantage of efficiencies of scale unavailable to the organization — and it’s only more cost effective if the cloud provider can pass the savings on and if the customer can pay only for what it needs (and not the shelf-ware that comes bundled with most current enterprise systems). This is never a guarantee as there are a lot of variables that have to be considered in the calculation of the lifetime total cost of ownership, which is the only true way to determine which system is the most cost effective.
Third, the contract, and the policies within, really determines the value. If the provider is not taking responsibility for delivering the whole solution, then there could be serious problems down the road. For example, if the provider is only delivering the software and using a third party for the infrastructure and the third party goes down, the provider might be down for days and leave you without recourse if the provider can claim “force majeure “.
Finally, the average executive doesn’t care how IT is delivered as long as it is cost effective. This says that the penetration of the “cloud” will be limited to those situations where it is truly the most cost effective solution and where IT is comfortable with a solution that stores corporate data off-site. Even in five years, despite the rosy predictions of some of the analyst firms, that’s not likely to be anywhere near 50% of the market.
So get your head out of the clouds (which bring asphyxia, hallucinations, brain-damage, and sometimes even death. It’s for the best.
Should the Force(.com) be With You?
These days, it seems that everyone wants a piece of the Force. I’m not sure why. Maybe they think that they’ll be able to jump 20 feet high, survive a thousand meter fall, and move spaceships with their minds. Who Knows? All I know is that vendor after vendor in the e-Procurement space are following the lead of vendors such as Coupa, SupplierSoft, and CVM Solutions and (re)building their application on Force.com.
And I’m not sure it’s the right thing to do. First of all, as I’ve told you many times, the cloud is not a fluffy magic box. It’s just another delivery model, with it’s own advantages and disadvantages (and the biggest disadvantage being that you have zero control over performance).
Secondly, the convenience of having all of your applications and data in one place is just as convenient from a hacker’s point of view as it is from yours — especially if his primary line of employment is corporate espionage. One weakness in the security layer and BAM! … all of your data belongs to him. Plus, he doesn’t even have to social engineer an account from your users to social engineer legitimate platform access … if there’s a weakness in the data access protocols, any account from any customer will do.
Thirdly, what happens when the whole thing goes down, as it recently did for the Virginia Department of Motor Vehicles when “a breakdown in the data storage system” (Boston.com) caused them to go offline for days? If the black swan sinks his teeth into the Force, and takes down a primary data center, do you really think there’s enough spare capacity in the system for them to failover without interruption and data loss? And even if they do, will performance be tolerable?
I’m not saying that your vendor shouldn’t do it, or that you shouldn’t do it either, but that you should think about it. Remember, there are two sides to the force — and if you forget about the dark side, you won’t be prepared when it rises up against you.
Maybe Coupa Should Build a Coupe
I recently gave Coupa a bit of a chastising in a recent series (Part I, Part II, and Part III) for failing to impress me with the rate of innovation ever since Dave Stephens left, as it looks like they’ve spent most of the last year developing flash (UI) and not substance (functionality).
But maybe that would be the right strategy for Coupa. Let’s look at the reality. There’s a large market out there consisting of companies (mostly mid-size, but some large and small) that have never used anything resembling a (modern) e-Sourcing or e-Procurement solution. At most of these companies, they don’t even know the difference between e-Sourcing and e-Procurement. All they know is Google and Amazon, which we all know are not the F-350’s of the B2B world.
At these companies, something that looks like an Amazon, searches like a Google, and connects like a Facebook goes over well. (After all, they’re not cricketers, and don’t know the perfect recipe for B2B canard a l’orange.) They don’t know that real e-Sourcing involves sophisticated analysis and negotiation techniques or that real e-Procurement is actually a nine-step process built around time-tested best practices to insure that the organization orders the right product at the right time in the right quantity off the right contract at the right price. They still think that ordering office suppliers and commodity electronics online is B2B e-Procurement. Forget about the fact that some of the old-time sourcing pros are claiming that strategic sourcing is dead, these companies haven’t even progressed far enough along the commerce curve to know what strategic sourcing is!
In other words, this market has no idea why it needs an F-350 work horse, and would thrilled to be getting a Chevy Cobalt. If Coupa adopts a keep-it-simple strategy, instances of their platform will sell like hot cakes, and Coupa will do great, as long as they don’t discover that there’s a major fault in the power steering five years down the road after almost one million (1M) seats have been sold.