Reflections on Dreamforce 2011: Now the Cloud Can Ride the Waves

This year, Salesforce.com’s Dreamforce event–with a record-setting 45,000 attendees–got me thinking about the early days before the cloud was the cloud, how far its come, and how perfectly poised it is to ride the waves now driving technology adoption–mobile and social solutions.

Traveling in the Way Back Machine

In a galaxy long ago and far away, I was an analyst at the former Summit Strategies when the first cloud seeds were being planted in 1997. NetLedger (now NetSuite) and Employease (now part of ADP) were among the first to visit and brief us in Boston, followed soon after, of course, by Marc Benioff and Salesforce.com.

These vendors were among the early pioneers of what was first called the internet business service provider (IBSP) model. They built their solutions as multi-tenant software-as-a-service solutions, designing them  business from the ground up to be delivered as a single instance, to thousands of customers, in a subscription-based pricing model.

In the early going, these pioneers survived the confusion wreaked by the traditional software vendors, who put their traditional packaged apps–never designed for a services model–up on servers in the application service provider (ASP) hosting model. Then, they persevered through the onslaught of the software establishment at the time–from Siebel to Microsoft to SAP–who insisted SaaS was just a passing fad. They forged on even as multitudes of IBSP wannabes–from Agillion to Red Gorilla to vJungle–crashed and burned when the Internet bubble burst. They even survived the problems they created for themselves as they kept renaming themselves, from IBSP, online services vendor, software-as-a-service (SaaS) and then to the “cloud” label that would finally stick.

Evolutionary Vs. Revolutionary

From the start, analysts such as myself and counterparts, such as the luminary Phil Wainwright, thought that IBSP/SaaS/cloud was a great alternative to the packaged software model–and that it would catch on much more quickly than it has. But, though cloud computing has grown over the last 13 years or so, it’s growth has been more evolutionary than revolutionary. In the beginning, many of the technologies necessary to enable widespread cloud adoption, such as ubiquitous high-speed Internet access, just weren’t there. As important, IT people were often reluctant to go to the model because they were afraid it might put them out of a job, and decision-makers in some companies didn’t feel a compelling need to change the status quo.

In contrast, adoption of mobile and social technologies has been truly revolutionary. Not only were the right technologies were in the right place, at the right time, but individuals–not IT people or business decision-makers–called the shots. Employees are also consumers, and are spending their own money to BYOD (bring your own device) instead of using a company-issued brick. They started questioning why it was easier to keep track of friends on Facebook than keep track of contacts in CRM.  Armed with iPhones, iPads, Facebook and Twitter, as Benioff so rightly pointed out, individuals are now empowered not only bring about the “Arab spring” that has toppled dictators, but also stir up a “corporate spring” for companies that don’t listen to customers and employees.

Now the Cloud Can Ride the Waves

As a result, the pecking order of the IT universe is being radically altered. Apple is worth more than HP, Google is more powerful than Microsoft, and Facebook has changed the world–and what we expect from software–forever.

Though cloud computing has been on a slower trajectory than social and mobile technologies, cloud is increasingly the critical enabler for both mobile and social solutions. It provides the economies of scale and skill that developers and companies need to create, reiterate, and reinvent. It provides the customer feedback loop and data aggregation necessary to see where the puck is going and get there first. It provides the collaborative environment required to accelerate new ideas and new ways of solving problems. But it is very complicated for individual companies to piece together all the components that they need on their own.

As this perfect storm of social and mobile rapidly forms, how much time do the software vendors such as Microsoft, Oracle, Sage and SAP, have to straddle the fence and ride out the storm? You can bet that I and a lot of other storm chasers will be watching closely as the waves build.

One Response

  1. Awesome piece Laurie. This is exactly why we think Professional Services Automation is the killer app in the “perfect storm.” Project work is social in nature, done by virtual teams using more intelligent mobile devices that are connected to the cloud.

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