Posts Tagged ‘integration’

News Analysis: ERP Arrives To Signal The Era Of Best Of Breed Cloud Suites

FinancialForce Debuts Its Full ERP Suite

On February 19th, San Francisco headquartered, announced the launch of its full suite of ERP offerings built on the Salesforce1 platform.  Backed by investments from UNIT4 and, the cloud based vendor began as a single ledger financial management system built on the platform.  The announcement and product launch shows how FinancialForce:

  • Delivers a full ERP suite on the Salesforce1 platform. The platform brings together a series of organic products and recent acquisitions in HR, supply chain, and project management (see Figure 1).  The December 2010 acquisition of Appirio’s professional services automation assets form the Professional Services Automation offering.  The 2013 acquisitions of Vana Workforce and Less Software brought the human capital management (HCM) and supply chain management (SCM) capabilities.

    Point of View (POV):
    The management team at was smart to bring in acquisitions built on the original platform.  Post merger integration was greatly simplified as the products shared a common architectural base.  More importantly, the acquired solutions were easily upgraded to the Salesforce1 platform to create an end to end ERP cloud based ERP suite.  Customers gain the full advantages of the Salesforce 1 platform and integration with the core Salesforce CRM offerings.
  • Demonstrates focus on long term growth and viability . showed 80% year over year growth in revenue run-rate compared to 2012.  Headcount grew 62% year over year with over 260 global employees.  Furthermore, customers represent a global base with 27 countries and users in 45 countries.

    Cloud has gone mainstream and customers now expect their cloud companies to demonstrate viability.  The mergers and acquisitions required to build a full cloud ERP suite signal a maturity by and the market.  Early customers of the full suite provide positive references on both the synergies of the ERP offering and the flexibility of the Salesforce1 platform for extensibility.

Figure 1. Launches A Full Integrated ERP Suite


Research Summary: Next Generation CIOs Aspire To Focus More On Innovation And The Chief Digital Officer Role

Executive Summary

Constellation shares with its clients the fourth annual groundbreaking survey of CIOs later this week.  The 2014 survey interviews respondents about their priorities by CIO persona.  Constellation identified infrastructure, integration, intelligence, and innnovaiton as the four personas of the next gen CIO in 2011.

Survey results show that while CIO’s prefer to spend more time on innovation projects, most CIOs must spend their time battling the reduction of cost in IT delivery.  In the shift towards dominating digital disruption, CIOs can only move as fast as their organization’s DNA will allow while driving transformation. Using Constellation’s organizational DNA framework, CIOs can understand how much change they can expect their organization to consume and gauge their ability to impact the thought process and culture.  An excerpt of some of the findings can be found below:

A. CIOs Must Battle Keeping The Lights On Despite A Desire To Focus On Innovation

In Constellation’s recent CIO survey of 119 respondents, over 44% expressed that reducing the cost of IT delivery remained the number one priority (see Figure 2).  However when asked what should be the number one priority almost 44% expressed that bringing innovation to the business was the number one requirement (see Figure 3).

Figure 1. CIOs Still Prioritize Reducing IT Costs

Figure 2.  Bringing Innovation to the Business Is Top Of Mind On The CIO Agenda

B. CIOs Must Overcome Three Barriers To Bringing Innovation To The Business


Event Report: Informatica Analyst Day Reveals A Growth Strategy

Informatica Sets The Stage For A New Chapter In Its History

Informatica held its annual industry analyst day February 26th to 27th, 2013 at the Rosewood Sandhill in Menlo Park.  The event showcased Informatica’s go-forward strategy and road map for growth over the next three years. Key highlights include:

  • Capturing a $6.5B market opportunity in license and subscription revenues. Marge Breya, Informatica’s new CMO, set the stage with a vision of how Informatica is poised to capture a $6.5B addressable market.  Key use cases include analytics, operational integration, cloud integration, master data management, and data governance.  Achieving these results will require $3.6B in installed base plays, $1,9B in new logo plays, and $1B in geographic expansion. Key markets for geographic expansion include replacing hand coding in Brazil, China, Japan, Mexico, and Russia.

    Point of View (POV):
    Constellation estimates a $300B enterprise software market for 2013 with $130B in applications and $170B in infrastructure software.  Informatica intends to go after a $6.5B addressable market that includes analytics, cloud data integration, operational data integration, master data management, and messaging.  Success will require an expansion in focus from the traditional IT leaders and developer buyers to the emerging needs of business leaders.
  • Supporting a world of Hybrid IT.  Juan Carlos Soto, SVP & GM for Informatica Cloud, discussed how clients now see Hybrid IT as the new norm.  In fact, cloud based adoption has shifted from line of business (LOB) owned to IT led adoption of cloud over the past three years.  Soto sees three pillars of success that include delivery of a platform for hybrid IT, cloud services for all, and Informatica inside.  Key features for 2013 include data masking, process automation, integration with Microsoft Dynamics AX, integration with NetSuite, integration with Workday, integration with Oracle CRM On Demand, integration with Amazon RedShift, and integration with Ultimate Software (which was announced March 13th).

    In a world of Hybrid IT, Constellation expects integration to be a core requirement for success. Consumerization of IT has led to a proliferation of mobile and cloud endpoints that require sophisticated data integration capabilities among all possible connections, data flows, business processes, and access.  Informatica’s success depends on its ability to attract the cloud integration decision makers and users for basic cloud integration for enterprise and those seeking more complicated enterprise cloud integration use cases.  The platform for a Hybrid IT play via a Virtual Data Machine (VDM) has the most potential for success in creating new business models.  Informatica Inside will succeed so long Informatica is seen as “the Switzerland” for integration in cloud stacks and solutions.
  • Providing the integration and quality requirements for a big data world. Ash Kulkarni, SVP & GM for Data Integration and Data Quality, addressed the analytical integration, operational integration, and data governance strategy.  Informatica’s themes for next generation data integration include agility in development, flexibility for deployment, and confidence in management.  New features in analytical data integration include built-in data virtualization, complex event processing, support for decision making, and big data integration for Hadoop customers.  The data governance features include improved inference for data domain discovery, automated enterprise data discovery, business friendly glossaries with rich metadata lineage, streamlined workflow and task management, data masking, visual exception auditing, audit data retention policies for production and legacy apps archiving,

News Analysis: SnapLogic Snaps Up $20M In Series C Funding For Cloud Integration

Ignition Partners Injects $20M in Series C For Hot Cloud Integration Market

On September 19th,2012,  SnapLogic closed its Series C funding round.  The latest funding round:

  • Strengthens product offerings. SnapLogic offers an integration platform, integration server, integration design tool, and integration market place designed for the cloud world. With almost 100 Snaps in its appstore and almost 200 built to date, users can easily integrate best of breed cloud apps in thousands of combinations. The ecosystem includes free snaps such as Amazon EC2, Box, Clarizen, Facebook, Flickr, Four Square, Twitter, Yelp, and Zoho. Paid snaps include popular enterprise apps such as Coupa, Eloqua, Financial Force, MarkLogic, Microsoft Dynamics CRM, NetSuite, Oracle Peoplesoft, Parature, RightNow,, SAP, and Zuora.

    Customers and prospects can expect SnapLogic to invest the new funds in engineering.  Key areas of focus include improving the user experience, easing the cost of ownership, and delivering improved SDKs. Expect Snaplogic to also improve the creation of plugins by enterprise customers.  Many customers have also built their own Snaps.
  • Opens up doors to the Igntion Partners network. Led by Ignition Partners and joined by Triangle Peak Partners, the Series C round complements Andreesen Horowitz existing investments of $10M in Series B and the Series A round of $4.8M with Andreesen Horowitz and Floodgate.

    Point of View (POV):
    Investment by Igntion opens up opportunities within the portfolio. Key synergies include companies such as Cloudera, DocuSign, Fireaps, mFoundry, Service Mesh, Visible, and Zenprise.  SnapLogic already works within several Andreesen Horowitz investments including TideMark.
  • Improves distribution. Success in the enterprise has focused around key industries such as telecom, technology, entertainment, financial services and retail.  SnapLogic has won many large accounts and sees continued growth in North America.

    Constellation expects SnapLogic to focus in on expanding their North American sales force and distribution channels.  EMEA growth will probably come from the more mature cloud markets in the UK over the next 12 months.

The Bottom Line: Best of Breed Cloud Hell Requires Next Generation Simple Integration Solutions


Quark Summary: What CFOs Need to Know About SaaS and Cloud Integration

Forward And Commentary

This document addresses many questions asked by CFO’s about cloud deployments and the top integration questions often asked by CFO’s responsible for key business initiatives that involve technology.

A. Executive Summary

Organizations have escalated their adoption of cloud computing and SaaS applications in the past 3 years. As part of the broader trend in consumerization of IT (CoIT), business leaders have slowly tipped the balance of power in determining technology acquisition. However, the proliferation of adoption has led to organizational chaos in data, process and meta data integration as users adopt and deploy the cloud in silos without considering the implications of organizational silos and services oriented architecture (SOA).  As cloud integration emerges as an enterprise-wide issue, CFOs must get acquainted with the cost-value equation of cloud and SaaS applications. Why? Cloud integration emerges as a key competency for successful organizations seeking to innovate while maximizing returns on investment. Consequently, CFOs should understand ten key points on why they must master cloud integration.

B. Research Findings

The rapid adoption of cloud computing by business leaders unfortunately creates a bespoke environment technically known as “best of breed cloud hell.” With so many disparate systems in a loosely federated model, data rapidly becomes siloed, business processes easily become fragmented, and coordination across functional fiefdoms quickly becomes difficult.  Consequently, cloud integration emerges as a key enabler in reducing the costs and improving the benefits of cloud computing. Recent conversations with 22 CFOs addressed these ten key questions:

  1. What is cloud integration?
  2. Why is cloud integration a growing competency for the CFO?
  3. Is cloud integration more or less expensive?
  4. Which integration approach is best in the long run?
  5. How does cloud integration mitigate project risk?
  6. What’s the business value for cloud integration?
  7. Will bring your own device (BYOD) policies require cloud integration?
  8. How can I support social media?
  9. Do big data and cloud integration go hand in hand?
  10. What kind of projects make sense for cloud integration?


Executive Profiles: Disruptive Tech Leaders In Cloud Computing – Rick Nucci, Dell Boomi

Welcome to an on-going series of interviews with the people behind the technologies in Cloud Computing.  The interviews  provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Rick Nucci – Co-Founder & CTO, Dell Boomi


Rick is the founder and CTO of Dell Boomi, responsible for product management and engineering. He is considered an industry expert on SaaS & Cloud integration, multi-tenant architecture, and application programming interface (API) design and best practices. Boomi has a patent pending for its innovative Atom technology that powers Boomi AtomSphere, the company’s cloud integration platform. Rick constantly engages with customers and partners to align their business needs and Boomi’s product strategy.

Rick frequently speaks on these topics at industry and business events nationwide including Gartner Application Architecture, Integration and Development (AADI) Summit, Dreamforce, Cloud Expo and SIIA All About the Cloud..

The Interview

1. Tell me in 2 minutes or less why Cloud Computing is changing the world for your customers?

Rick Nucci (RN): Fundamentally, cloud changes the way a customer buys, builds, delivers, supports, maintains, and upgrades IT. Cloud is more than moving IT from the data center and scaling it into the cloud. Customers currently have an 80/20 paradox – 80% is maintaining the stuff you already have, 20% is getting to innovation. This paradox is a main driver for moving to the Cloud. Cloud provides the fundamentals (free trials, automatic upgrades, constant streams of innovation, reduced CapEx expenses) to flip flop the 80/20, so IT can deliver more innovation to their customers and focus less on maintenance.

2. What makes cloud computing disruptive?

(RN): Disruption is a choice word here. It really does pull the rug out from the norm as to how businesses do business today. Today, customers engage with IT vendors resulting in upfront capital expenditures followed by an army of consultants on site to make the thing work. From there, customers pay maintenance for the technology they bought. Unfortunately, most customers then customize. Once customized, customers become locked in and can’t upgrade to the next version despite paying for maintenance. Sadly, this is the norm and the biggest contributor to the 80/20 paradox.

Cloud puts the customer first. With cloud’s instant access and availability, customers are deploying systems faster and gaining immediate access and availability. Projects that used to take years now take months. Customers can even try out and validate vendor claims before buying. When customers ask how Dell Boomi’s products are different, they can see it with their own eyes. We gain their trust immediately.

Pricing transparency also improves. Customers pay for usage, not potential usage down the road. The bottom line, “Mr. Vendor if I don’t like what you are doing, I’ll leave,” means vendors must keep delivering value. It’s easier to for customers to move back from the cloud if they are not seeing the value vs. the on-premise tentacle into the enterprise. Cloud flips the customer/vendor relationship on its head and puts control back into the hands of the customer.

3. What is the next big thing in Cloud Computing?

(RN): The next big thing is standardization. Thought leaders, analysts, media, and standards bodies will culminate to drive core themes of architecture. Cloud vendors must have multi-tenancy or it won’t really work. When I upgrade, I’m upgrading my customer base, not one customer only. From your own SaaS Bill of Rights, there will be a standardization of the operational principles, how we maintenance windows; how we do SLA’s. This is the enterprise readiness of the public cloud providers. The environment is right to talk about public cloud standardization, the Bill of Rights, and getting customers comfortable with release cycles they aren’t controlling,

The good news – we’ve hit a tipping point where industries are converging around cloud. No one is saying Cloud is a fad. We’re over the hype cycle and getting into the productivity plateau. This is the pragmatic view over the next 3 years.

4. What are you doing that’s disruptive for Cloud Computing?


Executive Profiles: Disruptive Tech Leaders In Cloud Computing – Gaurav Dhillon, SnapLogic

Welcome to an on-going series of interviews with the people behind the technologies in Cloud Computing.  The interviews provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Gaurav Dhillon, CEO and Chairman, SnapLogic


An early investor in SnapLogic, Gaurav joined as CEO in 2009 when he saw the tremendous potential for the company’s cloud and on-premise integration products, strategy, and unique business model. Gaurav has spearheaded the rapid growth of the company and manages its financing, products, strategic relationships, and operations.

As the former CEO of Informatica Corporation, (Nasdaq; INFA) a silicon valley company that he co-founded in 1992, Gaurav feels that there is more to be accomplished in connecting companies’ applications and data sources. He should know; as he was Informatica’s first employee, and CEO for more than 12 years, where he led Informatica from a startup idea to a leading software enterprise with customers and operations around the world. His tenure at Informatica included the initial company launch, its successful IPO, and expansion to Europe and Asia. He was the leading figure in developing alliances with major technology players, ultimately forging a broad acceptance of the vision he pioneered in the software industry. Prior to Informatica Gaurav held management and engineering positions at Sterling Software and Unisys Corp.

The Interview

1. Tell me in 2 minutes or less why Cloud Computing is changing the world for your customers?

Gaurav Dhillon (GD): Three main changes impacting our customers today are the increasing number of business applications and application providers on the market, new application delivery platforms, and growing sources of complex data. Companies today use a much wider selection of best-of-breed, highly specialized applications than ten or fifteen years ago, many of which are cloud-based. These solutions are not hosted or accessed on-site over a Local Area Network during normal business hours, as was most common with legacy applications from the 20th century.

In addition, vast quantities of valuable business data now reside outside enterprise applications – in cloud-based solutions, externally purchased data, government-supplied information, and even social media streams and mobile sources. The majority of this data is non-relational, and often comes from Software-as-a-Service (SaaS) applications that don’t provide access to underlying databases. All of these cloud-driven factors make integration a much more difficult task than it was just ten years ago, and drive demand for a modern connection architecture like SnapLogic’s.

2. What makes cloud computing disruptive?

(GD): Cloud computing is allowing companies to exploit the power and ease of the consumer Web to connect the Business Internet. By leveraging Web standards and private or public clouds, any organizations can be as responsive, accessible, and adaptable as the best consumer Internet services. In the age of the QR (Quick Response) code, information from sources like mobile devices and social media, as well as all kinds of new specialized applications, is growing faster in the cloud. In order to benefit from this, companies require data they can trust, at the exact moment it’s needed. With this, they can shift their business focus from the rear-view mirror to an over-the-horizon radar that looks ahead to accurately anticipate future customer needs before anyone else.

Many companies are fundamentally transforming their IT strategies to make this all possible. Rather than relying on cumbersome stacks of enterprise applications to run their business, IT leaders are employing a new kind of loose coupling to create what Amazon’s Werner Vogals coined a “collection of services” – built, borrowed, or bought – that meets their exact technology needs. This disruptive approach results in a directory meta-application, which links (like a browser calling up a Web page) to every individual application, cloud service, or Web site employees need. As a result, the whole is made greater than the sum of its parts, and businesses can achieve unprecedented speed to innovation and speed to insight.

3. What is the next big thing in Cloud Computing?

(GD): Ray, this might not be the next big thing tomorrow, but in the not-too-distant future, I think a big opportunity for cloud computing will be to power the “Internet of Things” and all the fascinating possibilities that creates. Remember how quickly bar codes shifted from being used for basic inventory management to enabling never-before imagined analytics for manufacturers and retailers via data warehousing? That changed retailing forever, and a massive new market around analyzing bar codes was established, which is probably ten times the size of the original market for managing inventory.

We think we have Big Data today, but when we start putting sensors and RFID tags on the physical objects we use daily, and collect more and more data from our fitbits, appliances, cars, etc., we’ll have a humongous new after market for analyzing the streams of information that flow from those things. Only cloud computing will be able to handle this next phase of Big Data and help us benefit from it.

4. What are you doing that’s disruptive for Cloud Computing?


Product Review: Informatica Addresses The Impending Big Data Challenge With Release 9.1

Big Data Emerges As A Challenge In A World Of Unstructured Data Proliferation

Data volumes continue to explode with a proliferation of devices, social media tools, video usage, and emerging forms of both structured and unstructured data.  The rate of data explosion may be occurring faster than Moore’s Law.  Organizations now face a significant challenge in dealing with this data deluge.  Across the 5 pillars of consumer tech effecting enterprise software, organizations must deal with:

  • Managing unstructured user generated social interaction data. Massive smartphone adoption and social network usage will converge to create massive data volumes.  Twitter now has 106 million users generating over 3 billion requests per day.   Most analysts firms forecast at least 300 million smart phones in use among the 1.6 billion mobile devices sold in 2010.  Sensing data, call detail records, location based information, digital media, and other sources will lead the individual data explosion.
  • Coping with explosion in transactional data volumes. A collusion of compliance, regulatory, and digitalization leads to exponential increase in transactional data.  Audit and compliance requirements lead to increase in security log files, network and system event logs, emails, and searchable messaging communciations.  Add significant automation of business processes and  Constellation Research estimates that annual growth in online transactional data and repositories will grow 66%.  Most data centers now commit 25% of their infrastructure spend to support storage for data growth.

Informatica 9.1 Focuses On Big Data

Announced June 6th, 2011, Informatica 9.1 is generally available.  The new release focuses on four key themes that address the Big Data issue:

  • Delivering a near open data integration platform. The new release supports Hadoop, big transactional data, and big interaction data.  Hadoop support includes connectivity to the file system, HDFS and MapReduce for big data processing.  Big transactional data features support EMC Greenplum and other DW appliance vendors soon, in addition to existing Oracle, IBM DB2, IBM Netezza and Teradata connectivity.  Big interaction data connectivity support for the Big 3: Facebook, Twitter and LinkedIn.

    Point of View (POV):
    Hadoop provides low cost processing and storage platforms required to address the big data issue.  While Informatica 9.1 is designed for a mind boggling petabyte connectivity to OLAP and OLTP data stores today, power users will push for exabyte scale in 12 to 18 months.  The new release also delivers a complementary relational/data warehouse appliance package.  For social data, organizations will improve their ability to correlate social media signals with transactional data to deliver new insights across the organization.  Expect Hadoop and social media connectors to be delivered later in June 2011.

  • Incorporating master data management technologies with Big Data. The new release incorporates key assets from the Siperian Master Data Management (MDM) acquisition. Users gain new multi-style and multi-domain MDM approaches. Data governance is addressed via resusable data quality policies while proactive data quality builds on Informatica’s complex event processing technology to identify and alert users on data quality exceptions.

    Informatica’s MDM offering remains among the top in shortlists at Constellation Research. The solution delivers true multi-style, multi-domain, multi-deployment, and multi-use capabilities on one technology platform.  Users gain the ability to manage data quality rules in source applications that not only propagate downstream, but also take advantage of complex event processing (CEP) to provide proactive alerting (see Figure 1).  Informatica’s Rule Point CEP engine also provides key geo-aware processing capabilities for advanced scenarios.


Event Report: Dell’s Annual Analyst Conference Highlights Enterprise Software Future

Annual Analyst Conference Highlights The New Dell Strategy

Dell held their annual analyst conference at The W Austin from May 3rd to May 4th, 2011.  The event featured multiple sessions including:

  • Services and Solutions For The Vitual Era
  • Data Center and Information Management – Trends & Business Issues – moderated by Brad Anderson Senior Vice President of Enterprise Solutions
  • A Side of Dell You May Not Know – moderated by Karen Quintos, Senior Vice President and CMO
  • CEO Perspective
  • Extending Dell’s Enterprise Solutions & Services – moderated by Michael Dell (@michaeldell)
  • Solutions Services Strategy Update


Figure 1. Flickr Feeds From Dell Annual Analyst Conference 2011


(Tag your images with #softwareinsider or #rwang0 to include into the feed)

Big themes at the event focused around the consumerization of IT (CoIT).  Dell’s revamped strategy responds to big trends such as the adoption of social media, changing workplace norms, proliferation of devices, and consumption of IT by end users.  Key messages from a software point of view across the consumer, SMB, mid-sized, and large enterprise markets highlighted a:

  • Dedication to BRIC and emerging markets. BRIC markets sustained market share and grew revenue at 17% during the downturn.  In fact, Dell held a #1 market share in India and #3 in China and Brazil.

    Point of View (POV):
    Emerging markets play well into the Dell mid-market heritage.  More importantly, developed markets have mostly tapped out.  Double digit growth will come to technology firms who master the international markets.
  • Investment in cloud computing. Initial strategies address the IT buyer, developers and end users. Dell intends to attack the related services market with remote infrastructure management outsourcing(RIMO), cloud services, and transformation consulting.  On the apps side, SaaS, cloud re-platforming, and cloud migration play big roles in future strategy.

    While discussions around cloud focus mostly on the infrastructure layers, private conversations paint a picture of investment in Platform-as-a-Service (PaaS) and SaaS applications. Expect Dell to make more investments to bring solutions to market via the cloud.
  • Commitment to open solutions. Dell plans to ensure that all its acquired products and existing solutions maintain an open architecture.  Part of the strategy includes support for heterogeneous environments, virtual integration, and minimized technology lock-in.

    Dell claims that moving from proprietary to open systems, organizations can go from 300 servers per admin to 6000 severs per admin.  Storage savings shift from $2.20 per GB/month to $0.40 per GB/month. However, delivering open systems will require a lot of engineering investment among competitors not seeking to stay open.
  • Upsell into software. Strong channel and direct success in the hardware market opens up opportunities to sell systems management (Kace), cloud integration (Boomi), data management (Compellent and EqualLogic), and security software (Secureworks).

    Dell’s direct channels have proven that they can drop product into pipe and be successful.  For example, KACE grew revenues 400% since acquisition.   Long term, Dell must learn a software culture to be successful.  Not too many hardware vendors have made this transition.


Research Report: 2011 Cloud Computing Predictions For Vendors And Solution Providers

This blog was jointly posted by @Chirag_Mehta (Independent Blogger On Cloud Computing) and @rwang0 (Principal Analyst and CEO, Constellation Research, Inc.)

Part 1 was featured on Forbes: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

As Cloud Leaders Widen The Gap, Legacy Vendors Attempt A Fast Follow
Cloud computing leaders have innovated with rapid development cycles, true elasticity, pay as you go pricing models, try before buy marketing, and growing developer ecosystems.  Once dismissed as a minor blip and nuisance to the legacy incumbents, those vendors who scoffed cloud leaders now must quickly catch up across each of the four layers of cloud computing (i.e. consumption, creation, orchestration, and infrastructure) or face peril in both revenues and mindshare (see Figure 1).  2010 saw an about face from most vendors dipping their toe into the inevitable.    As vendors lay on the full marketing push behind cloud in 2011, customers can expect that:

Figure 1. The Four Layers Of Cloud Computing

General Trends

  • Leading cloud incumbents will diversify into adjacencies. The incumbents, mainly through acquisitions, will diversify into adjacencies as part of an effort to expand their cloud portfolio. This will result into blurry boundaries between the cloud, storage virtualization, data centers, and network virtualization.  Cloud vendors will seek tighter partnerships across the 4 layers of cloud computing as a benefit to customers.  One side benefit – partnerships serve as a pre-cursor to mergers and as a defensive position against legacy on-premises mega vendors playing catch up.
  • Cloud vendors will focus on the global cloud. The cloud vendors who initially started with the North America and followed the European market, will now likely to expand in Asia and Latin America.  Some regions such as Brazil, Poland, China, Japan, and India will spawn regional cloud providers. The result – accelerated cloud adoption in those countries, who resisted to use a non-local cloud provider.  Cloud will prove to be popular in countries where software piracy has proven to be an issue.
  • Legacy vendors without true Cloud architectures will continue to cloud wash with marketing FUD. Vendors who lack the key elements of cloud computing will continue to confuse the market with co-opted messages on private cloud, multi-instance, virtualization, and point to point integration until they have acquired or built the optimal cloud technologies.  Expect more old wine (and vinegar, not balsamic but the real sour kind, in some cases) in new bottles: The legacy vendors will re-define what cloud means based on what they can package based on their existing efforts without re-thinking the end-to-end architecture and product portfolio from grounds-up.
  • Tech vendors will make the shift to Information Brokers. SaaS and Cloud deployments provide companies with hidden value and software companies with new revenues streams.  Data will become more valuable than the software code. Three future profit pools willl include benchmarking, trending, and prediction.  The market impact – new service based sub-categories such as data-as-service and analysis-as-a-service will drive information brokering and future BPO models.

SaaS (Consumption Layer)

  • Everyone will take the SaaS offensive. Every hardware and system integrator seeking higher profit margins will join the Cloud party for the higher margins.  Software is the key to future revenue growth and a cloud offense ensures the highest degree of success and lowest risk factors.  Hardware vendors will continue to acquire key integration, storage, and management assets.  System integrators will begin by betting on a few platforms, eventually realizing they need to own their own stack or face a replay of the past stack wars.
  • On-premise enterprise ISVs will push for a private cloud. The on-premise enterprise ISVs are struggling to keep up with the on-premise license revenue and are not yet ready to move to SaaS because of margin cannibalization fears,lack of   scalable platforms, and a dirth of experience to run a SaaS business from a sales and operation perspectives. These on-premise enterprise software vendors will make a final push for an on-premise cloud that would mimic the behavior of a private cloud. Unfortunately, this will essentially be a packaging exercise to sell more on-premise software.  This flavor of cloud will promise the cloud benefits delivered to a customer’s door such as pre-configured settings, improved lifecycle, and black-box appliance. These are not cloud applications but will be sold and marketed as such.
  • Money and margin will come from verticalized cloud apps. Last mile solutions continue to be a key area of focus.  Those providers with business process expertise gain new channels to monetize vertical knowledge.  Expect an explosion of vertical apps by end of 2011.  More importantly, as the buying power shifts away from the IT towards the lines of businesses, highly verticalized solutions solving specific niche problems will have the greatest opportunities for market success.
  • Many legacy vendors might not make the transition to cloud and will be left behind. Few vendors, especially the legacy public ones, lack the financial where with all and investor stomachs to weather declining profit margins and lower average sales prices.  In addition, most vendors will not have the credibility to to shift and migrate existing users to newer platforms.  Legacy customers will most likely not migrate to new SaaS offerings due to lack of parity in functionality and inability to migrate existing customizations.
  • Social cloud emerges as a key component platform. The mature SaaS vendors that have optimized their “cloud before the cloud” platform, will likely add the social domain on top of their existing solutions to leverage the existing customer base and network effects.  Expect to see some shake-out in the social CRM category. A few existing SCRM vendors will deliver more and more solutions from the cloud and will further invest into their platforms to make it scalable, multi-tenant, and economically viable.  Vendors can expect to see some more VC investment, a possible IPO, and consolidation across all the sales channels.


Trends: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

This blog was jointly posted by Chirag Mehta (Independent Blogger On Cloud Computing) and R “Ray” Wang (Principal Analyst and CEO, Constellation Research, Inc.)

Cloud Adopters Embrace Cloud For Both Innovation and Legacy Optimization

Once thought to be the answer to deployment options for just the SMB market, early cloud adopters proved otherwise.  Stereotypes about industry, size of company, geographies, and roles no longer hold back adoption.  Cloud adoption at all 4 layers of the cloud passed the tipping points in 2010 as a key business and technology strategy (see Figure 1).  For 2011, we can expect users to:

Figure 1. The Four Layers Of Cloud Computing

General Trends Reflect Natural Maturation Of The Cloud Market

  • Replace most new procurement with cloud strategies.  Preference in deployment options and lack of availability of innovative solutions in on-premises options will result in a huge shift for 2011.  Add capex swap out for opex, and most CFO’s will be singing the praises of Cloud along with the business and IT leaders.
  • Start with private clouds as a stepping stone to public clouds.  Conservative CIO’s looking to dip their toes into cloud computing will invest into private cloud while evaluating the public cloud at the same time.
  • Get real about security. Customers will move from “the cloud is not secured” to “how can security be achieved in the cloud?”.  They will start asking real questions about security.  The result — cloud vendors must further showcase various industry-specific compliance approaches.
  • Move to private clouds as a back up to public clouds.  Forecasts in cloud security breaches will call for partly cloudy cloud adoption.  Despite the woes in on-premises security and the march to the cloud, cyber attacks will force companies to mov e from public clouds to private clouds in 2011.  Concern about cyber gangs hacking into commercial and military systems leads to a worldwide trend that temporarily reduces public cloud adoption.  Hybrid models for apps in the public cloud and data in the private cloud emerge as users migrate from on-premises models.  Data integration and security rise to key competencies for 2011.  The bottom line – improved data security reliability will drive overall cloud adoption in the latter half of 2011.  Organizations will keep private clouds for both security and back up.

SaaS (Consumption Layer) Emerges As The Primary Access To Innovation

  • Begin the transition from best of breed purpose built solutions to cloud mega stacks. Customers will still need stacks to be augmented by best of breed purpose built solutions.  As with the early days of ERP and CRM, expect su ite consolidation to occur for SaaS apps vendors.   However, the vendors with both the best PaaS platform and ecosystem will win.  Mature cloud customers will bet on several emerging platforms and apps as well as content driven cloud platforms complemented by strong integration solutions.  Access to deep industry vertical solutions will play a key role in this migration.  The need to quickly innovate will hasten SaaS adoption.
  • Superior user experience and scale won’t be mutually exclusive. The customers, especially the line of businesses (LOBs) will demand superior user experience as well as the scale in the SaaS applications and the tools that they will use. Ease of use will be on top of the list while evaluating a SaaS application and will help the SaaS vendors win a deal against on-premise incumbents whose products may have more features but poor user experience.


News Analysis: IBM Buys Sterling Commerce From AT&T

Merger Ties B2B Integration Tools With Selling And Fulfillment

On May 24th, IBM surprised the market with its $1.4B, all-cash, definitive agreement to buy Dublin, Ohio based Sterling Commerce from AT&T.  Sterling Commerce was purchased by SBC Communications in 2000 for its strengths in B2B integration.  As an AT&T company in 2005, they acquired Yantra for its supply chain fulfillment and distributed order management solutions (DOM).  In 2006, the company acquired Nistevo for transportation management systems (TMS) and in 2007 bought out Comergent, a leader in selling and order management solutions.  Sterling Commerce currently employs 2500 people and has 18,000 customers around the world.  According to Sterling Commerce’s CEO, Bob Irwin and IBM Websphere’s General Manager, Craig Hayman, the acquisition occurs for a few reasons:

  • Integration solutions for dynamic business networks. Sterling focuses on B2B integration and managed file transfer (MFT).  B2B integration solutions include offerings such as GenTran, Collaboration Network, Integrator, eInvoicing, Mobile Solutions, and B2B Managed Services.   MFT helps organizations move vast quantities of information quickly and securely across data networks.  Sterling delivers the services in both on-premise and on-demand.

    Point of View (POV):
    Sterling’s flagship product “the VAN”, brought external business and trading partners together.  They built a reputation connecting businesses with their trading community of suppliers, customers, banks and transportation providers.  IBM built a strong platform for inter-enterprise integration and SOA governance.  Should the acquisition succeed, customers will gain integration across business networks and improve decision making through richer integration.  Key Sterling Commerce integration customers include BNP Paribas,  Union Bank, Toshiba, Tenneco, Sony, Nordstrom, True Value and others.
  • Selling and fulfillment solutions that extend the value chain.  Sterling Commerce owns the leading order selling and fulfillment suite in the market.  Solutions allow organizations to deliver configure, price, and quote complex products and services (CPQ), cross channel order fulfillment, inventory logistics, and transportation management.  Sterling often competed with WebSphere commerce solutions for customers.

    Sterling originally made commerce application acquisitions with Comergent, Yantra, and Nistevo to extend the value of the integration network.  The result – an end to end order and fulfillment suite that solved the tough issue of delivering a “perfect order”.  Sterling Commerce’s order hubs often beat out traditional ERP solutions that tried to force fit end to end processes into their functional focused solutions.  Consequently, IBM WebSphere Commerce gains key components to improve its technologies.   More importantly, on-demand delivery will play a significant role going forward.  Key order hub customers include Best Buy, Walmart, Staples, Lowes,  Guthy Renker, LifeTouch, Cabellas, and others. More…