What a week!

Google drops a Wavy potato.

SAP releases ByDesign 2.5

HP sees an abrupt CEO change.

Netsuite is one of the few SaaS/Cloud money makers.

Boy, did I choose a wrong week to go on vacation.

∞ elasticity a blessing or a curse?

One of the biggest allures of the cloud is it’s seemingly unlimited capability of expansion.

Have a big trade event coming up, crank up the nodes. Expecting a big splash with your successful twitter campaign just add n servers on demand. Now that’s got to be a blessing, it cannot possibly be a curse. So what’s up with the title of this post?

Animoto was able to scale from 50 to 5k nodes in 5 days. And then it trailed off to 1k nodes (before gradually growing back up).  Using cloud (amazon/right scale) infrastructure, they were able to enjoy the fruits rather than becoming the victim of their own success. Without this elasticity, Animoto would probably have note been, well Animoto (as we know them). As consumers of this awesome technology, this never before seen flexibility, gives us the ability to be aggressive and scale with the payoff.

This is from a consumption point of view. Now lets flip the coin around and see how this fares on the providers side. As a provider, you go from a demand of 50 to 5k nodes in 5 days. Thank god for that buffer capacity coupled with the ending of the other mega clients promotions. You just had to actually provision 1k nodes. Now few days later, the demand has dipped down to 1k nodes. What do you do with the excess capacity? Do you always have to have an ever expanding consumption base to soak it up, so that all that’s left is your target buffer?

I am going to diverge a little bit into supply chain territory to illustrate my point. At the onset of VMI/SMI which is essentially inventory management by the suppliers (if you see a coke delivery guy stocking the soda aisles of your favorite grocery chain, they most probably have a SMI setup), customers aggressively pushed down the inventory costs lower in the chain. It did help them a little initially, but when their strategic and dependable suppliers started to suffer and had an impact on quality, the challenges of this paradigm shift began to sink in. Essentially, in order to be successful, the entire chain had to be a success.

Now how does this supply chain example relate to this post? Well, if you are investing heavily in a cloud provider, and I am talking about enterprise clouds (not base technology clouds like azure and aws), and are using the cloud, the app platform and the apps for your business critical needs, then you are fully invested into that cloud provider. its in your best interest that the cloud provider does not ever flirt with insolvency and it’s operational margins ride the elastic waves and don’t sink in them.

Its really important to analyze stuff like how smartly does the cloud provider scale, how stable are its finances, does the cloud provider adhere to any cloud standards (which are fairly nascent at this point), which would help you move over to another provider in case things don’t workout.

Elasticity is most certainly a blessing.
Nothing in this world is infinite.
Everything comes with a price.

If you agree with me and treat your cloud provider as a partner, crucial to the success of your business, then before you select this partner, make sure to ask the right questions.

Here are some:
Q. How well funded is the cloud provider?
Q. Since majority of the cloud providers are barely making money, what is the plan and time line for profitability?
Q. How smartly does the cloud provider manage and scale?
Q. How do I move my solutions out of the cloud, in case the provider folds?

Did the lack of sunny (economic) skies, made us like the clouds more?

One of the biggest reservations, especially in the large and very large enterprises segments, used to be (and still is, especially for mission critical processes) concerns for data security. For the mid and smaller sized entities, this concern was over ridden by their need to be focus on their core competency and be cost effective. For them the bang for the buck was achieved by investing the dollar into the business as against the challenging and complex IT functions. I am not quite sure if this was the norm or the exception for this industry segment. Hence as a result, Salesforce, Workday and others gained a lot of traction in the mid and small enterprise market segments. I am talking about the pre-2008 recession.

As the global economies tanked in 2008 and visibility into one’s own business retracted from fiscal quarters to days, a lot of IT projects started to get the axe. The business, who ever more so, wanted their solutions, had no way of funding them. This was certainly true for the small and midsized corporations, they could not afford to wage wars on different fronts. But even the biggies were not spared, and in some some cases, depending on the type of business they were in, were more impacted than their smaller counterparts.

In this period of turmoil, when the traditional enterprise software providers suffered, and sometimes heads rolled, interestingly the clouds were enjoying their day in the sun! The cloud (SaaS/ondemand/multitennant) vendors were selling faster than they could count. Not only was the small and midsized market completely mesmerized by the cloud players but the large enterprises also started to look at the cloud more seriously and even started to move a lot edge functions over to the cloud providers. So much so that the large players have aggressively started crossing over into the cloud territory making the cloud players just a tiny bit nervous.

Would we have such a level of commercialization of the air travel and advancement of airplane technology, had it not been for the world wars?

Would all of us sill be with coco if NBC had not goofed it up so bad?

leading up to:
Would we have the rapid levels of cloud acceptance and adoption had it not been for the recession?

Profound questions.

Now that the economic bottoms have bee reached (hopefully, I am still a little bit nervous about Greece and like) have we emerged with a sense of confidence in the cloud? Are we, by we I mean small/mid and large sized corporations more willing to place more confidence in having our data outside our firewalls?

I think so.

Would private coulds bring about a more defined seperation between Hardware and Software in Corporate IT?

With the hype and the actual realization, that usually follows the hype (of sound concepts anyways), of private clouds starting to materialize inside the firewalls of many corporations, are we moving towards a clear separation of the Hardware and Software functions within Corporate IT? Maybe.

Do the CTO and CIO functions (even if they are under the same person) change? Maybe.

Further more, does how much does the commoditization of the hardware (case and point google’s public cloud and google’s private infrastructure) reduce the need for specialization on the hardware side? Does the move by major Software providers (like SAP) to focus on virtual appliances for the cloud accelerate this shift?

A lot of interesting questions do come up when you delve deeper into the cloud. And in my humble opinion, the outcome cannot be foretold at this point, we have to wait and see.

Do we need Enterprise Software? – Part I

This is part one of a five part series. It seemed appropriate to start this blog with the need and the genesis of Enterprise Software.

In Part I (this post) we will examine the history of Enterprise back office and the birth of Enterprise Software. Part II will deal with core functionality like accounting, finance, sales, human resources, payroll, productivity and communication (also a little bit of operating systems and databases). Part III will discuss Enterprise needs sliced off by size (large, medium and small sized enterprises). Part IV will shed some light on technology (from main frames to the cloud) and the future and finally Part V will conclude the series with pro/con styled arguments directed towards the blog title, with the cons as challenges and opportunities for improvement.

I have no intention of turning this post into a history lesson (full of data points and detailed time-lines), there are plenty of infobanks on the net that do just that, instead I will keep the discussion abstract with broader strokes and keep the focus on the need for Enterprise software. If you are interested in the data points, a summarized view can be found at this link. I will also refrain from throwing hardware and non enterprise software into the mix.

In the 60s the notion of packaged software started to emerge, where the space that was generally either make to order or pre-bundled freebie with the hardware. In the 70s this packaging concept moved into new territories of Enterprise software. At one end were the likes of IBM and DEC and at the other were the new kids on the block SAP, Microsoft, Oracle etc who would provide software that would run on many different target hard-wares. But what was it that was driving it? What was the pull?

Through out the history of Business, the various business functions (accounting, logistics etc) were strictly manual in nature. The General Ledger actually had a physical existence (it still does in many of the business of the third world countries). What made these core functions to speak in bits and bytes? And that too so rapidly. Throwing away thousands of years of tradition of the paper in a time line comprising of less than 5 decades?

I guess this is at the heart of the question, Do we need enterprise software? And I will try to answer that as we progress thru this series.