The Cloud Revolution…

It’s much more than a new name for an old technology

I chuckle every time I listen to a debate centered on cloud computing and SaaS being just new terms for an older application delivery system. People will go on for hours discussing the topic, and dismiss the real issue: The revolution is here, whether you like it or not, and solution providers and vendors need to understand how to make it work for their sales models.

Many of you will remember the earlier versions of SaaS, either application service providers or earlier service bureaus. Neither of those services was adopted in mass, but the reasons may have had more to do with the timing, before the substantial advancements we’ve seen in web security and network (bandwidth). Dial up was not very conducive to web-applications, and many small customers could not afford a T-1 line for improved communication speeds to support the technology. Most of us now have more bandwidth in our smart phones than was available for a mid-size business then. We’ve come a long way, setting the stage for the final push into Cloud/SaaS application delivery.

Google and Microsoft aren’t the only vendors pushing channel providers into this new realm. It seems like every day there’s another large company embracing the cloud, or launching a major program to move its services to SaaS applications. Smaller vendors have been at the forefront of cloud, but the masses realize that market demand and technological innovation are the true drivers of the change.

I recently found an amusing article from 2008, in which Harry Debes, the CEO for Lawson (a large ERP application provider) predicted the “collapse” of SaaS within two years. His reasoning was based entirely on his own internal business issues, ignoring his customers and market demand. He stated that his company would be severely burdened by upfront costs and not hit break-even for four or five years. In addition, customers could leave just as fast as they signed on. What Debes failed to take into account is the speed and breadth of network and hosting innovation.  With the advent of Rackspace and other cloud hosting vendors, and the cost of network and development tools dropping, ANY company can offer a SaaS application these days!  

Granted, ERP is a unique application and their customer focus is more enterprise than SMB, where cost is a key factor to technology adoption. His myopic view of technology, and dismissal of the cloud, was shared by several large vendors, as indicated by their slow acknowledgement of the delivery model.    

Here is my prediction: Cloud computing and SaaS will continue to flourish due to the end user demand for flexible and low cost of entry solutions. Solution providers need to research the options available for their specific customers and markets, select based on the technology and channel programs, and complement the applications with complementary offerings, such as managed services and vertical-specific tech consultation.    

If a cloud application is available for software applications that your customers need, let them know the pros and cons of each. Remember, they will be looking to you for advice on the best solution for their business, not necessarily yours. If you plan ahead and partner with the best vendors on cloud services, you can ensure your company is best leveraged for the future. Realize that with cloud computing, more customers can now afford to utilize more applications. In addition to the multiple tools solution providers can provide, this also creates an opportunity to automate more of their processes (think managed services or remote application configuration).

As you’ve undoubtedly heard, even the CEOs of enterprise software have started to acknowledge the cloud, many of whom predicted its quick demise. Take note of an April news release, in which Lawson Internal Cloud Services was introduced as the platform for the company’s future applications. Even the most skeptical vendors realize the “Cloud Revolution” is not a short lived fad, but is a reality that meets a true business need for businesses of all sizes.