Tuesday, April 29, 2008

The CIO's dilemma about SaaS and Cloud Computing.

Thanks to Todd Bisk's blog on Software as a Cloud vs Software as a Services I got the opportunity to listen to the Churchill Club podcast from ZDNet recording of a debate between Marc Benioff, CEO of Salesforce.com, and SAP Chairman Hasso Plattner. It was an interesting debate where Marc was positioning AppExchange as the next generation platform (for SaaS) where as Hasso positioned Business by Design more of a cloud computing platform - initially targeting small and medium business.

As CIO's starting hearing about these industry trends it creates a dilemma for them. Where should they use which solutions. Following is my take on the topic:

As per my earlier post Is SaaS Ready for Prime time? I would recommend that CIO's adopt SaaS solution for non-critical and/or non-differentiation business solutions such as Sales Force Automation, Financial Applications and HR applications. As all the SaaS platform are proprietary I would customize the business process for these solution and make sure not to move/develop and key customer differentiation solutions to these platforms. Not because of security concerns or any of the 'ities. Primarily to avoid lock-in to a particular vendor.

As for cloud computing - not sure I would adopt this as a large enterprise. As a small business, I would be tempted - but isn't it cheaper to rent entire servers on a month-to-month basis from hosting providers like Yahoo!, Verio or GoDaddy? I understand that some very large companies like Google, Yahoo! and eBay leverage such an architecture. I do not have anything against this approach and would love to leverage such a model. However, I would have to agree with Hasso - this is at least 5 years away. To me cloud computing means - I should be able to model my business solutions based on standards such as MDA, BPMN, UML, BPEL, XPDL and SCA using a single tool (don't care if the tool is proprietary, Eclipse or Netbeans). Once the business solution is modeled, I would like to analyze and deploy the business solution (potentially a composite application) to in-house data center (servers or appliances), SaaS provider and a cloud computing provider. In short - I buy into Hasso's business and technology model for Business by Design and their challenge is whether they would be able to pull it off.

Sounds confusing? Yes! it would be - especially if you assume that all this runs on a middle ware. As the technology and standards mature - I expect most (if not all) of the middle ware capabilities to embedded into the Operating System.

- Yogish Pai


Anonymous said...

As someone who knows SAP direction I think that they will be there sonner than their CEO saying outload.

Yogish Pai said...

Hi Natty,

I agree that SAP will have their middle ware solution (Business by Design) earlier but have to agree with Hasso on this one. It takes a couple of years for the product to first be adopted by customers and a couple more years for the product to mature. Unless that happens large enterprises will not migrate to the solution. Plus - a lot of the base capability needs to go into the OS and chips which will also take time.

Hope this helps clarify my position on why this would take a while.

- Yogish

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