About once each decade, the technology paradigm shifts in fundamental ways and forces us to rethink how we support business processes. Many people have commented on the shifts from mainframes and mini-computers to client-server to Software as a Service (SaaS). The new wrinkle is cloud computing, and it is notable for two reasons.
First, cloud computing is bringing many new companies into the business application space, and many of these companies are not startups. Second, the old paradigm of differentiation to the point of incompatibility among products is being reversed. In the process, many vendors are working hard to support de facto standards so that all of their products work together. These attributes will help to ensure that the cloud computing era is nothing like those that preceded it.
New cloud computing vendors are emerging
While there are many new entrants into the cloud computing business, it is remarkable how many companies had another life before cloud computing. What's interesting here is that so many of these companies had, at best, a tenuous hold on the SaaS market to begin with.
Smart tech companies — like Facebook — have seen the writing on their walls and decided to join the revolution before it bypasses them. So we see Google, the search company, offering a suite of office automation applications using an advertising business model; Amazon offering storage and compute services from the cloud; and companies like Salesforce.com providing complete business application development and deployment from the cloud.
Tien Tzuo, CEO and co-founder of Zuora, an on-demand billing and payments service in the cloud, proudly declares that his company uses a variety of cloud-based application services to demonstrate his belief in the paradigm. He's running his cloud computing company in the cloud, and his information is always available no matter where he is.
Platforms and compatibility as a paradigm
The operative word for many of these companies is platform. Led by the uber-platform vendor Salesforce.com, a gaggle of forward-thinking vendors have decided that their futures are in platforms and that the platforms must interconnect. The rush to compatibility has pragmatic roots.
Most vendors understand that their products and services reach only a small portion of the market and that there is great untapped demand. These vendors also understand that the demand they seek to capture is, in many cases, for applications that they have no bandwidth to deliver in full. New applications that leverage important aspects of several classes of software require brainpower and investment from multiple disciplines. One of the most popular examples is the intersection of social applications like Facebook and conventional business applications such as CRM.
Social applications give us tremendous ability to harness the power of large communities organized around common needs. Those needs can be a business process, a vendor, a customer type and a great deal more. I have referred to this style of application as "WebNecessary" because the fact that these applications leverage the cloud — including other cloud applications — is what makes them work. Similar applications behind a firewall would not provide the same level of spontaneity and input that so many vendors need.
Interfacing a social application with a CRM database application ensures that customer data will not outdate as long as the individual has a reason to keep it updated. It also promotes a degree of bi-directional information exchange on topics that are important to all sides.
As I see it, the future of cloud computing is inextricably tied up with the future of social applications. The potential impact of social applications on our business and personal lives is huge. For that reason, application ubiquity is a requirement, and that makes cloud computing both a necessary component and the environment of choice.
Vendors want to be where their customers are, and customers are giving an unmistakable signal that they like social applications and they like accessing whatever they want, whenever they want it, on the Web. Smart vendors have already figured this out; hence the rush to the Internet by CRM.