Responsiveness of cloud-based software

Clouds
For a while I have been using a web-based service called Mammoth. Mammoth allows you to save text, images and other online content, as well as notes, into a single place for later use. In my case, I use it when researching issues I need to write about, or reference, for my job as a product marketer.

Mammoth allows you to create ‘boards’ which store the content about a particular subject. Boards can be shared so that people in different locations can edit the content collaboratively. A standard board in Mammoth is ‘Talk to Us’, which is shared with the Mammoth support team, and this allows me to address any issues I have with Mammoth online. Whenever I have logged an issue, I get a response via the board usually in a few hours.

In one case, Mammoth made a change to the user interface (UI) which made it look worse for me, so I logged a note on the Talk to Us board. There was a bit more discussion and clarification about the UI issue on the board, but what interested me was that 24 hour later when I logged on to Mammoth, the UI problem had been addressed. The application was fixed and changed without me having to do a thing.

It made me re-evaluate my view of cloud-based services.

  1. A problem with an on-premise application always requires the user to do something to fix it, usually download and install a software patch. With a cloud service, the problem is fixed once in the cloud, everyone gets it at the same time, and new software has to be installed.
  2. A problem with on-premise software is reported either by a phone call or an email, which then has to be discussed and confirmed before it can be transcribed and referred to the software development team. With a cloud service, you log an issue online in one place, the issue can be quickly confirmed and then be relayed speedily to developers.

Imagine if you could do that with enterprise software – ERP, CRM, warehouse management.

  • Customers could report problems so much quicker, and probably have a better support experience
  • No need for each customer to update the software with maintenance releases to fix bugs
  • Customer could log enhancement requests in a more effective way, and perhaps even get previews of enhancements before they go live
  • The development team work on supporting one codebase, in one location, for everyone
  • No need to ship CDs of software around the world

Wouldn’t that world be better? Oh wait, it’s called Software-as-a-Service and it’s here already.

The problem is that while the promise sounds simple and wonderful, the realities of transforming to that promise require major changes in thought, approach and practice – and moreover, for traditional software vendors, major investment expense.

The response to SAP’s Business ByDesign decision

softwareThe recent report that SAP was cutting back on development of Business By Design was widely reported. Here are some comments about it.

ZDNet

ByDesign is intended to serve “mid-market” companies …At launch, executives projected that the $4 billion software suite would generate $1 billion in annual revenue. Yet it is expected to generate no more than $35 million this year… Only a small team in India will take care of the maintenance of the software 

Forbes

SAP has been guilty of trying to own the entire ERP market by itself, rather than building a broad ecosystem which they are a part of – mid sized customers weren’t keen to be customers of SAP and by failing to embrace a more vibrant industry where small organizations could use third party products but would have a logical migration path as they grew or were acquired, SAP has done both its own business, and the market as a whole, a disservice.

PCWorld

Developed at reportedly great expense, the product was initially expected to have 10,000 customers by 2010 and be generating €1 billion (US$1.4 billion) in revenue for SAP. Instead, ByDesign has about 1,100 customers today

And from a SAP partner trying to do some repair work

SAP Business ByDesign, and its users, will in fact benefit from this leading technology [SAP HANA]… especially as SAP refactors parts of the SAP Business ByDesign platorm, so to take maximum advantage of SAP’s HANA breakthrough capabilities as well as dramatically improve speed and usability. As part of this, all of the know-how of SAP Business ByDesign is being preserved, and likewise is brought forward to benefit your business.

Of course, a cloud ERP vendor had to put the knife in. 

There was a major brouhaha when word leaked out that SAP was finally burying its ill-fated cloud-based ERP system, Business ByDesign. I assume it must have been a slow news week because no one could really have been surprised.

In my opinion, it is a sign of something happening in the cloud ERP space – maybe that the demand isn’t as great as the big vendors originally anticipated. Or it’s another failed attempt by SAP to penetrate the mid-market. What’s your view?

SYSPRO’s cloud strategy and journey

This is an interview that Dennis Howlett of Diginomica did with me about SYSPRO‘s approach and implementation of a cloud solution for its ERP software.

The accompanying article can found here.

Enterprise software is not a commodity

This post was prompted by a recent blog I read – Refuse to be a Cloud data hostage. The point of this article is that businesses should treat their cloud software like a commodity and be able to switch as they please. This stems from the argument by the Chief Technology Officer of Amazon, Werner Vogels, that:

“You should keep your providers on their toes every day. If we are not delivering the right quality of services, you should be able to walk away. You, the consumer of these services, should be in full control. That is core to our philosophy.”

When I read this, the word that stood out was “consumer”, not business. Consumers may have the privilege of being able to jump whenever they want, but my view is that businesses do not, and perhaps should not.

If you’ve ever worked in a manufacturing organisation, you will know that they invest in machinery only after a long evaluation process. Why? Because it is expensive, they may have to make changes to their processes in order to benefit from it, and they have to train staff to use. Then, if they want to keep getting benefit, they partner with the machinery manufacturer to maintain and improve it.

That is what should happen with enterprise software, whether it is in the cloud or not. Enterprise software is not a commodity, it is likely expensive machinery, and should be treated as such. If you think enterprise software is a commodity, then you are going to get very little benefit and far less than you had expected.

where is Dynamics in the cloud?

Jason Hiner at Tech Republic published the PowerPoint slide from TechEd 2010 that showed Microsoft’s strategy for private and public clouds. I think there is something missing from that picture – on the private side you can see Dynamics, but it is not on he public side. So my questions are: where is Microsoft Dynamics, and especially the ERP component, in Microsoft’s cloud strategy? What does this say about Microsoft’s plan for ERP Software-as-a-Service?

New platform for the new decade

I read with much interest Don Dodge’s predictions for 2010 and the new decade. I find predictions a bit of a waste of time – when you look are what people predicted for 2009, about half came true, which is what a random selection would give. However I was struck about the prediction on future computing and mobile computing.

“Your cell phone will become your primary computer, communicator, camera, and entertainment device, all in one … I think in the near future there will be docking stations everywhere with a screen and a keyboard. You simply pull out your phone, plug it into the docking station, and instantly all your applications and data are available to you … Your phone will have enough storage so you can decide which applications and data are stored on your phone, and which will be in the cloud.”

When I look at what I can already store on my cellphone, this prediction seems quite plausible. But if people store applications on their phone, which they will presumably choose themselves, and if they decide to use the cloud to select their preferred applications, how will this impact the role and responsibilities of the company IT function? Their role of deciding what applications are suitable for the organisation becomes irrelevant, but they still have to ensure application and data security and integrity.

 “Mobile phones are clearly the next computing platform … Mary Meeker of Morgan Stanley says Mobile Internet usage is bigger than most people think, and it is exploding.”

Application developers will have to re-consider the presentation layer for a different user interface and experience, and will have to assume that the mobile interface will be the preferred or default one, rather than as a side issue.

Where I do have a problem is the predictions about cloud computing and mobile bandwidth:

The explosion of reliable broadband bandwidth, virtualization technology, cheap storage, memory, and servers, has made Cloud Computing the obvious choice for the next decade … Why buy servers, hire IT admin to manage them, buy operating system licenses, application licenses, pay 20% maintenance fees every year, worry about security updates/breaches, hassle with asset management, etc., when you can just “pay as you go” with cloud computing resources?
The new 700Mhz wireless spectrum became available in 2009, and will be built out over the next decade … Cell phones will see the same explosion in bandwidth in the coming decade, which will enable new applications and uses.”

This is a simplified view of the world. Firstly, business applications for even small and medium businesses are getting more complex. I’m not talking about simple accounting or CRM solutions, but the complex applications to manage orders, receive and dispatch inventory, schedule and manage manufacturing operations. It isn’t as simple as paying and starting, as the “pay as you go” mantra likes to make out. It may well be that business hands over the management of the application infrastructure to a cloud provider, but every successful business has a particular way of working that is different to others, and that is unlikely to be assisted by a standard enterprise application.

Secondly, the comment about mobile bandwidth is US-centric. Developing countries like South Africa are constrained in all sorts of bandwidth (Internet, radio, cellphones) because they have been already allocated to developed countries years ago. That is not to say that cellphone bandwidith will not significantly increase. What Don fails to note is that the growth of the mobile Internet will probably come more from developing regions like Africa than the US, as reported by Opera and Google.

However you look at it, the next decade is probably going to redefine the way we use, consume and interact with computing resources.

Enterprise cloud computing – mea culpa

It looks like I was mistaken in my previous comments about enterprise cloud computing. I saw a blog by Irving Wladawsky-Berger from March this year in which he points out that BusinessWeek had an article about cloud computing, and that IBM had started a project in 2007. So it’s not such an innovator phase technology as I thought it was.

But I maintain that if I asked a sample of business people in the small- to medium-business space, most of them would not have heard of the technology; it’s still very much in the early adopter phase.