The Integrated Clouds

Cloud Computing continues to grow at an unprecedented pace; MSFT's Azure is live and gaining momentum, SAP is taking it seriously, vmforce is coming this fall, AWS has a region in Singapore and even some of the larger banks in the world have the cloud on their radar.

Ubiquitous and affordable broadband along with the evolution of social networks, real time and mobile technologies emphasize the importance and value of the Cloud. While the skeptics continue to focus on the missing pieces, it is very hard to ignore the ways in which the Cloud is shaping the way we live.

Yet, in spite of this progress, somehow today's Clouds remind me of the pre ERP days when companies would have separate systems for different functions: accounting, customer service, manufacturing, etc. While Clouds tend to be more open and easier to integrate than pre ERP enterprise applications, the reality is that Cloud integration is still in its infancy. Yes there are many interesting mashups coming along but most of them just collate information from different sources in the browser and rarely engage in significant business processes.

To reach its full potential the Cloud will need to become more open and more integrated, loosely coupled, integrated on demand and with a specific purpose. It is nice for business users to be able to combine data from different web services in a Google document but the integrations that I have in mind would happen at the application level, where salesfoce.com exchanges information with Parature which then kicks off a process in Netsuite which then triggers a payroll in Intuit which then updates a dashboard in Tableau and publishes the results to Twitter. All automated and coordinated to solve a particular problem. Once that process is automated, the next step would be to make that process smarter, that would be the era of the intelligent Cloud and a great topic for a future post.

Cloud Computing Lessons Learned

The beginning of a new year has brought along a large number of predictions regarding the impact adoption of disruptive technologies like Cloud Computing. The art of the possible is certainly exciting, it drives innovation and shapes the future.

While I believe that innovation can't be stopped, I recognize that expectations and change management are largely responsible for the ultimate adoption of a promising technologies. As such, I thought it would be appropriate to share a few lessons learned around some of the challenges and opportunities surrounding Cloud Computing.

Challenge: Privacy and Security

Lesson Learned: Mainstream technology and reasonable precautions are enough to satisfy the requirements of a majority of organizations.

Observations: Privacy and Security remain an unsolved and a delicate issue and its severity and complexity vary by industry. Nevertheless, the leading cloud providers (e.g. salesforce.com, AMZN, GOOG) have in place controls, technology and procedures to properly secure data and applications.

Challenge: Vendor Lock-In

Lesson Learned: The Cloud continues to be more open than legacy technology and vendors like GOOG have initiatives in place to keep it that way.

Observations: Migrating from one cloud provider to another with ease is a key criteria in many practitioners' checklist. The ultimate goal for some is the ability to switch cloud providers quickly, easily and cheaply. I'm not sure how feasible this goal is. I think it is inevitable that most solutions will be optimized for a particular cloud provider (SaaS, PaaS, IaaS, or other). Commodity services will get easier and easier to change but other services will always require work. Either way, the tendency towards more openness does not appear to slow down.

Challenge: Hype

Lesson Learned: Buyers are well informed and proceed with caution

Observations: There is a lot of hype around Cloud Computing but the early adopters are focused and well informed. I have seen technology buyers fall in 3 categories: 1) Focused on a particular solution 2) Skeptical but doing thorough due diligence 3) Skeptical and not adopting. What I find notorious is the absence of a 4th group that is rushing towards towards cloud computing with unrealistic expectations. Don't get me wrong, I'm sure they are out there but there aren't that many. It feels a little different from the late 1990s.

Opportunity: Innovation

Lesson Learned: There is an explosion of services, many of them truly valuable

Observations: When thinking about Cloud Computing, a majority of my acquaintances think about cutting costs and saving money. I like to focus on finding value. I have come across a large number of applications that I find incredibly useful and more importantly worth paying money for. These are innovative services that solve specific problems (e.g. collaboration, version control, project management, communication, etc.) efficiently and profitably. All the necessary signs of sustainable economics.

Opportunity: Globalization

Lesson Learned: The world is flat but the cloud makes it flatter

Observations: Call me naive but I must confess that I have been truly surprised by the global reach of Cloud Computing. I have worked with customers in 4 continents with remarkable ease. Somehow, the Cloud's always-on nature enables a familiar (standard?) and relatively efficient marketplace; almost like a new lingua-franca. Like I said, call me naive.

Decision Management and the Cloud

Last week Predictive Analytics World brought together a fantastic collection of minds to share case studies and expertise. A theme echoed in multiple sessions and conversations was that analytics are a necessary but not sufficient ingredient for success. To succeed it is critical to have a strong alignment and integration of technology, processes and corporate strategy. Not an easy task but the ROI tends to be irresistible and mastering this act is at the core of Decision Management.

What does Cloud Computing have to do with effective Decision Management? Well, one of the most obvious aspects is better analytics. Cloud computing offers more storage and more processing power at lower costs. More computing power and more data for less money seems quite attractive. Furthermore, these characteristics make predictive analytics accessible to many more organizations and applications. I like to think about it as the democratization of predictive analytics made possible by Cloud computing.

But that is just one part of the story. Predictive Analytics on the cloud will succeed because of the Cloud's standards and open platforms. Operationalizing analytics behind the firewall of a large corporation can require the custom integration several layers of expensive software and in-house applications, e.g.: point of sales systems, call centers, databases, rule/workflow engines, analytic engines/models, etc. The cost and complexity of these projects can easily challenge the most optimistic ROI models.

Fortunately the Cloud is being designed precisely to simplify these scenarios. For example, let's consider Salesforce.com, one of the leading Cloud platforms available today (along with Netsuite and Intuit among others). Salesforce simplifies integration because it has a rich API based on open standards. Salesforce has a powerful workflow engine to automate business processes a flexible data repository and native support of email, social and mobile channels. All of this functionality is available on demand on a pay as you go basis. Similar functionality is becoming more and more popular among cloud platforms but getting it on-premises is far more complicated.

The Cloud can deliver more powerful analytics and also help make them actionable. Now we just need alignment with the Corporate Strategy but we'll leave that for a future post.

Doing more with less

Christopher Musico wrote a well timed piece for DestinationCRM describing how some companies are leveraging predictive analytics to become more competitive. It comes as no surprise that during challenging economic times companies try to be more efficient by making better use of their assets. And what better asset than their internal databases?

I think it is safe to say that by now most companies (large and small) have deployed relational databases and reporting software of varying sophistication. This reporting tools have been asked to answer questions about historical events. Questions about 'what happened', about 'the impact (how much, how many, how often)' and even more specific questions that require drilling down to granular levels of information to understand where exactly the event took place (place, product, point in time). Some more advanced companies have even deployed alerting systems to be notified as soon as certain conditions occur. The natural next step to develop competitive advantages is to deploy analytic solutions that can predict and optimize future events.

This conclusion might seem obvious to many. Christopher's article includes the results of a survey where more than 50% of the respondents intend to deploy predictive analytics in the next 6 months. Predictive Analytics can bring many benefits but effective deployment is no easy task. The software cost, skills shortage and infrastructure complexity can be significant barriers to entry. Not to mention the necessary changes in culture and business processes.

Traditionally, the successful deployment of predictive analytical solutions has been reserved to a handful of large companies with vast resources. It is nice to see organizations like USTA succeeding with these projects. I believe this is a sign of things to come. I think the intersection of Cloud Computing and predictive analytics will create new possibilities for powerful and accessible insight.

What if the Cloud never makes it to the enterprise?

David Linthicum wrote an interesting piece about the cloud reality setting in. The enterprise is cautious and a bit skeptical about the Cloud; as it should. Frederic Paul at bmighty.com writes about the Forrester report that asks "Why not run with the Cloud". There seems to be a general agreement that when it comes to the Cloud the question is not IF but rather WHEN and HOW.

But what if the answer for the enterprise is never. What would happen if the enterprise never adopts the Cloud (at least the cloud as I like to think about it). What are the risks of inaction? How competitive would those enterprises be?

I believe history would repeat itself. No matter how large or mighty, those corporations would collapse unable to compete against more efficient and more innovative competitors. Just like Chrysler, GM or the print media industry. I echo David's opinion: 'there are pros and cons, let's understand both' (paraphrasing) and I would like to add that companies need to go one step farther and start focusing on the HOW. The ones that do will deliver more value to customers and shareholders for a longer period of time.