Salesforce.com, Workday Keep Cloud Momentum Rolling
The latest Salesforce and Workday results echo InformationWeek research: Cloud apps are moving beyond SMBs and into hard-core areas like ERP.
Microsoft is another vendor scaling up ERP in the cloud. Microsoft made its Dynamics GP and Dynamics NAV ERP systems available on the Windows Azure Cloud this year (as hosted services) and has promised to bring its flagship Dynamics AX ERP suite to Azure in 2014 (as a multi-tenant service). GP and NAV are typically used by small and midsized companies, but AX is more scalable, currently used (on-premises) by companies including Dentsply and Revlon (with $2.9 billion and $1.4 billion in 2012 revenue, respectively). Dell (a $57-billion-revenue giant) is also a customer, but it uses AX for a custom manufacturing resource planning app. Dell's core financial ERP system is Oracle E-Business Suite, and that's not about to change.
For now it's safe to say that companies in the Fortune 500 have no choice but to use conventional on-premises ERP software for their large-scale demands (we'll get to alternative deployment options in a moment). It's also safe to say that many enterprises may never consider cloud-based enterprise apps (also known as software-as-a-service -- the style delivered by NetSuite, Salesforce, Workday and the like). Despite all the cloud progress, 46% of our survey respondents are still not using SaaS. They cite data security (34%), data ownership (13%), auditability (11%) and integration (11%) as persistent concerns that prevent them from making the leap.
There are alternative application deployment options that don't involve SaaS, yet still get called cloud by some people. But here's where the use of the term gets fuzzy. Hosting, for example, has been around for years, and indeed it's used by 43% of our respondents. But good luck finding the kind of rapid hosting deployment or scaling capabilities that people associate with cloud deployment.
Private cloud is another alternative, and it's being used by 25% of our respondents. Some take private cloud to mean building virtualized capacity and services in your own data center (as we defined it). Others interpret private cloud as also covering one-off instances of applications supplied and maintained by a software vendor or vendor partner.
We asked our survey respondents which alternative deployment options they're "actively or potentially considering" for future use, and private cloud was the most popular choice (cited by 48%) followed by public cloud (34%) and hosting (26%).
What do most big enterprises want from cloud services? The bottom line is "trusting a third party to take care of the infrastructure," according to integrator Mark Willford, global managing director of SAP business at Accenture. "They don't want to have to build infrastructure and they don't want to be overly dependent on IT departments."
Cloud in this context can be achieved with managed services or private clouds. Nonetheless, many companies -- particularly financial services and global companies with European operations -- are sticking with on-premises applications, Willford says.
Given the diversity of opinions about cloud, we'll increasingly see a diversity of deployment options from enterprise application vendors. Microsoft and Oracle have been touting on-premises, private-cloud and public-cloud options for at least two years. SAP recently introduced its Hana Enterprise Cloud, which gives the company a managed service offering on top of existing hosting options and selected SaaS applications (including SuccessFactors, Business ByDesign, Sales OnDemand and so on). Infor and Epicor offer hosting and selected SaaS options. There's talk of a Salesforce.com private-instance government cloud for would-be federal customers, and you can bet that private-cloud options for security-sensitive companies won't be far behind.
As we conclude in our report, the new normal is that there is no normal where enterprise app deployment is concerned.
SaaS As Innovation Driver?Software as a service is the clear No. 1 way enterprises consume cloud. InformationWeek's SaaS Innovation Survey reveals three tips to get the most from SaaS: Make it a popularity contest. Have an escape plan. And remember that identity is the new perimeter.
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Join us for a roundup of the top stories on InformationWeek.com for the week of September 25, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."