Re: Cloud story is no longer SMB
Doug,
What Workday has proven is that it can sell HR apps to HR functions in the Fortune 1000. What SalesForce.com has proven is that it can sell to Marketing and Sales functions in the Fortune 1000. In both of these situations you have vendors selling to functions that like to be independent of other corporate functions, namely corporate IT, often times have their own "shadow IT" function and are know for rogue purchasing. Neither vendor offers a full core app ERP/CRM/SCM solution, so they can prove nothing in this space. In addition, while SalesForce.com's CRM capabilities has decent breadth, most of the implementations are around a specific function like opportunity management and very few are a true broad based CRM implementaiotn. In your article, SAP addresses both Workday and SalesForce with their "edge App" strategy. So neither Workday nor SalesFroce has proven anything about replacing core ERP/CRM/SCM functions like order management, customer service, field service, manufacturing, maintenance, inventory management, capital project and asset management, procurement, and finance.
In your article, SAP says that on premise implementations of their Business Suite offer lower total cost of ownership. This is a key statement as it says a lot about their cloud strategy. They don't see a business case for Fortune 1000 on premise customers to start switching to a cloud version of their business suite. I personally don't see a business case for this either, as the infrastructure benefits of virtualization and scaling can be had with no change in the application model (i.e., private cloud) and the Fortune 1000 typically have the technical capability to do this internally. What other benefits exist that would drive them to a public cloud app model? And do these benefits (if any) outweigh the transition costs and more limited functionality?
I'm not trying to be combative about this topic, but I see a lot of hype about cloud and very little in the way of facts or true business case driven arguments that prove the cloud transition is going to happen (again I'm speaking of core apps, not one off implementations) in the Fortune 1000. I would love to see an article sighting real facts, figures, and profiles. Doug, can you or someone else at InformationWeek provide some facts and data points that prove the assertion that the Fortune 1000 are going to abandon on premise for their core ERP/CRM/SCM needs and move to public cloud based application solutions? How about profiles of 10 Fortune 1000 companies that have made the core app switch? This could be a great article that really separates the hype from the reality or proves the hype is reality.