The Cloud is Falling

Yes, the cloud is falling. And on-premise software executives are lining up to explain to us why the cloud computing era is distant and the promise of SaaS and PaaS is false. I will let you decide after reading this post by Vinnie and the original Forbes article.

Here are 3 reasons why they are wrong because the following arguments are tenuous:
  • Cloud Success Requires End of On-Premise: The argument that all computing has not moved to SaaS (and probably will never) is a false argument. DEC and Tandem did not die out because people no longer run mainframes, many do. They just became irrelevant as the newer technologies grew faster and faster. For SaaS to succeed, on-premise does not have to disappear - but SaaS is growing much faster than on-premise softare.
  • Core Applications will not be Re-written: Yes, GE's and Wal-Mart's of the world will not rewrite their applications any time soon. But, they are always writing new applications; and, there are new Wal-Mart's being born that will live in the world of Google GMail and Force.com. You don't replace your 2 year old Ford SUV with a hybrid, you just buy a hybrid next time you are in the market for a car.
  • Control, Security, Scale: This argument has been hashed many times. Your data is secure based on what processes are in place - not where its stored. Your applications scale based on the software and hardware architecture - not whether its inside your firewall or outside. You have control over what your users access and when based on a the capabilities of your applications and platforms - not whether you installed it yourself. Companies like Cisco, Merril Lynch, Starbucks, Dell and many others are running more and more applications in the cloud. The truth is that a platform like Force.com can help enforce greater control (one single place to administer, provision and de-provision users), enhance security (a security fix for one customer becomes immediately available for all others) and scale easily (the platform scales across customers and applications rather than having each developer worry about scaling).
No one (at least not me) is suggesting that on-premise software will disappear - its just that growth in enterprise software will come from SaaS and not on-premise (which is growing at about 4%). Venture capitalists like Emergence Capital and Hummer Winblad are voting with their dollars!

No one (at least not me) is suggesting that on-premise software will disappear - its just that growth in enterprise software will come from SaaS and not on-premise (which is growing at about 4%). Venture capitalists like Emergence Capital and Hummer Winblad are voting with their dollars!

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