Cloud Computing

Cloud computing is a major disruptive and transformational technology. Cloud computing is driving a major shift in computing by four major categories of vendors: applications (Salesforce.com, Netsuite, Google, Microsoft), platform (Salesforce.com-Force.com, NetSuite-Suiteflex, Google, Microsoft), infrastructure (Amazon, IBM, EMC, Google, Microsoft) and enablers (VMware, Adobe, Sun, HP).

In 2009, approximately two-thirds of ISVs and their customers will have one or multiple apps OnDemand and in the Cloud and will have either a pure OnDemand model or a hybrid OnDemand and OnPremise license model. Examples of personal apps include email (Microsoft and Google), spreadsheets and word processing (Zoho) and on-line document collaboration (Microsoft). Examples of business apps include Salesforce.com – CRM; NetSuite and Intacct-ERP; SuccessFactors – employee performance management; Genesys-Salary.com and Ultimate Software-HRMS.

Cloud computing will substantially change the way businesses either provide or acquire software, computing and support, as well as interact with their customers, employees, partners and suppliers. The shift to cloud computing will have a significant impact on organizations’ business and organizational models, operations, marketing, sales and customer service, development and support environments, security processes, and purchasing and contractual agreements.

The cloud computing trend is irreversible because of its TCO (total cost of ownership) ramifications. For example, Merrill Lynch estimates that an OnDemand CRM solution could have a 10x savings over an OnPremise licensed CRM solution. In addition, Merrill Lynch estimates that shared resources like processing, storage, and bandwidth will be more effectively utilized by a cost factor of at least 5-10x.