Great Article

on the confusion surrounding Cloud Computing...remember, it is the Business Process that counts!!!

The Internet Industry Is on a Cloud -- Whatever That May Mean

Forget ASP and Web 2.0: Tech Companies Push Cirrus, Stratus, Other Cumulo-Nebulous Lingo

By GEOFFREY A. FOWLER and BEN WORTHEN

Ever since Google Inc. Chief Executive Eric Schmidt publicly uttered the term "cloud computing" in 2006, a storm has been gathering over Silicon Valley.

Companies across the technology industry are jockeying to associate themselves with clouds. Amazon.com Inc., better known for peddling books online, began selling an Elastic Compute Cloud service in 2006 for programmers to rent Amazon's giant computers. Juniper Networks Inc., which makes gear for transmitting data, dubbed its latest project Stratus. Yahoo Inc., Intel Corp. and a handful of others recently launched a research program called OpenCirrus.

While almost everybody in the tech industry seems to have a cloud-themed project, few agree on the term's definition.

"I have no idea what anyone is talking about," said Oracle Corp. Chief Executive Larry Ellison, when talking about cloud computing at a financial analyst conference in September. "It's really just complete gibberish. What is it?" He added: "When is this idiocy going to stop?"

In its broadest sense, cloud computing describes something apparent to anybody who uses the Internet: Information is stored and processed on computers somewhere else -- "in the clouds" -- and brought back to your screen.

But no two clouds, apparently, are alike. A company's backroom mass of servers and switches is cloudlike. So are social-networking sites like Facebook Inc., or the act of buying a book on Amazon. Some clouds, like Google's email service, Gmail, are public. Others, like corporate networks, are closed to outsiders.

Part of the problem, say observers, is that the tech industry has become bogged down in jargon. Companies have long pushed the likes of "network-distributed parallel processing," often packaged as "solutions" that are "end-to-end" and "scalable." Cloud sounds much nicer.

"What took them so long? Cloud-based services seem much easier to grasp than 'Application Service Provision.' ASP -- who came up with that?" says Michael Litchfield, a creative director at Omnicom Group's Doremus, a communications firm that specializes in technology and financial topics. "The cloud is accessible. It may, in fact, be brilliant."

And possibly overused, says Hewlett-Packard Co. executive Russ Daniels. He says H-P, a backer of OpenCirrus, tries to use the catchphrase only when appropriate. "There is so much pressure to just go with the flow and wrap everything up in this single word," said Mr. Daniels, H-P's vice president and chief technology officer of Cloud Services Strategy.

Despite its recent surge in popularity, the cloud is among the oldest pieces of computer jargon, says Alex Bochannek, a curator at the Computer History Museum in Mountain View, Calif. For decades, engineers drew them in schematic diagrams to show where their own network joins another whose inner workings are unknown or irrelevant. "You symbolize that with a cloud, or some amorphous shape," says Mr. Bochannek.

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Salesforce.com

In San Francisco, workers greet attendees at a November conference on 'cloud computing' sponsored by Salesforce.com. The tech industry has adopted 'cloud' as a catchphrase, though few agree on what it means.

By the late 1990s, clouds had become the go-to metaphor for all things Internet. The PowerPoint set used cloud icons in their presentations, at times referring to the Internet simply as "the cloud." New shades of meaning emerged over the past decade as Google and other Internet companies created software that could run simultaneously on multiple servers -- hence, operate in a "cloud."

At a 2006 conference, Google's Mr. Schmidt delivered his public description of the emerging model. He added: "I don't think people have really understood how big this opportunity really is."

Estimates, in fact, vary wildly. Research firm IDC predicts cloud computing will reach $42 billion in 2012. (It defines the segment as "an emerging IT development, deployment and delivery model, enabling real-time delivery of products, services and solutions over the Internet.") Gartner Inc. projects world-wide cloud-services revenue will rise 21.3% in 2009 to $56.3 billion. (Gartner calls it "a style of computing where scalable and elastic IT-enabled capabilities are provided 'as a service' to external customers using Internet technologies"; its forecast includes online advertising.) Merrill Lynch last year estimated cloud-computing revenues would reach $160 billion in 2011. (Merrill declined to provide a copy of its report.)

Analyst Frank Gillett of Forrester Research, which doesn't currently measure the cloud market, says makers of existing technologies -- "grid computing," "virtualization" -- are attempting to co-opt the word. Mr. Gillett calls this process "cloud washing."

Marc Benioff, CEO of online business software company Salesforce.com Inc., cottoned on to the term in December 2007. That was when he read a magazine article that dubbed Google and Amazon cloud-computing leaders.

"We were a laggard in using that name," Mr. Benioff says. For years, Salesforce had described its offerings in terms of "enterprise applications as online services," "online customer relationship management" and "on-demand business services." For his next presentation, Mr. Benioff added two slides on "cloud computing" and berated his staff for not getting Salesforce mentioned in the magazine.

"I couldn't believe how worked up he was about the term," says Tien Tzou, Salesforce's chief strategist at the time. "We had tried all sorts of terms to get the marketplace to understand what we were doing. Cloud computing was going to be the one that would stick," says Mr. Tzou, who went on to found Zuora Inc., a cloud-computing company.

In November, Salesforce held a conference that one of its speakers dubbed the "Woodstock of cloud computing." It hired people to stand outside a convention center in San Francisco, wearing white puffy jackets and holding oversized cloud balloons. Inside, projectors painted a digital sky on the ceiling. The Rolling Stones'"Get Off of My Cloud" blared on the sound system.

In the full fiscal year since Salesforce started using the term cloud computing, its revenue grew 44%. "I think it's the most powerful term in the industry," Mr. Benioff says.

Cloud-themed puns have since multiplied, generating even a few seemingly contradictory uses. Sun Microsystems Inc. recently unveiled a product called the "Sun Cloud." Microsoft Corp. sells a cloud service called "Azure," which the dictionary defines as a cloudless sky. Apple Inc., of course, is doing its own thing: Its new Mobile Me product is branded not with the word cloud, but with an image of one.

Dell Inc. applied to trademark the term cloud computing last year. The U.S. Patent and Trademark Office initially approved the application. But it changed its mind in response to an outburst of criticism, including from bloggers incensed that the term could fall under one company's control.

A Dell spokesman says the trademark was intended only to cover "the design of computer hardware for use in data centers." He adds that the computer maker has no plans to pursue the issue further.

For some, clouds are already empty puffery. "We've redefined cloud computing to include everything that we already do," Mr. Ellison said at the analyst conference in September. "I can't think of anything that isn't cloud computing with all of these announcements."

Still, Mr. Ellison acknowledged he was powerless: Oracle, too, would probably start using the label. Last week in an earnings call, Mr. Ellison made good: He described Oracle's upcoming software as "cloud-computing ready."

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com and Ben Worthen at ben.worthen@wsj.com

Subprocesses

Many software projects get caught between two divergent ideas: The high level, elevator pitch, process; and the nitty, gritty, piece of functionality. Rationalizing these two things is the trick to successfully deploying an application.

At our company, Bluewolf, we have defined the area in between these as the "subprocess." Our firm focuses on building and automating Demand Generation to Customer Care processes. We typically engage with organizations whose processes need updating, tweaking, or optimizing. We work with Marketing, Sales, Sales Ops, Channel Management, and Finance to define and automate the flow of information from customer inquiry to customer service.

Many people call this process CRM. And while CRM captures the high level idea, it misses the mark in recognizing the hundreds and thousands of processes that go into an effective Lead to Order process. In today's web driven world, where relationships are often predicated on a suppliers ability to serve up on-line content on a personalized, one-to-one basis, it is the subprocess that will ultimately determine a businesses effectiveness.

Here is an example: a customer of ours was having an issue because it had TOO MANY leads. Imagine that. And it could not separate the good leads from the bad leads. So many times sales people were wasting cycles on the bad leads. To solve this problem, we created an Intelligent Lead Subprocess. This subprocess created a lead scoring matrix, and automated the scoring of each lead. Then, the subprocess grouped the leads according to their score, and served them up to the sales people in a prioritized fashion. The customer's close ratio increased by 16%.

Subprocesses are the "plays" that an effective CRM system allows. They are the drivers of user adoption, and they have the greatest positive effect on the ROI of a Demand Generation >> Customer Care project. Most importantly, they are measurable.

For an example of the subprocess above, see http://www.screencast.com/users/ChrisP_at_Bluewolf/folders/Jing/media/7c6231e5-ed0b-4bba-9db4-089e164d93c6

Media Disintermeditation

The following is a great piece that discusses the state of the Newspaper industry.

http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/

SAAS Cloud Confusion

Lost in the religious debate surrounding the cloud-- is it salesforce.com, is it Google, is it Azure, is it all of the above?--is the discussion that matters most:  how do companies effectively improve their business process?  That, in my mind, is all that matters.  Go back to notecards and filofaxes if it'll deliver incremental and sustainable value (which, of course, it probably won't.)

With the emergence of a real dominant player--a.k.a. salesforce.com--that can be trusted and has the scale to handle enterprise transactions, enterprise accounts, and enterprise headaches, comes a whole bevy of vendors that are pretenders and that will get themselves in trouble by overpromising and underdelivering.  Many of these vendors are fueled with VC money that is running dry.  And many are filling niches which will prove too small to build sustainable businesses.

Every company that is evaluating the cloud and SAAS vendors should put their plans through a "Cloud Litmus Test."  Here is a link to a presentation that I gave at Dreamforce that  describes just how to do this http://everydayceo.blogspot.com/2009/03/is-crm-dead.html.

Is CRM Dead?

CRM is still out there. 15 years after Tom Siebel pushed it into the mainstream. It is one of those dinosaur acronyms that gets immediate name recognition, but lacks inspiration. Thud.

The Cloud, Social Networking, Facebook, Twitter-- all are mechanisms and models which threaten to push the CRM acronym into the junkyard once and for all, instead giving rise to the REAL power that CRM should deliver to the business--real business process automation. Being able to use data and tools that users LOVE, to reach customers, sell them products, understand their needs, and cement lasting relationships.

We view CRM with an eye to the past. We think it is about Leads, Accounts, Opportunities, Orders, and Cases. We think it is an "inward facing" application, used by marketing, sales, and support. But in reality, for CRM to deliver its promise, it is much, much more. Think about an airline. Think about their on-line booking system. Has that traditionally been a CRM application? No. Why not? Doesn't JetBlue's website get to the heart of managing customers? In fact, because it is so good, it alleviates the need for anything more complex in the background. The panacea for CRM is automating processes that put your customers in control, removing as much friction from the selling and service process as possible.

Today, CRM still brings with it the same challenges that it has never been able to shake: poor user adoption, messy data, complex user interfaces, difficult reporting, and poor integration with other systems. To overcome these challenges, and to push the old notion of CRM into the past, there are several things that forward thinking organizations can do to succeed at enabling effective business processes, meeting the ultimate goals of the business initiative:

1. Embrace the user. The "stick" mentality, particularly with this next generation of twentysomethings, does not work. Take the time and the effort to understand exactly what they need, and give it to them in the same way that FaceBook gives them information. Simple, inviting, and cool. Listen to the user before you listen to the executive suite. CRM fails without user adoption. Period. If you don't believe this, don't try it. You will fail.

2. Have a data-enrichment strategy. Every sales and support person is hungry for information that will make them smarter about their customers. Much of this information comes from 3rd party sources. Look at ways to integrate these into your CRM environment. A great example of this a is a company called Inside View.

3. Constantly improve. Organize efforts such that new features and functionality are being pushed out to the user. Don't be afraid to shut things down that did not work.

4. Focus on the sub-process. Focus on the layer beneath the traditional Lead>>Service continuum. For example, a CRM subprocess might be an automated approval process for discounts. It might be a lead scoring process to ensure that sales people are only working on qualified leads. Or, it might be a self-service grid to allow customers to pay extra for the exit row on your flight. Once the foundation for CRM is laid, it is the sub-process that delivers value.

5. Iterate. Avoid big-bang. Release new features in a drip fashion.

I'm not sure that we'll be talking about CRM in five years. I believe that the lines between technology and business will blur, and the things that matter--revenue, profit, customer satisfaction, and innovation--will drive new models and processes which 21st century technology solutions can easily support.

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Leverage

I spoke to a friend of mine today who was at some meetings in Washington, and the word is that it will take several years for the world to "de-leverage."

It is perplexing to all of us how this happens. Everyone lives beyond their means, borrowing from others, and then suddenly those that are lending are out of money as well, stopping the cycle--even reversing it.

So now we pump a bunch of money into the system so those that lend can do it again, and we are left with two questions: isn't that what got us in trouble in the first place? And, where does that money come from. Eventually, we all know, it has to be paid back.

Our company has never borrowed money in any significant amount. We have a credit card that we pay off every month; we have a $250,000 credit line that we dip into from time to time, but only to cover receivables which we are extremely confident in.

We are a pay-as-you-go business. We know exactly where we stand against profit on a daily basis. Over ten years we have grown to a $30 million company, and we have governed our risk by the fact that we are gambling with our own money. This, I suspect, is where most companies have gone wrong in the past few years. More often, they are gambling with shareholders money, and we have all learned that shareholders are 3rd or 4th in line when it comes to who the CEO is beholden to.

So, with the bailouts and TARP and HOPE that we return to rapid growth, let's pray that companies think twice before taking more risk than they can afford to take. It'll be interesting.