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All about the Cloud

There’s been a few of the big names talking up the move to the Cloud over the past week.

Marc Benioff from Sales force writes an essay on Sandhill.com: 2020: I See It Clearly – Through the Clouds

The article is packed with great quotes …

Thanks to cloud computing, sensitive information is no longer prisoner to a device, data is accessible from anywhere, and collaboration is enabled like never before.

Nikesh Arora shared a story to which we can all relate. He was late for a flight. Airport security was the usual tough slog: Pockets empty; shoes off; laptop out. With moments to spare, he boarded the plane—and then realized his bag was a little too light. His laptop was back at security.

The loss of a key executive’s laptop would be a considerable cause of concern for most companies. However, unlike most of the laptops that passed through Heathrow that day, there was not much on this computer—certainly no sensitive data. As soon as Mr. Arora got a new laptop, he connected to his Google Apps, and was back in business. Nothing was lost, nothing was comprised, and a whole new way of doing business was gained via the cloud.


“When the network becomes as fast as the processor, the computer hollows out and spreads across the network.” That is both an accurate description of what we are seeing today—and a dire prediction for the future of traditional software.

We are experiencing a phenomenal change in our industry with the rapid adoption of cloud computing. The last time we saw such a shift was in the 1990s when the PC revolution morphed into client-server and challenged the mainframe for dominance of the enterprise. That transition threw the balance of power from stalwart companies such as IBM and DEC to challengers …

Today, every major analyst firm sees cloud computing expanding its share of the overall IT market. Gartner Group predicts that cloud computing will continue to be the top strategic opportunity in technology this year, and it has forecast that cloud revenue could grow from $56 billion in 2009 to $150 billion in 2013.

Customers are voting for the Cloud with their dollars, euros, and yen because the software industry grew too greedy, too complex, and too out of touch with the customer. Outrageously expensive to buy, costly to maintain, and difficult to change, traditional client-server software has failed customers for too long.

Customers pay as they go; vendors recognize revenue as they deliver the service. This model aligns the vendor with the customer’s success. That’s a significant change over the way we viewed the relationship when I was in the enterprise software business, when it was all about making the sale. Today, cloud computing vendors know they have to build enduring customer relationships, not the one-night stands that define traditional enterprise software sales.

The new opportunity this affords us—the ability to work in real time—is a big change from the past. While market shifts happen in real time, deals are won and lost in real time, and data changes in real time, the software we’ve used to run our enterprises has been in anything but real time. New real-time cloud applications, platform, and infrastructure mean that when a market zigs, customers won’t have to wait weeks or months for their software to zag. It’s instant—and that’s a timeframe we’ve come to expect.

In 2020, the “office” need not be much more than an Internet connection. I can’t wait to see what entrepreneurs start in coffee shops, garages, and rented apartments. Right now, we are authoring our own odyssey towards economic recovery. If history serves as a soothsayer, this will be a time of robust business formation and innovation. I can’t predict what the next great billion-dollar business will be, but I can almost guarantee that it won’t be run on a rickety jukebox full of software hits from the 90s.

Also Steve Balmer has been talking Cloud today: Ballmer: Microsoft ‘Betting Our Company’ On The Cloud

About 70 percent of Microsoft employees are working on cloud-related projects right now; that figure will reach 90 percent within a year, he said.

We’ve spoken to lots of accounting partners and customers over the last many months. They don’t really care that that there is this concept called “The Cloud” but it is very cool to me that they are excited about how their software now works and that they see the benefits and opportunities of collaboration. Even further it’s great to see small businesses really thinking about how they market themselves in this new era of connectivity.

All the things that Marc is saying we are experiencing first hand at Xero. It’s a definitely a fun time to be in software.

 

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3 comments

Jason Blumer, CPA
7 March 2010 #

Hey Rod, here is another great blog post on how accountants are going to the cloud in the US: http://bit.ly/6JV8PW

Our firm is doing it too, and our clients love it!

Cecil
11 March 2010 #

Hi Rod, MYOB is also on the cloud recently. What impact would you think it would bring to the market share or market development of Xero? I guess it was just the matter of the time for MYOB to embrace the cloud since day one Xero was built, would you mind to share some of your thought about Xero’s strategy to win the market when this has finally happened for real?

Rod Drury
11 March 2010 #

Really, have you seen it? What do you think?

So far all we’ve heard is that it looks a lot like Xero. That would explain the increase in hits from India on our website for the last year.

We’ve been doing this a long time and have three years head start. Xero is developed in house so that customer feedback can quickly be fed back into the product. I think we’re proved we know what we’re doing and really making life easier for small businesses.

I’m sure many people are waiting to see their offering before making the call to move online. So we’re looking forward to all those marketing dollars telling people about the benefits of being online :)

As soon as it’s available to look at I’m sure they’ll be lots of comments. We’re pretty excited about them launching. Has to be great for the industry and we’re sure great for us.

Rod

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