December 22, 2009

Making sense of the cloud: 15 tips for software CEOs

by Adam Stone, Senior Writer, SoftwareCEO

Our sources…

Jeff Kaplan Principal of consulting firm THINKstrategies and founder of the SaaS Showplace directory

Mini Peiris VP of product marketing at NetSuite, the fast-growing SaaS vendor with an offering for software companies

Daryl Plummer Gartner Group VP and Fellow who follows cloud computing

Dennis Quan IBM's director of autonomic computing

Treb Ryan CEO of OpSource, an award-winning SaaS hosting company

Damp, ill-defined, wispy, and ever-changing: They don't call it "the cloud" for nothing.

The cloud offers software firms lots of ways to save money, time, and headaches. You can:

• Offload tiresome tasks to a SaaS vendor
• Grab hold of elastic capabilities for e-commerce, processing, or storage
• Find prospects, land sales, support customers, and run your back office
• Get a development platform, bring together dispersed R&D teams, and deliver your own software on-demand as SaaS.

But how can a savvy software CEO get started with the cloud? Plan a winning strategy? Or pick a cloud vendor for the long haul?

For a guide to the cloud — expressly for software CEOs — we spoke to some leading players in this area. Here are their 15 considered tips to help software CEOs make sense of the cloud.

Making sense of the cloud tip #1: Be careful how you use the term
Let's start at the beginning, trying to define this nebulous term. Despite all the recent hoopla, the cloud is really nothing new.

Here's Oracle's Larry Ellison during a recent public rant: The cloud is just "a computer connected to a network." And that's been commonplace for 10+ years.

"What do you think Google runs on: water vapor? Come on?!" says Ellison. "It's databases, and operating systems, and memory, and processors, and the Internet! And all of a sudden, it's none of that — it's the cloud?!"

TechCrunch posted a five-minute video clip of his rant here.

We concur. Be careful how you use the latest marketing-term-du-jour, or it may come back to haunt you.

As shown in the following graphic, most people agree that "the cloud" includes these three levels:

• Software-as-a-service, the largest chunk of the market to date
• Platform-as-a-service, for developing and hosting SaaS apps
• Infrastructure-as-a-service, for on-demand processing and storage.