Bringing the Cloud Down to Earth

Without getting into the umpteenth discussion about what, ho wand where the Cloud is, I think we can safely assume that for average people, and especially for businesspeople, Cloud Computing is when you run an application or store some data on someone else’s server somewhere out there “in the Cloud”. By this definition, Salesforce.com, just to name an instance, fits just about everybody’s idea of Cloud Computing .

Oracle’s Larry Ellison would beg to differ, and he actually traded insults onstage at Open World 2010 with Salesforce’s boss Marc Benioff, whom he accused of “just running a few applications on some servers.” To which Benioff memorably replied: “You can’t run a cloud in a box, Larry” – referring to Oracle’s jumbo-sized „Exalogic Elastic Cloud“ which Ellison had just introduced.

Which is funny, because according to Chandar Pattabhiram, VP Product Marketing at Cast Iron Systems, a small Silicon valley startup recently acquired by IBM, the box metaphonre is actually a pretty good description of Salesforce itself.

The problem with most SaaS applications (and Salesforce is regularly cited as the best-known example of SaaS at work) is that they are completely self-contained. Meaning that they have no connection to the other systems a company is running. In fact, many CIOs will tell you (if they’re honest) that they probaly don’t know if anyone is running Salesforce in their company, ince they probably didn’t ask IT’s permission in the first place. This, by the way, is a prime reason for the paranoia many CIO feel towards Cloud Computing in general, since it implies a loss of control over what is going on in the company IT-wise.

The folks at Cast Iron have decided to address this problem, and they sem to be doing a very good job. At least good enough to convince IBM they should invest. Whether they actually invented the term “cloud integration” I don’t know, but they have at least gotten a big head start in making it happen.

Basically, Cast Iron creates a link between Cloud (or at least SaaS, if you are a purist) applications and your backend systems like SAP or Peoplesoft where all the nice data resides. That way, it becomes truly part of your existing IT, and the owners and operators of the SaaS appliance no longer need to retype in data they pull from the other corporate systems. “It’ a productivity app for the Cloud”, Chandar boasted when I visited him last week in Mountain View. It also is itself a neat instance of Cloud Computing, being cloud-based and offering the typical “pay as you go” model dear to the hearts of many business managers who are using SaaS as a way to leapfrog expensive in-house software development projects.

But Chandar also thinks his product will make cloud providers happy, because it can help lower the churn rate of subscribers to SaaS services. I didn’t know there was a churn problem in the industry, but Chandar quickly brought me up to speed there: “Anything between .75 and one percent per month is considered normal”, he maintained, so cloud providers are losing about ten percent of their customers every year. Okay, some of them are simply going out of business, but most of them apparently suffer from disillusionment or overly inflated expectations. And in some cases the CIO finally found out someone in the company was practicing IT without a license and stomped on it.

According to Chandar, Cast iron can help providers lower their churn rate to about one percent per annum, thanks to integration with backend systems which he says creates loyalty by necessity. “It’s a stickiness app for cloud providers”, he says. Tying the SaaS or Cloud app into the existing IT infrastructure makes it more difficult for companies to opt out.

If you want to know just how Cast Iron does it, try talking with Chandar or his colleagues. According to them, it’s based on a „configuration, not coding“ approach and simply involves installing a few TIPs and PIPs (“Template Integration Processes” and “Packaged Integration Processes“) and engaging in a bit of “UI mashing”. However, I seriously recommend we all rethink the idea of bringing the Cloud down to earth: By creating a separate, unconnected “second IT”, companies aren’t really solving their problems – they’re creating new ones.

One reason that business departments tend to wander off on their own towards Cloud Cuckoo Land is that IT departments are too slow in responding to the needs and wishes of business. And here is where they really have to take their point of departure. Yes, you can do SaaS if you want, CIOs should say to their friends on the other side of the company, but please, at least tell us about it and let us help you make sure your application can actually the data you need in a timely and managed fashion.

If by doing so, CIOs can dispel their own deep-seated angst about Cloud Computing, so much the better..