I See Clouds in the Forecast

Unlike the technology analysts, I’m not paid to see the future. In fact, I’m not big on predicting what’s going to happen, but in this case, I have a strong feeling. Here’s how I see it in Jan 2009:

• The US economy has tanked
• The WW economies are tanking
• The software sector (technology) is changing
• The enterprise software vendors are way down
• IT depts are shrinking – people & costs

Lately, I’ve spent a lot of time researching Cloud applications, cloud stacks, and 3rd party cloud add-ons. Salesforce.com is a well know story, but the seismic shift is how that platform has been “genericized” and built out to become Force.com. Also, look at Amazon’s EC2 and Google Apps/Code/Engine. This is truly revolutionizing application development and thus will revolutionize IT across every industry vertical. This is not about SMB, this is about companies small to very large. Companies with 10 to 10,000’s of employees. You don’t have to be a ‘digital native’ to get this.

I will also add this isn’t about social networking. As these business applications develop, yes, they will have integration points into LinkedIn, etc. But it will be about providing value to the business, not about over-communicating with your virtual friends.

A whole new breed of software is being developed for the cloud applications and platforms. New types of monitoring solutions, new types of middleware, new tools, etc. In many cases, systems and security mgmt is being re-invented, as cloud-native. It’s exciting to see.

Where is this going? I predict that the enterprise software vendors will get slaughtered this year. Many will survive, but they will look very different when the economy does start to pick up. Given that companies and IT depts are shrinking now, I predict that when the economic clouds pass, the software clouds will roll in. When companies do start spending again, they will choose cloud applications for their new application needs. They won’t have the people or the budget to go back to an “old style” enterprise application, plus, they’ll find what they need on the market, on demand, and at a low $xx/user/month cost.

I’m not saying the world will abandon enterprise software and make a wholesale shift to cloud applications. Over the last decade, companies have collectively spent billions of dollars on SAP, Oracle, etc., so integration into these “legacy” apps will be important for more than a decade. What I’m saying is that the recession/depression will lead to a massive jump in cloud application adoption. I could be wrong, but I see the writing on the cloud….

About the author: Greg Davoll is an independent consultant specializing in software marketing and product strategy. Greg has over nineteen years of enterprise software experience across an array of branded technology companies including IBM, NetIQ, Sybase, BMC Software and Embarcadero Technologies. Learn more at http://www.linkedin.com/in/gregdavoll or contact Greg at greg.davoll@gmail.com.