Enterprise software and the emerging cloud landscape
The model for enterprise software deployments is evolving - elements of a traditional, customised, on-site ERP are breaking away and being used by businesses as discrete software components.
The effect of successful public companies like Salesforce.com has been to change what businesses focus their resources on. They are now often happy to adopt a standard SaaS CRM system, for example, instead of wasting resources fully customising a CRM that's in reality very similar to all their competitors. The potential savings are immense, what was once a multi-million-dollar ERP implmentation can now be purchased on a credit card, without looking foolish.
The cloud and software-as-a-service (SaaS), along with several other technology trends - including mobile, analytics and consumerisation - are profoundly changing the enterprise software landscape. We are experiencing a shift where monolithic applications (like Oracle and SAP) and the model behind them, are giving way to a series of interconnected clouds. Just take a look at Saleforce.com's current product offering for an example, they split their products into interconnected clouds for Sales, Service, Marketing, Commerce and Analytics.
Broadly speaking, there are four types of 'Cloud' emerging to meet the diverse requirements of the modern enterprise - an Industry Cloud for business workflows (also known as the Operations Cloud), feeding transactional data to an Administration Cloud, interfacing with customers via a Customer Cloud (or Communications Cloud) and hosted on an Infrastructure Cloud. These clouds are then densely interconnected through APIs to share data and reduce duplication.
Or, if you look at it from the context of a business's Intellectual Property, the Industry Cloud creates IP, the Administration Cloud reports on IP, the Customer Cloud communicates IP to customers, whilst the Infrastructure Cloud stores IP.
The Industry Cloud can be loosely defined as all applications that help create and/or deliver the businesses products and services. This includes productivity software like word processors and spreadsheets, as well as more workflow-driven software like field service automation and inventory management.
There is frequent customisation and specialisation by industry verticals within the Industry Cloud (hence its name), as every industry requires particular functionality that others may not. i.e. Point of Sale for retail, Warehouse Management for distributors, Appointment Management for service providers, etc..
If you were to associate it with a particular managerial responsibility, the Industry Cloud would sit firmly within the responsibilities of the COO (or similar executive responsible for the day-to-day operations of the business).
Software in the Industry Cloud include:
The Administration Cloud consists of all applications that assist with the compliance and management of a business. In other words, any applications responsible for financials, accounting, human resources and performance reporting.
The Administration Cloud generally integrates with the Operations Cloud through the relationship between financial transactions and operational processes.
If you were to associate it with a managerial responsibility, the Administration Cloud would be essential software for any CFO.
Due to compliance requirements, there is quite a bit of standardisation across the Administration Cloud, with applications from different vendors offering very similar core features.
Software in the Administration Cloud include:
Xero, Reckon, Intuit, Saasu, Workday, Infor
The Customer Cloud includes applications commonly bundled as unified communications, as well as the customer service, sales, marketing and social media applications that schedule, initiate and record customer communications. The customer cloud can essentially be considered a 'Customer Engagement Ecosystem'.
Applications in the customer cloud can be further classified as either systems of record, or systems of engagement. Systems of record are where the data is stored for transactions and interactions. Whilst systems of engagement are the medium that allows customers to interact with the company. To put it really simplistically, data from the interaction (in the system of engagement) is stored for future reference (in the system of record).
Systems of Record in the Communications Cloud include:
- Customer Service
- Sales Automation
- Marketing Automation
Systems of Engagement in the Communications Cloud include:
- Social Media
- Email / Email Marketing
- IM / Group IM
- Phone / Telemarketing
- SMS / Voice Mail
The Customer Cloud supports the Industry Cloud by enabling and recording communications between the business and it's customers, enhancing the data flowing through to the operational software.
If you were to associate it with a managerial responsibility, the Customer Cloud would be very useful to the CSO/CMO (or potentially the CEO, if they are ultimately responsible for sales and/or marketing communications).
It has the most vendors, and is by far the most competitive cloud, as there is generally little to no customisation required and an extremely broad market for applications.
Software in the Customer Cloud include:
BMS CRM, Salesforce CRM, Infor CRM, Zendesk, Adobe Marketing Cloud, Google Gmail, Google Hangouts, Microsoft Outlook, Microsoft Skype, Twilio, Campaign Monitor, Mailchimp, Twitter, Facebook
Cloud computing relies on sharing resources to achieve coherence and economies of scale, similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing is the broader concept of converged infrastructure and shared services. The Infrastructure Cloud focuses on the governance, infrastructure and platform applications that support the concept of cloud computing.
The Infrastructure Cloud supports the other clouds by providing the underlying framework, platform and infrastructure that allows them to be scalable, redundant and available anywhere. It's the technology that has allowed for the evolution of cloud computing and the emergence of new models for enteprise software.
If you were to associate it with a managerial responsibility, the Infrastructure Cloud is clearly the remit of the CIO/CTO.
Software in the Infrastructure Cloud include:
Amazon Web Services, Microsoft Azure, Google Cloud Platform, IBM, HP, Rackspace, VMware, Docker
The glue that binds the clouds together are a series of publicly available application programming interfaces (APIs). An API allows one piece of software to make use of the functionality of, or data available to, another. It's a machine-to-machine interface rather than a user interface, that allows developers to access the functionality of other software applications through well-defined data structures.
Selecting a number of discrete applications from different vendors, then integrating them via an API can reduce the need for individual customisation, providing a lower total cost of ownership.
There are of course many vendors that offer applications across multiple clouds (like BMS). These multi-cloud services should still have APIs to allow customers to round out their software solutions, as a single vendor will rarely be able to service all of a customers specific needs without extensive customisation.
I could for example utilise Microsoft Office 365 (hosted on Microsoft Azure), BMS (hosted on AWS) and Xero (hosted on AWS) to setup the software and services required to operate an equipment servicing and distribution business with 200 staff. The software would be scalable, redundant and available anywhere. All for a fraction of the cost of implementing a similar on-site solution with SAP or Oracle.