It often seems that when one approaches the subject of the cloud (or online computing, if you prefer), there is the choice between being strongly positive or enthusiastic. The push to the cloud model is so strong that views in opposition often seem like they support a pre-industrial age. Even recent high profile news that’s impacted on matters of national data sovereignty and security don’t really undermine the model as a whole.
Cloud technology, despite the hype, is not a revolution; it’s an evolution that utilises the maturity of the Internet. By definition an evolution takes time. In contrast a revolution changes the world in weeks. As customers and suppliers, it has taken 15 years to get to where we are today with the Internet, and I would bet it will take even longer before everything runs from the cloud. And that’s fine – it’s a journey, not a race that each company goes on.
The cloud, in my opinion, brings many good things to the software industry that improve customers’ businesses. It means solutions can be developed more quickly, agile development becomes standard and seamless upgrades become a given.
Software vendors are changing and the cloud is the trigger – but the change is embraced because it creates real value for customers, and because customers want new flexible ways of working.
The cloud implies a business model based on usage. The ‘per month, per user’ pricing model is the first step that will evolve into fully consumption-based pricing. The cloud will also open software like ERP to many more users than today. Because it’s more flexible and web based, we can expect that the cloud will provide much easier access to an ERP system, or any other, for example.
C-level executives will, at last, benefit from the wealth of data that is created by their ERP and other software systems. This is particularly true in mid-sized companies today where the CEO is in the operational driving seat, yet can be driving with their eyes closed!
Casual users will also be able to contribute more. This is true for occasional internal users but also for external partners, suppliers or customers. The 25-year-old concept of an extended enterprise can become a reality, empowering businesses like never before.
All these changes can bring great value to customers, but the cloud is not the means to get there but only the trigger. It has changed mind-sets and offers a technical solution. Vendors can deliver the same value to customers via other mechanisms.
If I look at the ERP world there are many examples of strong adoption of financials in the cloud when manufacturing, which requires significant customisation and close connection to shop floor control systems. Today a vast majority of mid-sized companies do use their ERP systems on fat clients without web access, when such systems have been available for over ten years now.
Why should we expect that adoption of full cloud solutions will be that much faster? And does this mean that such traditional customers shouldn’t have access to the benefits? Adoption of the cloud is a long journey. Cloud will become a standard, but what can vendors do for customers in the meantime?
My conviction is that although the cloud will not dominate for some time in the ERP space, it will profoundly change mind-sets and drive software vendors in a new direction. Building hybrid systems and leveraging the best of the on-premise and cloud worlds will help the transition, drive adoption and create true value for customers. Customers are pragmatic so vendors have to be inventive.