Dreamforce 10, the Cloud and Apple iTunes

I spend a bit of time at Dreamforce 2010, the big yearly conference organized by Salesforce.com and I was pretty amazed at the size of the event. Salesforce has done so much to democratize the Cloud and the usage of SaaS applications for the last 10 years, and they are still pushing and pushing, embracing changes as it comes.. Here in the bay area, the only things you see on billboard are “Cloud” “Cloud” “Cloud”, and it’s not the weather channel.. Everything and anything is in the cloud now. It almost looks like a rally cry to make this shift happen once and for all.

Among the big announcements: Database.com, the database in the Cloud. Salesforce already had that available and it’s been basically rebranded/repackaged to be able to market it better. The idea is simple, instead of having to manage your own database in the cloud with the issues of Scalability, redundancy, maintenance, etc.. now you just put your data in database.com and you don’t have to worry about all this. I can definitely see the value in here.. upgrading and maintaining a database is not trivial, and a slow database that isn’t ready to scale can really kill your product. I’m not going to dive in the details of pricing but it seems small startup can start using based on a  Freemium model (based on usage).

The more interesting announcement was the acquisition of Heroku, a hoster for Ruby on Rails applications.. That one is pretty amazing. Salesforce now has one of the biggest, most efficient Ruby platform that will will be seamlessly integrated with database.com and obviously the rest of the Salesforce clouds. It’s not there yet, but should be pretty shortly. What does it mean from a startup stand point? Well, when I wanted to start effecteev, I really thought about salesforce as a potential development environment but chose not to because of the proprietary language that I had to build it on. Also finding Salesforce developers wasn’t as easy as PHP/Ruby developers so we made the choice of using an open source PHP framework instead. Well if I had the choice again today, I guess I could use Ruby on Rail, with database.com and be perfectly happy with it. My collaboration startup would have been perfectly integrated into any Salesforce customers, and the efficiency that it is providing could have competed with Salesforce Chatter (remember, effecteev was over 2 years ago!!). By acquiring Heroku, Salesforce hopes to drive more developers on the force.com platform and bring to light the value of the ecosystem for SaaS businesses. The success will depend on how the Ruby community reacts though. This is why Salesforce kept the name Heroku, will support existing applications, and will leave the site on its own I guess.

To talk more broadly about the Cloud, what is the major issue for the adoption of the Cloud? Security! Businesses are afraid to have their data in a place they don’t really control and that is a very natural feeling. Having sold security product for many years, and some SaaS Security product as well, this issue comes up every time over and over. It makes sense, and I understand that a cost benefit analysis should be put in play to make the decision to move to the cloud. But who said people are rational? A simple cost benefit is not the only solution: decision makers think about their job, their career, how they are perceived with their hierarchy: What if they decide to go for this new system, in the cloud, and it doesn’t work as well, are they going to be blamed for it? People are risk averse so what is needed is a culture change which is much harder to achieve.

A culture change means that people, all the way up to the top of the company, feel comfortable with the idea of the Cloud for personal things. My belief is that this comfort is something pretty profound that needs to build as a personal experience. This is why I believe that the success of the Cloud will come thanks to consumer products going to the cloud and in particular things like the apple iTunes Cloud for music.

The iTunes Music Cloud seems pretty far off the data of your enterprise but this is how I view things: People already have most of their emails on demand (web based), that has been the case for a while. Now, people are starting to stream video through Netflix or amazon on demand. they feel good about it, and even stop buying DVDs, or even storing movies on their computer.. What is that good for? it’s all available in the Cloud. Music is another level: you access your music much more frequently than movies and people’s interaction with the readily available important data (their music) will make them more and more confident about putting very personal stuff out there. As they realize that the quality of service if actually really good, that they never loose something, that they can access from any device, they will start asking themselves: Why can’t I access my customer data, my presentations, my invoices, my ERP the same way I access my music and my photos all the time? People are going to feel that the level of comfort they have for personal things should be the same for their work stuff.. People have Blackberries, Androids, iPhone, iPads, Laptops, Netbooks, all those stuff are connected devices that they can use to access there Music online, their photos, their videos, theirs documents, etc.. why not corporate stuff?

This is when the real shift is going to happen, when people, not corporation, start feeling uncomfortable not being able to access all their corporate data, anytime, anywhere, in the Cloud. This shift is coming, and apple will play a huge role in it. When an IT manager will decide to not move to the Cloud, his/her boss will start seeing it as a mistake, and by the way, the little cost benefit analysis now is looked at much more carefully because the psychological hurdle is not there anymore.

Cloud and SaaS – do people really know what they are talking about?

I keep seeing blog posts, articles and presentations about Cloud and SaaS, the two words being used interchangeably.. Are they doing it on purpose?? I mean, if you are a company using the SaaS model are you saying Cloud company because it’s hype right now?? SaaS and Cloud are not the same thing! you cannot switch one another to be hype! Let’s clarify very simply:

SaaS: Software as a Service = You pay for the usage of an application (or a set of application) as you go (it’s like a service). You do not update or maintain the product, you access it and use it (it’s as a Service). It’s a Software (like Software as a Service). An example is Salesforce CRM solution. it’s a CRM software, that you can use as a Service. SaaS.

Cloud: “Something” from which you draw resources without really knowing what’s in there. Basically it’s a bunch of Server, routers, switches and load balancers with a OS layer that removes all those terms from you vocabulary and make it look like a Cloud. You want more power, you get it, you want more space, you get it. Who or what provides it, it’s the Cloud. you don’t need to know in fact.A Cloud is not a SaaS, it’s an infrastructure on top of which resides “your needs”. SalesFroce has something called Force.com which is a Cloud, on which third parties build SaaS offerings.

As I said, SaaS companies often times use Clouds to put their product. Simply because the SaaS model will grow as you get more users and you don’t want to have to buy too big right away. So starting on Cloud allows you, as a SaaS provider to grow as you go.

There is a lot more to the Cloud and to SaaS than what I just exposed here, but please, stop saying Cloud company when it’s a SaaS company and vice versa. It just demonstrate right from the start that you have no clue what you are talking about.