I sat with a client yesterday who asked me a question about the cloud. The question was innocuous enough: “If I had a choice, why would I build anything, if I can get it in the cloud?” It was a fair question. But was it the right question?
This was a large manufacturer with several well-known household brand named divisions that operate mostly independently. There is growing opportunity to create more business value by sharing data between these divisions regarding such things as common customers for up-selling and cross-selling products and services, product data for better leverage and support, and global suppliers to help rationalize business spend. So I was there talking about data and analytics and how best to open up this new opportunity. But as we talked about the various methods, processes and technologies that would help, the client brought up the cloud question.
It was an innocuous question and a fair question until you realize the trigger behind the question. The trigger was referenced to the topical perception that Amazon and Google had already “won” the cloud war and that any technology the client might ever need or want ought to be running on the cloud, and so Amazon and Google were the default providers (i.e. winners). What was not clear was what “cloud” actually was. For example, the idea that Amazon sells more cloud compute infrastructure (IaaS) than any other vendor was not really thought through. IaaS is not ERP. The former is what IT uses to run its business. The latter is what businesses use to run their business. That important distinction was not clear in the mind of the client.
So I brought up a framework I had thought of a while back to explain what cloud really was, what it was offering today, and what it will offer in the future. Here is that framework:
- Software as a Service – SaaS
- The business applications that firms use to run their business. For this to work economically long term, such business applications will tend to multi-tenancy and will also tend to standardized business process support.
- Think of this (as a business user, not an IT person, as standardization or standard business processes as a service)
- Platform as a Service – PaaS
- The services used to help create new application – supplements apps in SaaS with unique “add-ons” that will extend or add new functionality
- Think of this (as a business user, not an IT person, as the source of unique business process extension – a form of innovation or differentiation as a service
- Infrastructure as a Service – IaaS
- The services used to create, sustain and modernize the infrastructure that supports the consumers of data such as apps, devices, etc., sources of data, and connections between the two
- Think of this (as a business user, not an IT person) as performance as a service
- Data as a Service – DaaS
- The data and services that will drive advanced analytics that will inform decision making across the business to drive improved outcome and business process integrity
- Think of this (as a business user, not an IT person) as insight as a service
I think this is an interesting way (perhaps not the only way, or even the perfect way) to look at the battle for the cloud today and where it will go in the not too distant future. For example, most clients assume “cloud” equates to IaaS. Many press articles will stat “Amazon leads cloud growth” and “Amazon dominates cloud sales”. That is a gross over simplification. Yes, Amazon is doing very well today in the infrastructure component of the overall cloud. But IaaS helps make IT more productive. IaaS does not easily make the business more productive since it does not change the way the business behaves. This is still very useful – since a more cost effective, higher performance-per-dollar IaaS will free up IT resources and money that can now be put to new uses. But what new uses? This whole IaaS thing is like a skirmish that takes place before the real war breaks out.
The real war will break out when solutions, offered via the cloud, can support business innovation and business differentiation: When cloud solutions drive business benefit directly and not benefits to IT. For that to happen we need to talk about what a business does (its business processes and decisions) and how a business operates, not what IT does and how IT operates. This might seem like a small point but in the overall scheme of things, in the overall war, I think this is a massive point. If I am lucky I might even be around long enough to be proven right (or wrong).
So this is where my little framework starts to be useful. Yes, IaaS is a well-known battle field and the armies are out there fighting it out. Of the next battle fronts, PaaS and SaaS will form up. In fact they are forming up already though they are not seen as important yet by many. They will be more important than IaaS to the business. SaaS will provide the core, basic, system of record business processes. That battle is just warming up. PaaS is seen as a distant front, even more closely associated with IaaS. I think PaaS is more useful in a SaaS dialog since it is PaaS that will allow me, a business leader, to describe unique business processes that extend the SaaS capability. So I think we will see a reordering of the troops and a redrawing of the battle lines here as PaaS gets drawn more close to SaaS.
Lastly, and less well known, is DaaS. This is probably the most important part of the entire stack yet few even perceive its existence. It’s a bit like the development of the atom bomb during the Second World War. If a vendor has a choke-hold over the business data that drives my applications, I have a problem. If a vendor has a choke-hold over the analytics that drive my decisions, I have a problem. DaaS provides the data, the analytics and another wave of innovation and differentiation to further extend SaaS and PaaS offerings. DaaS could trump all.
So yes, IaaS is important and yes, if what you look for exists in a cloud environment, go for it. But the question of what aspect of cloud is most important to you, and what your real options are, is much more complicated than simply thinking Amazon has won the war. The battle has not even really begun. We might even be in the phony cloud war.