Cloudy days

Oracle OpenWorld‘s done for this year and I’m now spending the weekend trying to catch up from a week at the conference and get the post-conference write up and analysis started. As I think back on the week one of the most entertaining events was listening to Larry Ellison at the Financial Analysts briefing rant about cloud computing (for the 2nd year in a row). Its a well known fact that Larry is not fond of the term (frankly it took me over a year to get comfortable using it myself so I can empathize here). Last year’s rant (again at the Financial Analysts briefing at OOW) yielded one of my favorite Ellison cloud quotes: “the technology industry is the only industry that’s more fashion conscious than women’s fashion, I’m telling my marketing people to put cloud on everything”…a classic. This year the much quoted sound bite is “cloud computing is the future, it’s also the present and the past.”

As I was thinking back on these quotes and giggling (which I suppose could cause a scene as I’m sitting in my local coffee shop, Phil’z, really awesome BTW, you should check it out if your in San Francisco… and no I didn’t get sponsored to say that) it occurred to me that there’s an important point lodged somewhere inside these funny lines, have we clouded (sorry couldn’t resist) the SaaS message too much with all of the hype and jargon and are we obscuring the goodness in to much marketing? Do customers understand what we mean by cloud (actually do we all understand too)? And what about the other “technical” marketing things we keep seeing like multi-tenant / single tenant (sorry to bring this up again, but it’s key to my point, here’s my take on that subject), do they help prospects understand and adopt SaaS or are they in the way?

SaaS applications are growing ahead of the rest of the software industry, that much we can clearly see. But why? Personally I see lot’s of benefit to consuming software in the accepted SaaS model and I think that the customers that are buying it do as well. I’m starting to think though that this may be in spite of our marketing instead of because of it. OK, maybe that’s not completely fair, the important messages are also there; things like pay for what you consume, easier to implement (my post on that), faster time to value, lower TCO (although that one’s up for debate), don’t need to maintain your own infrastructure, simpler upgrades, easier to access from mobile / multiple devices, etc.

But I do think our fascination with clouds and technical jargon is doing some damage to our overall messaging. What are SaaS or cloud applications anyway? In my definition cloud apps are SW applications that are sold on a subscription basis (so the software is leased rather than purchased), maintained by the vendor (patches and upgrades are installed by the vendor or the vendor’s partner) and the app is available over the internet. The SW can be located at the SW vendor’s data center, a partner’s data center or even the clients data center by the way, but the customer pays 1 fee (not 1 to the vendor and 1 to the hosting partner). As far as I’m concerned that’s it, nothing else is required.

Do customers want multi-tenant over single tenant? I don’t think so, although some recent IDC survey data came up contrary to that point. On drilling into that more though, I think that survey helps prove my point, we’ve marketed multi-tenancy so much, customers have started to think it’s important to them, but can they tell us why… I doubt it. Multi-tenancy is only good for the vendor unless the vendor passes the cost savings on to the end customer… do you think that’s happening?

Oracle’s Anthony Lye has very openly stated that Oracle prices multi-tenant and single tenant deployment the same for on-demand apps (and the new Oracle Fusion Apps are architected so that they can be deployed in either model, customer choice is a good thing). Given the same pricing structure which do you think a customer would choose, a shared database with other customers (and yes, I know that it’s very secure) or their own database? With their own database they get more flexibility.

Alright, enough on that line of thought; you can read what I’ve already said about that if you want. My real point is that we need to look at the messaging again and focus on the value, on the benefit to the customer, not on technical jargon that doesn’t really matter to the customer. I suppose that’s a good marketing lesson no matter what your product for that matter. It’s very important right now to SaaS or cloud vendors though, because I believe we’ve over marketed things that are not important to the customer and the real message is getting lost. Let’s start spending more time telling customers that consuming apps in the cloud model has all sorts of goodness that comes along with it and no more time on cloudy messages about architecture (OK, you can save those slides for the IT organization briefing part of the sales process).