OK, it’s already 2011 and I’m a bit late on providing some predictions for 2011 – but now is better than never! I sat down and thought about events in 2010 and whether those events have created a meaningful disruption with near term potential to affect 2011 outcomes, and this is what I came up with. Some of it is based on intuition, some on knowledge, and some experiences I’ve had at Apprenda in working with customers, prospects, and others in the industry. This is more of a mental exercise in subjective extrapolation rather than “prediction”, so don’t hold me to these;-)
1)Adoption of SaaS by ISVs will pick up more steam in 2011
a.Overall, an overwhelming majority of Independent Software Vendors (ISVs) deliver their software via the on-premises “packaged software” model. Consumption of software as a service (SaaS) offerings continues to grow at an amazing pace, but most of the demand has been satisfied by a couple of hundred companies that have surfaced in the past 10 years as wild success stories, such as Salesforce.com. As a result, I expect that on-premises player will continue to take notice and make the switch.
b.Competitive pressures within major verticals are becoming more and more real due to successful SaaS entrants, which will drive adoption of SaaS delivery as a market response. Existing software ISVs will start respond by moving part of their product lines to SaaS, or by choosing to offer down-market offerings as an initial experiment.
c.Counter to the perspective of many experts, packaged software ISVs will find strategies that work in their transition to SaaS. Transitional “poster-children” of each vertical will give confidence to other ISVs in the market that the transition can be made successfully.
d.Continued adoption of new technologies such as platform as a service (PaaS) and cloud application servers will bridge technical gaps that will ease the overall transition burden, fueling adoption of SaaS by more and more ISVs. I do not think SaaS is the nail in the coffin for existing ISVs, particularly with technologies like SaaSGrid in the mix which flatten the technical curve for both new application development as well as migrations.
e.Continued explosion of mobile usage creates further pressure (and significant opportunity) for companies to move to a SaaS delivery model. Most business applications that have a mobile angle typically need back-end systems to reconcile the data into primary applications, and SaaS is the only architecture that makes this feasible at scale across many customers.
2) The Upstack Scramble Intensifies
a.Big players continue to make big moves to seize the opportunity to control the new software battle ground in the cloud. Traditional platform vendors will realize that the application development and architecture tiers are huge opportunities, and that infrastructure virtualization and infrastructure tier technologies are not the competitive landscape of the future. Deals like the Heroku and Makara acquisitions make a lot of sense for players like Salesforce.com and Red Hat, respectively.
b.2011 and 2012 will be a make or break years for these big players, and the moves they make over the next 12 to 24 months will ultimately determine the next decade of control and leadership.
c.Commodity players, or players that have become commodity, seek to buy value up-stack through acquisitions.
3) Real Traction with Private Cloud/Internal Utility Computing and SaaS delivery
a.Mistakes and failures experienced in 2010 will be the lessons learned to drive the real solutions and seed private cloud and private PaaS adoption over the next 12 – 36 months.
b.Organizations want a unified and scalable platform for software delivery, and the vision of private cloud will begin to include technologies that sit above the virtual tier to give significant architecture and services value to internal development assets. A paradigm shift in how software developed internally for business units will kick off.
b. Enterprise projects will continue to explore leveraging Cloud architectures such as multi-tenancy for internal use. The cost savings and agility potential presents enormous savings profiles that push their way into enterprise development shops.
4) Cloud Washing Reaches Critical Mass and Collapses by EOY 2011
a.After attempting to cloud wash offerings, a number of small and mid-market ISVs will close shop due to competitive pressures and no real tactical response. This will help identify cloud washing as a poor strategy and that only real, measurable attempts to convert a SaaS model will lead to success.
b.Forces vendors to articulate how their strategies and solutions that is unique and truly “cloud.” Continued success of pure-cloud/SaaS plays will evidence that cloud washing adds no value.
5) Force.com Starts to Realize Momentum Potential
a.Force.com/Apex’s stuttered start begins to gain true rhythm now that Salesforce.com has diversified its cloud to be competitive outside of its proprietary track, particularly in Ruby and Java arenas due to Heroku and VMForce.
b.Force.com will continue to show strong among those extending Salesforce.com’s CRM functionality and potentially within the enterprise where it can be used to displace situational “spreadsheet” applications.
6) Cloud Middleware Provides Democratized Access to Complex Software Architectures
a.General development/programming skills declining, coupled with a continued increase in architecture complexity creates a gapping void that new middleware needs to fill
b.Just like the years when desktop OS’ spurred innovation by enabling companies to focus on their software and not the underlying complexities associated with its delivery – new solutions will fill the gap and catalyze a similar era of innovation once again.
c.Middleware solutions like SaaSGrid will drive multi-tenancy as a defacto standard since the primary concern of difficulty and cost to implement is trivialized.
7) QE[pick your number] won’t be a panacea for the economy – but SaaS and Cloud will help
a.Economic factors will continue to put pressure on operating budgets. Companies will be looking to do more with less; that is, they’ll want to boost efficiency while slashing budgets in order to survive in the modern economic climate. Due to size, IT budgets will be scrutinized and IT managers will be challenged to come up with solutions.
b.SaaS will be seen as a means of democratized access to solutions that drastically improve efficiencies while driving down the cost of IT. Infrastructure as a service will be leveraged to reduce the operating burden associated with in-house infrastructure.
c.Doing more with less, optimizing business performance – SaaS based B2B solutions will grow significantly in 2011 as a result.
I’d love to get everyone’s thoughts. Agree/disagree? Why? Did I miss something or does this seem to cover the right surface area?
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