Life in the Energy Cloud

Web-based business software services are both the biggest threat and biggest opportunity for the mainline enterprise software makers and those who seek to eat their lunch.  News that SAP was stumbling with its Business ByDesign software as a service was not new news, but the extent of the failure to thrive now appearing in the trade press has both stunned and delighted the sector.

Instead of the SAP goal of 10,000 Business ByDesign customers by 2010 reality is more like 100.


A Wall Street Journal story on the subject says SAP’s online product had too many performance problems and was late in arriving.  A generally accepted product was not released until July 2010. Given the negative buzz customers were scared off and decided to let some other brave soul tempt fate by being an early adopter.

Adding juice to the spin was the surprise announcement by HP that is has hired the former SAP exec responsible for Business ByDesign as the replacement for Mark Hurd as CEO.  Tongue’s wagged about whether that meant HP would try to acquire a bloodied SAP and use it to bludgeon Hurd in his new Oracle role.  The story just keeps getting better with all this Silicon Valley business politics intrigue.

Meanwhile back on the SaaS R&D workbench other vendors appear to be sneaking up on SAP:

  • Microsoft Business Productivity Suite is a set of Microsoft hosted communications and collaboration solutions available as a subscription service online with no software to install. These enterprise-class services allow companies large and small gain access to business productivity tools without maintaining an IT infrastructure themselves.  The services offered today include: SharePoint Online database collaboration services, Exchange Online a messaging and email solutions, MS Office Communications Online including VoiP, IM, data and text messaging services and Office Live Meeting for video conferencing, training and events.
  • Accenture and other systems integration firms that have made big money following Oracle and SAP into Fortune 1000 players now see SaaS as a threat to future growth. Accenture seeks to stake a position in the software on-demand delivery model to provide the transformation applications and services they think companies will need to make effective use of it to solve business and IT problems and deliver benefits such as speed to value, lower total cost of ownership, increased user adoption and greater employee productivity.  And getting companies to convert to cloud computing and software on demand keeps Accenture consultants billing for the set up and integration services.
  • was a pioneer in providing software and a service to unify sales and marketing activities across a company.  Its platform is now poised to expand to other services as the company grows.  Though products like Sales Cloud2, Service Cloud, Chatter and Force the product line keeps growing to cover more of the enterprise solution needs.  By focusing on the specific application needs of customers has taken the geek out of cloud computing for many small to medium businesses
  • IBM Smart Business is a new IT delivery model that can significantly reduce enterprise IT costs & complexities while improving workload optimization and service delivery. Cloud computing is massively scalable, provides a superior user experience, and is characterized by new, internet-driven economics.  Now IBM is integrating its cloud computing framework into the Smarter Planet strategy for optimization and performance improvement across industries offering scalable growth services few other players can match.
  • VMWare is a fast growing player in the cloud computing space.  Its pitch is Virtualization is the essential catalyst for enabling the transition to cloud computing. It builds on virtualization to deliver cloud infrastructure and management solutions, cloud application platform solutions and end-user computing solutions that significantly reduce IT complexity.  By focusing on datacenter operations and an ecosystem of vendors VMWare seeks to be the glue that stitches the cloud based software as a service empire together.

So my story started with the SAP stumble with Business ByDesign but the challenge of software as a service concepts using cloud computing to end the monopoly that SAP and Oracle have over enterprise software is changing the game for everyone else too.

IT shops have a love-hate relationship with cloud computing and SaaS solutions.  On the one hand they represent significant opportunities for cost savings at a time when IT spending is tight and gasping.  On the other hand the move to the cloud and the use of SaaS means small firms don’t need an IT shop in the first place and bigger firms don’t need nearly as many IT geeks as before.

For customers the reality today is we are ‘lab rats’ in the cloud science experiment whether we turn into superstar performers or zombies depends upon the vendor choices we make and how well we make the transition to learning the new way of using this transformation technology in the biz apps that really counts.

So what?

So all this IT transformation is converging with operations technology (OT) around smart grid, meter data management, constant energy management of commercial and industrial loads through customer aggregation, demand response, microgrids, energy storage and power electronics.

Taken together this move to the cloud can overcome many of the technical barriers that have prevented the electric power system of the future to change.  The good news is that it is changing and the velocity of that change is accelerating—the bad news for the tradition energy and utility business is that it is going to be run by big IT/OT players many of whom are not even in the energy business today

Look at the three Dream Team combinations I have blogged about recently.  There are plenty of others just like that that convergence and opportunity will bring together sooner than we think.