The Cloud Complexity Challenge
Jan 12, 2016 10:07 AM PT
Growing acceptance of cloud computing quickly is becoming a double-edged sword for the leading players in the SaaS, PaaS and IaaS marketplaces. As a broader set of customers adopts cloud-first strategies, even the biggest cloud players are being challenged to scale their operations to keep pace with escalating customer demands without becoming too complex for customers to easily utilize their solutions.
The good news is that every market research survey clearly indicates that corporate executives have become comfortable with the idea of moving various parts of their business operations to the cloud. In fact, many increasingly are becoming convinced that utilizing cloud resources is not only a better alternative than investing in traditional data centers and on-premises software, it's an essential ingredient to meeting their customer expectations and remaining competitive.
However, as more organizations move more of their operations to the cloud, they are putting more pressure on their cloud providers to fulfill the promise that the migration process will be relatively painless and the business benefits will be easy to measure.
Although it is relatively easy to meet these expectations initially, it becomes increasingly challenging as the use cases become more complicated and involve a wider array of applications, systems and data sources, especially in an era when time to market (i.e., speed) is a primary measure of success.
Salesforce's Rapid Growth
The clearest example of a cloud company facing these issues head-on is Salesforce.com. It's hard to suggest the company is suffering from its own success as it continues to defy the law of big numbers by posting impressive quarterly results a regular basis.
The company announced in its most recent quarterly financial results 24 percent year-over-year revenue growth and deferred revenue up 28 percent YoY. As a result, Salesforce raised its FY16 revenue guidance to $6.65 billion and its FY17 revenue guidance to $8.1 billion.
While these revenue figures are extraordinary, it is the mind-boggling growth in the number customers, users, transactions and data volumes the company is handling that make Salesforce's accomplishment even more impressive. The company is supporting thousands of corporate customers, millions of customer records, billions of transactions and trillions of bits of data across a continuously widening array of cloud-based products.
Not only is it grappling with rapid growth, it must continuously reimagine its solutions to take into consideration new variables, such as mobile, social, big data and the Internet of Things.
Although the company continues to be focused on helping its customers better sell to and support their customers, Salesforce executives firmly believe the meaning of customer relationship management is evolving from a system of record to a method of engagement and a means of gaining greater intelligence and insight into customer preferences and behavior to achieve greater customer intimacy and a competitive advantage.
During a recent analyst briefing session, company executives candidly admitted that as Salesforce expands its product portfolio, its original goal of providing its customers and partners with a single platform to develop and deliver all its solutions has given way to a more segmented approach with purpose-built tools and utilities for specific business use cases.
Some of these platforms and tools have been homegrown and are continuously evolving to meet customers' changing needs. For instance, Force.com and Visualforce are giving way to Salesforce 1 and Lightning.
Others have been added as a result of various acquisitions over the years, like Heroku and RelateIQ. Another set has been introduced to address new market opportunities, such as Wave and Thunder aimed at the unique challenges associated with big data analytics and IoT data processing.
As the company expands its portfolio from sales and service clouds to marketing, IoT and other industry clouds, it is also being compelled to make more acquisitions like ExactTarget and extend its functional capabilities with acquisitions such as SteelBrick.
Each of these moves not only increases its total addressable market opportunities, it also adds stress to its operations and creates tensions with partners in these same areas.
Melding all the pieces together into a unified metadata architecture with a single user interface continues to be the company's mission. Its primary objective continues to be making it easy for its customers and partners to leverage these resources to better serve their own customers and end users.
Achieving this objective in such a way that everyone within Salesforce's staff, partner ecosystem and customer base clearly understands how all the pieces fit together is probably the company's biggest challenge at this stage.
Salesforce has achieved tremendous success because a previous generation of IT vendors and ISVs made it impossible to acquire and implement hardware and software cost-effectively to support their business objectives. As the complexities of traditional software and systems became an impediment to getting things done, Salesforce's cloud/SaaS value proposition became too compelling to ignore.
Today, successfully implementing Salesforce's solutions is becoming increasingly complicated. Although the IT consultancies and systems integration firms are benefiting from this complexity, Salesforce executives recognize they have to work hard to avoid the mistakes of their predecessors if they are going to continue to be viewed as the solution rather than a big part of the new problem.