Seeing Clouds Everywhere
Jun 10, 2011 5:00 AM PT
Even as a long-time advocate for moving to cloud computing, I'm still surprised by the range of companies and nonprofit organizations making this move, and pleased to hear about the business benefits they are gaining from their decisions.
An illustration of this growing movement is a series of webcast interviews I recently conducted of CXOs from a variety of "mainstream" small-and mid-size enterprises on behalf of SAP. The objective of this CloudInsider series was to demystify the "cloud" and show corporate decision-makers from very traditional businesses how today's cloud solutions can help them meet their escalating challenges.
More Responsive IT Infrastructure
The first person I interviewed was Sina Moatamed, who had been CIO of BendPak, a manufacturer of automotive service products such as power lifts, compressors and other shop equipment. The company has approximately 175 employees and generated nearly US$70 million in revenue in 2010.
When the economy cratered and the automotive industry went into a tailspin, BendPak found itself in an advantageous position. It had an opportunity to gain a greater share of the growing market for automotive services, as many car owners chose to repair their vehicles to extend their useful lives rather than buy new ones.
However, BendPak needed a more robust enterprise resource planning and financial management system to capitalize on this situation. It made a conscious decision not to go down the old path of buying an on-premises system, because it didn't want to be burdened with the upfront costs and ongoing complexities. Instead, it chose SAP's newly revamped Business ByDesign Software as a Service solution.
As Sina put it, "I wanted to bring a more scalable infrastructure to BendPak, but the limited resources didn't permit me to do the typical kind of buildout of the infrastructure operations. [Instead], we wanted to simplify the traditional complexity of our IT operations from a service perspective and change the anatomy of our IT infrastructure to make it more responsive to our needs. Moving to the cloud caused a shift in our thinking about IT and business processes."
Enterprise-Class System in 90 Days
My second interview was with Eric Brown, the CEO of Johnson Products Company, a manufacturer of specialized hair care and beauty products for the African American community, including the Ultra Sheen and Gentle Treatment brands. Eric had a unique challenge: He had to spin Johnson Products out of Procter & Gamble and get it onto an enterprise-class operating system in 90 days, with only a skeleton staff to support it!
Eric met this challenge by choosing a cloud solution, which he believed would "enable us to match the operating standards for order fulfillment and billing which we had set for our partners and customers as a part of Procter & Gamble.
"I didn't want to make an investment in a big data center that I could show off to customers or partners...," Eric told me, "and I didn't want to invest in an IT staff to deal with servers, security or software."
World-Class Management Systems
My third interview was with Neil Briggs, the CFO of WL Plastics, the second-largest North American manufacturer of high density polyethylene pipe and related products for the oil, gas, mining, industrial and municipal water industries.
Neil admitted to me during our webcast discussion that WL Plastics "stumbled upon cloud-based ERP solutions. We actually started by looking at a traditional, on-premise approach and discovered that they were too costly and complicated to satisfy our needs. What really attracted us to the cloud solutions was that we could acquire world-class management systems to meet our needs without any upfront capital costs and with only limited in-house technical skills.
"The cloud allowed us to address the differing customer requirements and help our customers and partners better manage their businesses also," he told me.
More Scalable ERP
My final interview earlier this week was with Greg Dunn, the CFO of Sambazon, a manufacturer and distributor of organic foods and health juices, smoothies, sorbets and frozen products made from handpicked Brazilian fruits and botanicals. The company was attempting to multiply its sales and needed a more scalable ERP system to support its growth.
Like Neil Briggs at WL Plastics, Greg did not set out to acquire a cloud solution. Instead, he came to the conclusion that a cloud alternative was best suited to reduce downtime issues; enable users to get on board quickly; gain better controls; and improve efficiency, reporting and access to data.
One of the myths about today's cloud computing marketplace is that the early adopters are generally confined to startups and other companies that are inclined to use "bleeding edge" technologies like cloud solutions to accelerate their product development efforts or support their cyclical business requirements.
The customer success stories I heard during the SAP series painted a more diverse picture of today's cloud users and demonstrated that a widening array of organizations are taking advantage of cloud alternatives.