Dion Hinchcliffe has just published an overview of some compelling options Enterprise and Web 2.0 approaches offer organizations in the current economic climate and upcoming recovery; far smarter than the rip-and-replace approach to workforce and knowledge management we’ve known in the past.

Move to lower-cost online/SaaS versions of enterprise applications; move IT infrastructure to the cloud. Dion cites statistics that show moving to SaaS versions of applications can save organizations up to 40% in their IT budgets. “Recent reports say that moving to a SaaS version of your Customer Relationship Management (CRM) system will save the average firm 25% to 40%, a number that likely translates well to other types of business applications given the core nature of CRM to most enterprises.” Dion cautions, however, that a move to SaaS for strategic applications is not a trivial undertaking, and it’s best to start with more peripheral applications. However, cloud computing provides much greater agility as business shifts — reducing underused capacity and investments in one part of the business, and straining resources in another part.

Use Enterprise 2.0 to capture the knowledge and know-how of employees. A couple of months back, Harvard’s Andrew McAfee speculated that the auto industry could benefit immensely by tapping into the collective knowledge of its workforce.

Dion is of the same mind, warning that companies that engage in layoffs risk losing “tens of thousands of years of built up expertise and capability, largely untapped; the knowledge residing in inaccessible places such as e-mail accounts, file servers, meeting notes, and most devastating of all, in the minds of the departing workers.” He urges organizations to take a different tact, developing networks that can learn and accumulate knowledge. “Enabling open, persistent, freeform collaboration amongst far-flung workers allows vast amounts of institutional knowledge to pour out into visible places on the network where that information can then be studied, reused, and learned by others including (perhaps especially) new workers down the road…. Making your intranet a vibrant, ever growing, worker-powered, two-way social media landscape is one of the surest investments you can make in your organization.”

Embrace new low-cost models for production — such as crowdsourcing. “Crowdsourcing — in which organizations tap into the knowdledge, innovation, and vitality of social networks — represents and new frontier for management. The advantages, Dion points out, include “using the vast audience of people on the network as a primary source of innovation, research, and product development as well as customer support, sales, and marketing.” However, he cautions that crowdsourcing requires a certain set of skills “that is very different from traditional corporate hierarchical command-and-control.” Managers need to understand how to leverage social networks.

Lower customer service costs by pro-active use of online customer communities. Related to crowdsourcing, greater efficiencies and knowledge can be gained from creating or tapping into the collective wisdom of online customer communities. However, Dion points out, few companies have mastered this capability yet. There’s an urgent need for this kind of resource: “With the rank and file of the customer service and account representative ranks of organizations shrinking rapidly in many cases, now is time to provide your customers an entirely new and largely superior channel for communication, collaboration, and working together and amongst themselves.”

Open your supply chain to partners on the Web. This could be one of the biggest growth areas over the coming year, Dion says. “If you want double-digit growth during the downturn in whatever otherwise staid industry you are in, there are few more powerful 2.0 techniques for doing it than turning your business into a strategic open platform on the network.”

Gartner defines cloud computing as “a style of computing in which massively scalable IT-related capabilities are provided ‘as a service’ using Internet technologies to multiple external customers.”

However, the consultancy’s analysts say, there have been different perceptions of what is included in cloud computing.  ”The term cloud computing has come to mean two very different things: a broader use that focuses on ‘cloud,’ and a more-focused use on system infrastructure and virtualization,” said David Mitchell Smith, vice president and Gartner Fellow. “Mixing the discussion of ‘cloud-enabling technologies’ with ‘cloud computing services’ creates confusion.”

Gartner says some commentators and vendors have applied the “cloud” label to internal initiatives, such as virtualization and automation. However, in the broader context, cloud computing applies to “the perspective of the Internet/Web/software as a service (SaaS). The focus is more on cloud than computing with the emphasis placed on access to services from elsewhere (that is, from the cloud).”

Gartner says the internal aspects and the external Web-based aspects are related, but that the internal definition is more of a “subset” of the larger phenonemon.

Is Gartner getting too picky on this? By employing the same standards and principles, organizations will be supporting their own, secure internal “clouds” as well as relying on the global cloud. In many cases, the overlap will not even be apparent to end users.

David says there are two forms of cloud platforms: cloud infrastructure services and cloud applications services. Cloud infrastructure services include on-demand storage, integration, and identity. Cloud application services include Software as a Service, search, mapping, and other application services.

David notes that we’re only in the early stages of this evolution, and “cloud platforms aren’t yet at the center of most people’s attention.” However, he continues, “the odds are good, though, that this won’t be true five years from now. The attractions of cloud-based computing, including scalability and lower costs, are very real. If you work in application development, whether for a software vendor or an end user, expect the cloud to play an increasing role in your future. The next generation of application platforms is here.”

The folks that manage data integration have some interesting observations to make on this topic. I recently had the opportunity to speak with Chris Boorman, chief marketing officer with Informatica, and Ron Papas, senior vice president and general manager for Informatica On Demand, about the enterprise data management implications of this growing trend.  (The interviews are posted here and here in this two-part series.)

As cloud computing engagements increase in sophistication and edge ever closer to the mission-critical core of the enterprise, recognition is growing that there are enterprise data management issues that still need to be worked out. “Our belief is that cloud computing or on-demand computing is simply a way of further fragmenting data, because customers are absolving themselves from responsibility for the management, storage, security, and backup and recovery of the availability of that data,” Chris pointed out. However, he emphasized, “you must never, ever, absolve responsibility for the quality and the ownership of the data, and having such quality and ownership as part of your core business processes. And that requires integration.”

Cloud computing hands off many of the aches and pains associated with systems and application development and management to someone else. But this does not relieve enterprises of the requirements and responsibilities around effectively managing enterprise data. Many observers, in fact, are concerned about the implications of cloud computing on enterprise data management and integration, since much of the processing and storage of information shifts to outside providers.

As Informatica’s Ron Papas put it, technically, there isn’t a lot of difference between on-site systems and data stores and cloud-managed systems and data stores.  However, there’s a big difference in the ownership of these applications:

“What’s that’s doing is it’s bypassing the traditional process of having IT design the whole integration processes into the solution. So, before you know it, you could be up and running with Salesforce.com without having put much thought into integration, because it’s really being led by the line of business side. You could have someone in the sales and marketing unit that somehow bypassed IT and went up and implemented Salesforce. All of a sudden, they realize they need access to that data. they need it synchronized.”

More companies are emphasizing their ability to compete on analytics, and the ability to integrate and leverage enterprise data is key. Whether on-site or in the cloud, effective data integration is a must.

These services can be used to keep people aware of fast-moving issues, events and changes, and bring the strengths of IM and online presence together in useful ways.

Here comes another dimension to group instant messaging … one which promises to further close the gap regarding utility and the ability to reach into a network and connect with someone to whom you want to discuss whatever it may be that interests you or what you may need to know or find out.

A friend who is well-known to many in the Web 2.0 arena, Stuart Henshall, and his colleague David Beckemeyer (TelEvolution / PhoneGnome, Earthlink), have just launched Phweet, a service whereby a user with one click can ask someone who has just twittered (or pownced, or jaiku’d, or fed a friend or kwipped) whether or not they will accept a VoIP call.  Once accepted, voila !  Connection is established and the voice conversation begins.

In terms of how it operates technically, this service effectively eliminates the need for dial-tones (arguably the last remaining communications bottleneck the telcoms "own") in order to talk to someone else via voice.  Powerful stuff !

Please note that this service is alpha, and applies only to twitter at the moment, though I believe there plans to enable it for the other similar service I have mentioned.

Of course group IM users can already connect with someone they "know" and ask about / initiate a VoIP call in any number of ways, but this service makes the functionality available during the course of using the group IM service, thereby enhancing existing online presence and creating what some are calling ambient intimacy.

Go ahead, sign up and try it out.  I have … it’s easy, fun and potentially very useful, especially for project teams or private networks of people who are connected together on some issue or other.

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Tags: Stuart Henshall, David Beckemeyer, Phweet

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HP, Intel, and Yahoo! have just announced the creation of a “global, multi-data center, open source test bed for the advancement of cloud computing research and education.”

What is the purpose of having a test bed?  I mean, isn’t the Internet and its user base the test bed for such things? (This is said partially tongue in cheek…) According to the joint press release, the “official” Cloud Computing Test Bed will provide a testing environment to study cloud computing issues “on at a larger scale than ever before.”

The institutions supporting the test bed include the Infocomm Development Authority of Singapore (IDA), the University of Illinois at Urbana-Champaign, the National Science Foundation, and the Karlsruhe Institute of Technology (KIT) in Germany. HP, Intel, and Yahoo! will also host centers.

Each location will host a cloud computing infrastructure, largely based on HP hardware and Intel processors, and will have 1,000 to 4,000 processor cores capable of supporting the data-intensive research associated with cloud computing. The test bed locations are expected to be fully operational later this year. Parties interested in using the test beds for their own budding cloud applications will need to go through a selection process, however.

This initiative is another sign — a very high-level one at that — of the tectonic shift taking place beneath the feet of the entire computer and software industry. End users are increasingly looking to the network to take advantage of applications, services, and utilities, versus installing and maintaining these artifacts at their own sites.

A new study from Saugatuck Technology states that users want SaaS throughout the enterprise, whether their enterprises are ready for it or not. And, by extension, SaaS is spreading throughout the enterprise, whether the vendors – or their offerings – are ready to support and deliver what users want.

The study, based on interviews with 400 executives and 30 SaaS solution provider and independent software vendors, finds that while users are increasingly demanding and expecting SaaS versions of everything from email to ERP, they often don’t understand the technological and organizational resource constraints to enterprise-wide SaaS.

Blame the vendors, who are scrambling to catch up with demand coming from within enterprises, according to Mike West, Saugatuck research vide president and leader of the SaaS study. “Unfortunately, not enough SaaS providers see or understand the increasing enterprise scope of user demands and desires. Over time they will face some real challenges when it comes to maintaining high user satisfaction and, ultimately, high rates of renewal or expansion of their services.”

Saugatuck identified four waves of SaaS evolution. While earlier-generation “Wave I” offerings continue to flourish, the broader market has moved on to “Wave II” solutions that integrate with on-premise data and processes.

Some providers are beginning to address key “Wave III” requirements, which support inter- and intra-company collaboration and personalized workflows.

Longer-term, “Wave IV” threatens to sweep IT and business together and forward beyond user and vendor experience. Continuous growth and innovation are core competitive requirements in most SaaS markets -addressing an ever-expanding array of customer and partner desires and requirements for interfaces and function.

The on-demand, cloud model of computing is poised to sweep enterprises — even those using traditional ons-ite software, Saugatuck predicts. With traditional on-premise license revenues stalling, ISVs will adopt SaaS strategies en masse, led by either internal development initiatives, acquisition of synergistic SaaS assets or via virtualization.

But there is no guarantee that many ISVs can and will make successful transitions to SaaS, Saugatuck adds. When asked to identify who the “SaaS Master Brands” of the future are likely to be, 51 percent of users chose either pure-play SaaS solution providers or said that “it was just too early to tell.”

As an enabler of Cloud-based software development, deployment, integration, and management, platform-as-a-service (PaaS) will significantly improve the enterprise-ready capabilities of most SaaS offerings. PaaS therefore becomes a key enabler of enterprise-ready SaaS, and of SaaS-ready enterprises.

Saugatuck predicts that “Cloud Computing” will evolve into “Cloud Business” — a natural progression of SaaS, the IT utility concept, and business process outsourcing and transformation.

Both vendors offer storage, messaging, queuing, and back-end server scalability that can conceivably offer an alternative to buying and managing onsite software and hardware.

Amazingly enough, access to Google App Engine will be offered for free, versus Amazon’s incremental pricing plans. However, Amazon’s services are priced so low that free versus a couple of hundred dollars per month may not be an issue for enterprises. (Individual consumers, however, will more likely be drawn to the no-cost Google model.)

However, what may be an issue for enterprises are things such as governance, security, privacy, and control — all issues that cloud the Cloud computing space.

In an online poll I am conducting with the post, sentiments are running against Cloud computing for the enterprise: at the time of this writing, 62% said Cloud computing is still too risky of a bet for enterprises, versus 32% saying it is enterprise-capable.

Readers of this blogsite may have already seen my arguments in favor of moving to the Cloud — not having to deal with software maintenance and upgrades, and paying for only what you need. However, there are arguments against enterprise-scale Cloud computing, which include the following:

• Cloud computing may create a dependence on the provider (Google, Amazon) and may make it difficult to move to another platform.
• Google itself admits that Google App Engine is targeted at consumer applications, not businesses.
• Enterprises leveraging Cloud computing may become homogenized — and lose the competitive advantage that may come from custom-built systems.
• There’s always the risk that the Cloud provider may change business models or even go out of business.

This is probably a good list to have, since many vendors will try to sell you the concept simply because it’s the latest and greatest hot buzzword. Simplicity is the watchword for cloud computing; anything that suggests different may still be traditional-load-and-fight-with-the-software computing.

Here are just some of James’ “Ways to Tell Its Not Cloud Computing:”

1) “If you need to send a 40 page requirements document to the vendor then… it is not a cloud.”

2) “If you can’t buy it on your personal credit card… it is not a cloud.”

3) “If they are trying to sell you hardware… its not a cloud.”

4) “If there is no API [application programming interface]… its not a cloud.”

5) “If it takes more than ten minutes to provision… its not a cloud.”

6) “If you can’t deprovision in less than ten minutes… its not a cloud.”

7) “If you know where the machines are… its not a cloud.

“If there is a consultant in the room… its not a cloud.”

9) “If you need to install software to use it… its not a cloud.”

Cloud computing is truly this year’s rising star. Nick Carr also talks about the rise of cloud computing in this new article in Ad Age. Nick says it so well when he speaks about the paradigm shift that has taken place in personal computing:

“In a closet in a spare bedroom of my house is a crate of PC-software programs on CD-ROMs and DVDs. There are dozens of them neatly wedged into their plastic cases — financial programs, graphics programs, encyclopedias, games, business applications and hobby applications. And they all seem, suddenly, like strange artifacts from the past.”

Most of the value of PCs and laptops, Nick says, “comes not from what’s inside them but from the network they’re hooked up to. They’ve become, essentially, terminals.”

Such is also the case with enterprise computing. This vision, in fact, has been bandied about for the past decade, in fact, by enterprise systems vendors such as IBM and Sun Microsystems. Back at the turn of the century, Sun’s Scott McNealy talked about delivering compute capacity via a “Big Freakin’ Webtone Switch.” IBM has long talked about opening up pools of its vast reservoirs of in-house systems to customers.

HP’s new “Adaptive Infrastructure as a Service” (AIaaS) offers customers access to HP-owned and managed data centers that deliver applications such as Exchange and SAP, as well as “other critical business applications.”

On a practical level, cloud computing makes it possible for enterprises to break out of the cycle of paying more and more for the costs and headaches of building and maintaining their own data centers. As a result, organizations need not be anchored as tightly to the expensive investments made in systems, and therefore able to change faster and more flexibly. And no one will miss the long weekends required to perform upgrades.

Is there a down side to such rosy scenarios? Enterprises must weigh the costs of paying eternal monthly access and licensing fees versus one-time purchases for licenses. Plus, there are the risks inherent in relying on an outside partner for computing –a loss of control. Data security also rears its head, and needs to be explored further.

But, for now at least, the future of cloud computing appears to be anything but cloudy.