The old world of on premise applications is unlikely to go away despite the fervent wishes of the more zealous on demand vendors. That means there needs to be a co-existence between the two models of computing which in turn represents an opportunity for integration firms such as Informatica.
“I've been at Informatica from day one and I've seen us go from nothing to where we are today,” says Ron Pappas, head of Informatica's On Demand arm. “SaaS has been a fast growing trend and we've been aware of this. We worked closely with Salesforce.com with a lot of overlapping customers and that has been very succesful for us. We are present in about 86 of their largest enterprise customers and have 25 accounts with more than 1000 seats.
“What's nice about focusing on a market like Salesforce.com is that you really get to understand it. You can tell people that Cloud applications are going to need integration, but to get that message across you need a brand. So we get a foot in the door by focusing on the Salesforce.com market. Salesforce.com is a tiny player compared to other vendors in the market, but it is doing very well. It has become ubiquitous. If you are using Salesforce.com then you understand the value proposition of SaaS. You use it and then you go back to look at your other applications and say 'why can't I change this?'.”
So what is on demand integration actually about? “It's not about sticking a Saleforce.com front end onto an SAP back end and getting them to work together! A lot of people would like to believe that that is what it's all about,” says Pappas. “It's actually all about master data integration. It is about SAP and Oracle of course, but it's also all about the hundreds and hundreds of proprietary systems that are out there. There is also a difference between how small companies do things and how enterprises will do things. If you look at integration in general, it should be done by IT. It is plumbing. But SaaS has changed the way that a lot of things are deployed and made it easier for business people to do things by themselves. But you can't cut out IT. You can't go all the way into your SAP system by yourself. IT has to be involved.
CIO opportunity or threat?
So why do so many CIOs seem to view SaaS as a threat? “In some cases, IT realises that SaaS is here to stay,” comment Pappas. “They realise that they need to find better tools and service over the internet. They realise that the user of tomorrow is going to be different. The user will be line of business managers or sales force administrators or marketing admin people. The user won't be middleware programmers or even programmers.
“Smart IT shops are saying to their users, we are going to equip the business people with little staging areas and put the back end data you need on there because you're modifying the data so quickly that I can't keep up. What we have done is to create a series of integration solutions for the lines of business. Some 15-20% of SaaS integration today is happening within the IT department. The rest comes when the line of business needs a quick solution and needs something done.”
Most companies will have to tackle the integration of Cloud applications with older on premise ones, but there's also the challenge of Cloud to Cloud which many of the SaaS vendors have addressed by producing their own APIs. “Cloud to Cloud integration is easier than Cloud to on premise. A lot of the Cloud vendors are hard coding integration between themselves and there will be some that become very popular. Exactly the same thing happened in the on premise enterprise market,” says Pappas. “But the Cloud vendors know that they are not in the integration business and that specialist integration tools are still extremely valuable. Vendors are not producing APIs so that their competitors can play nicely with them; they're doing it for their customers. People like Informatica are the arms dealers!
“We started with the Salesforce.com market but we are gaining traction elsewhere now. Every vendor has to work out a way to be somewhere in The Cloud. It's the hip thing to do. For the hardware guys, The Cloud is a huge threat and they need to find out how to play a role in it. Customers are looking to lower their costs and they want some of what the SaaS vendors are offering. Cloud Computing is going to completely modernise things that have been previously locked up. When we went from mainframe computing to client server, applications all had to be rewritten. The same thing will happen again.”
Post new Comment