Enterprise IT Watch Blog

Feb 25 2010   11:44PM GMT

Former SalesForce CEO: The Cloud is Coming

Michael Morisy Michael Morisy Profile: Michael Morisy

SalesForce.com has been the darling of the enterprise SaaS industry, with explosive growth that has eaten away at traditional CRM vendors’ marketshare. The company’s now poised, with Force.com, to extend its dominance even farther, but former CEO Steve Cakebread says that the cloud arena is just starting to get interesting.

He said that since leaving SalesForce.com, he’s been consulting with eHealth companies, portfolio managers and Xactly, a SaaS-based sales compensation company, where he is now the chief financial and administrative officer.

Almost all of those conversations focus on one topic: The cloud will change the future of enterprise IT.

“My long-term view of the [SaaS] industry is that over the next to 10-15 years, it replaces on-premise software completely,” Cakebread said in a recent interview with the IT Watch Blog. “There’s a lot that needs to come out before then, but I’m pretty convinced today that with the architectures being put in place that nothing needs to be run on premise.”

According to Cakebread, it just makes too much sense: “Every CIO is worried about redundancy and disaster recovery. if you’re using a couple different SaaS providers, that’s something you don’t have to worry about.”

Make sure they have a solid, distributed network of data centers, and CIOs can sleep a little easier knowing that even if a cable is cut by a careless backhoe or a data center burns down, their data is safe and accessible somewhere, somehow.

Of course, with cloud computing, one chief concern (just read the ITKE forums) is security. Denny Cherry captured a prevalent feeling when he wrote that, ” If you need to be sure that your data is secure, then a Cloud platform may not be the correct choice.”

Cakebread disagrees, however, saying that more cloud vendors are becoming open about their security practices and willing to work with companies.

“The larger companies allow your IT security people to come in and look at the setup, and they come away feeling comfortable the security was as good or greater than what they have internally,” he said. The same goes with uptimee. He had the same message on uptime, performance and interoperability: No, the cloud may not be perfect, and you’ll have downtime when your Internet is down, but the uptime and reliability is still, in many cases, better than what companies are getting today so why not go with cloud?

He also said that there’s one area ripe for SaaS conquest: ERP. While there are some players in the field, like NetSuite, it’s a hugely complicated problem because of the integration, security, and uptime required. That complexity means it’s also a huge potential win for whoever can master it first and seize marketshare.

“Right now, everyone builds their tools around their core ERP,” Cakebread said. “There are vendors there, but they need to make their applications worldclass and robust.”

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