How Google is redefining the enterprise

Google's made some big moves into the enterprise. Will traditional software vendors keep up or be left behind?

AppEngine

With all of the talk about Android, the open Web, and video taking place at this week's Google I/O conference, big software vendors could have easily been lulled into underestimating how much Google is actually targeting enterprises with new and updated offerings.

That would be a mistake.

Google has become such a prolific creator of technology that suits its own business needs, somewhere down the line it crossed over into the future of the enterprise, or at least a version of the future--one that develops software to consume and manage IT services and resources without having to build your own infrastructure.

Google hasn't always been great in "productizing" its own applications, but in this case it's the vision that matters, and it should serve as a warning to traditional software vendors who remain confused about not just what cloud means, but how this new way of developing and deploying applications will affect them.

And really, cloud is far more about users than it is vendors. As Forrester Research's James Staten wrote recently, "cloud computing isn't your future--it's a new part of your overall IT portfolio." It's the ability to use cloud services to augment your environment that matters to users. Services such as Amazon EC2, AppEngine, and Rackspace Cloud are all just extensions of your infrastructure.

Many enterprise software vendors including IBM, Oracle, and Red Hat, make their software available on Amazon EC2, typically just running virtual machine images of the same software stack users would deploy internally. This is a good start, but not enough.

In fact, I'm starting to think that many software vendors have laid down a sucker's bet in not developing their own cloud infrastructure.

And those who believe their software is only meant to be used behind the firewall need to realize that the way developers interact with applications and infrastructure has changed, which requires some level of re-engineering to make applications work in a more cloud-like manner.

Google's AppEngine news reveals the fact that most software vendors will have some very tough choices to make regarding how they embrace public cloud platforms, leaving them with a few options to try and keep up:

  • Dip their toes in the cloud waters with EC2 while digging their heels in and protecting enterprise deployments--the most likely scenario that will leave most in a deficit position.
  • Develop full-blown platforms like Azure or AppEngine--not feasible for most software companies as they don't have the expertise or interest in providing large-scale data center services.
  • Partner with a cloud provider in a way that provides sustainable monetization options for both parties--hard to see how software margins can remain strong if users are paying for per-hour consumption.

The shift of running VMs on EC2 to running full applications on AppEngine presents some real challenges in terms of software sales in light of the fact that complex Java applications will now be deployable directly. Why bother with an application server stack if you can just hit a "deploy" button?

VMware CEO Paul Maritz took the I/O keynote stage and noted that infrastructure level clouds like AppEngine and EC2 have in many ways become the new hardware, which I would argue is the big takeaway in all of the announcements.

Dell made hardware a commodity, open source leveled the software playing field and now the cloud is making infrastructure a commodity--aligning to make both hardware and software far less interesting to developers and CIOs.

Enterprise IT staff members aren't going anywhere soon and the vast majority of applications will continue to be developed and deployed internally, but the advent of cloud-based infrastructure shows just how far behind the big software companies will remain if they don't start acting now.

 

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